Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
Beer market of Vietnam: “Young tiger”Vietnam is one of the few big beer markets that continue to grow steadily. The beer popularity results from its low price, street consumption culture, and social motives. The outlooks of beer market as well as the Vietnamese economy inspire optimism, though the country is heavily dependent on export of goods. The state regulation can be called liberal, but the key risk for brewers is harbored in intensive rising of excise. Within TOP-4 there are two leaders, Sabeco and Heineken that grow at the fastest rates. The first company effectively employs its capacities, the second one focuses on marketing technologies. Almost 80% of the market belongs to century-old brands, yet the middle class and the youth are shifting their interest toward international premium that is growing taking share from the mainstream.
Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Buying a business in Romania: cultural due diligence and hidden cultural rules
“This transaction allows us to consolidate our leading position in Romania. We have a stronger portfolio , more diversified with leading brands and an excellent platform through which we will bring the value and development,” said at the time Nico Nusmeier, Regional President of Heineken for Central and Eastern Europe.
The beer maker in Romania was 90 percent controlled by five players – Ursus Breweries, Heineken, Bergenbier, Tuborg and Romaqua, while small producers accounted for only 10 percent of the market.
What was the reasoning behind the Heineken – Bere Mures deal? The two main players were forced to play the game of market leaders, as an alternative to organic growth, and any strategic movement like M&A was a key determinant in their market positioning. The particular case of Bere-Mures acquisition was not necessarily a desired acquisition, but rather a reactive movement to the market tendencies.
In their turn, the Bere-Mures shareholders sold the company simply because it was the best moment of exiting the market.
On the other hand, the main players Ursus and Heineken, fighting for the first position, were forced to get involved in the process and make a decision. At the moment of the acquisition the market share difference between Heineken and its main competitor SAB Miller was only 1 percentage point, thus the fight of getting Bere-Mures that accounted for 6 percent of the market was very tight with both players negotiating in parallel with Bere-Mures. The improvement in competitive position is one of the main drivers of M&A transactions and this was also one of the main reasons behind the Bere-Mures acquisition.
During the process the two companies used a system called Total Product Management, which is very similar with Six Sigma concept, where Six Sigma can deal with a cultural change as well. “It was necessary to align all the processes of Bere-Mures with those of Heineken Romania,” said Vasile Ciurba, Member of the Board of Directors of Bere Mures.
Another aspect that was considered important was “the leadership style of the Romanian management of Bere-Mures, which was a direct leadership style, the decisions were taken much faster compared to Heineken Romania”. Two different national cultures – collectivist and individualistic ones, were merged into a new organizational culture through successful leadership.
There are various obstacles for international mergers and acquisitions and these can have a tremendous impact on the international workforce and global business operations if not addressed in the early stages.
Obstacles for international M&As in the cultural field include:
?attitudes and behaviour between the home and the host culture which can cause misunderstandings,
?client and employee dissatisfaction.
16 Nov. 2011