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.
CR Snow, AB-InBev Lead Beer Price Hikes in China Market
CR Snow has raised the price of a 500ml bottle beer from RMB 3 ($0.47) to as much as RMB 3.5 per bottle in Changchun, the capital of northeastern Jilin province, the China Business News reported, citing people from the brewer’s local sales office.
Changchun’s local brand Ginsber Beer Co. Ltd. has also upped prices by 10-14% for a 500ml bottle, according to the report.
AB-InBev, which dominates the East China beer market, raised prices by around 10% for every box of its 330ml bottled beer in Shanghai in late November.
None of the companies have directly commented on the recent price hikes.
The recent beer price hikes are a precursor to wider price increases that industry analysts believe will take place in January, when brewers traditionally raise their prices in the domestic market.
“Normally brewers raise prices once a year and most of them choose to do so during off-seasons, not just to test consumers’ acceptance but also pave the way for strategic pricing when the peak seasons come,” said Li Baojun, president of private data and consulting services firm Societ, Insights & Decision.
Li said beer makers in China are being squeezed by rising production and marketing costs and decreasing profit margins, a problem that has persisted for 5 years.
“Brewers have to spend more on marketing and human resources, but given the cutthroat competition and shrinking profitability, I don’t think they are able to hang on there without raising product prices,” Li said in June in response to industry rumors that beer producers were mulling price increases in the second half of the year.
Analysts believe the new round of increases won’t affect sales at CR Snow, Ginsber and AB-InBev, as the hikes were introduced in areas where they enjoy a strong advantage in the local market.
CR Snow has a market share of 49% and 46% in Jilin and Heilongjiang provinces, respectively.
In January CR Snow, China’s largest brewer by production volume, raised prices by more than 10% in several provinces. Its biggest domestic competitor, Tsingtao Brewery Co. Ltd. (600600.SH), followed suit, raising the prices of some products by an average of 10%.
Three months later, in April, China’s price-setting agency, the National Development and Reform Commission (NDRC), stepped in to halt the wave of price hikes amid rising inflation concerns.
The NDRC asked China’s 4 biggest brewers -- CR Snow, Tsingtao, AB-InBev and Beijing Yanjing Brewery Co. Ltd. (000729.SZ) -- to stabilize prices at a time of soaring inflation.
China’s inflation started to ease 3 months ago after hitting a 3-year high of 6.5% in July. November’s consumer price index (CPI) rose 4.2% year-on-year, down from 5.5% in October mainly due to falling food prices, the National Bureau of Statistics said.
But inflation remains a problem, and the government will struggle to meet its full-year growth control target of 4%. The CPI growth was 5.5% in the first 11 months.
16 Dec. 2011