The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms.
Hop Market in RussiaGermany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.
Kirin to Consider ‘Small-Scale’ Acquisitions in Southeast Asia
The company will “consider corporate tie-ups and small- scale mergers and acquisitions in Southeast Asia” with partner Fraser & Neave Ltd. (FNN) and focus on lowering its debt, Chief Executive Officer Senji Miyake said in an interview in Tokyo yesterday. “The time for big M&A is over for now and our number one priority is to pay off our debts.”
The Tokyo-based beverage maker plans to expand in Vietnam, Thailand and Indonesia, Miyake said, pitting it against Asahi Group Holdings Ltd. (2502), which also seeks to grow in the region. Kirin has invested more than $4 billion abroad in 2011, continuing its overseas push as beer demand declined at home for a 14th straight year in 2010.
“The Southeast Asian market is not yet dominated by one company so there are opportunities,” said Mikihiko Yamato, an analyst at JI Asia, who recommends buying Kirin shares.
Kirin has made at least four acquisitions this year, including Brazilian beermaker Schincariol Participacoes e Representacoes, and invested $400 million for a 40 percent stake in a soft-drink venture with state-backed China Resources Enterprise Ltd.
Kirin fell 1.1 percent to 932 yen at the 3 p.m. close of trading in Tokyo. The stock has declined 18 percent this year.
The brewer of maker Kirin Lager seeks to distribute its brands in Southeast Asia next year through Fraser & Neave, Miyake said. Kirin is the biggest shareholder of Fraser & Neave, with a holding of about 15 percent, according to data compiled by Bloomberg.
The yen has risen more than 7 percent against the dollar in the past year, the biggest gainer among 10 major currencies tracked by Bloomberg.
Asahi, Japan’s biggest beermaker by volume, plans takeovers across Southeast Asia to access wider margins and it “already” knows the targets, President Naoki Izumiya said in an interview on Dec. 12.
Kirin made 23.4 percent of sales abroad last year, compared with 6.6 percent for Asahi, according to company statements.
Kirin last month agreed to buy out shareholders in Schincariol Participacoes e Representacoes, completing its biggest acquisition. The deal valued the Brazilian company at about $3.6 billion excluding debt, when combined with the initial purchase in October of a 50.45 percent stake.
The brewer last month also agreed to assume 1.1 billion reais ($593 million) of Schincariol’s debt and estimated 2.1 billion reais of potential labor, legal and tax liabilities as part of the deal.
Kirin plans to lower its debt, Miyake said, without elaborating what steps it will take. The company’s debt-to- equity ratio jumped to 1.1 times after the purchase of Schincariol, he said.
The brewer increased its stake in Manila-based San Miguel Brewery Inc. (SMB) to 48 percent in 2009, bought a 14.7 percent of Singapore’s Fraser and Neave Ltd. last year and purchased a majority stake in Vietnam’s Interfood Shareholding Co. for an undisclosed sum in March.
15 Dec. 2011