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.
Asahi seen as frontrunner to buy StarBev -sources
* Sale of CVC's StarBev could come within two weeks
* StarBev sale could raise about $3 bln for CVC Capital
By Victoria Howley and David Jones
LONDON, March 1 (Reuters) - Japanese brewer Asahi is emerging as a frontrunner to buy eastern European brewer StarBev in a deal expected to fetch up to $3 billion for private equity owner CVC Capital Partners, people familiar with the matter said on Thursday.
The private equity group, which bought StarBev in December 2009, is gearing up to sell the business in around two weeks after receiving approaches from a number of global brewing groups, the people said.
"Asahi have put a big price on the table, and we would expect a resolution in around two weeks time," said one person involved in the sale process.
All parties either declined to comment or could not immediately be reached for comment.
CVC bought the business from the world's biggest brewer Anheuser-Busch InBev, calling it StarBev after its Czech beer Staropramen, and although AB-InBev has the "right of first offer," bankers and analysts believe it will not be tempted as it has its eyes on bigger beer markets.
The most interest in StarBev so far has come from Asahi, Carlsberg, SABMiller and AB-InBev, while other brewers such as Heineken and Molson Coors were less enthusiastic, the people said.
"We would expect a result for someone in the next two weeks, and all the talk is of Asahi," one of the people said.
Although the business is in countries like the Czech Republic, Romania, Bulgaria and Hungary and has been hit by recent weakness in eastern European economies, it is still seen as a long-term growth story in a rapidly consolidating global brewing world.
Other Japanese drinks groups Kirin and privately owned Suntory have shown less interest. Kirin bought Brazil's second biggest brewer Schincariol for nearly $4 billion last year, while Suntory is not keen on buying into European beer, the people added.
Asahi, the brewer of Japan's top-selling beer "Super Dry" has been on the acquisition trail buying up New Zealand ready-to-drink cocktail maker Independent Liquor last summer for $1.3 billion in its biggest ever deal, and in recent years has bought a stake in China's Tsingtao and the Australian business of Schweppes.
Last year, Asahi president Naoki Izumiya signalled more overseas deals were likely and, after looking in China, Asia and Oceania, it would search outside those areas as it aims for over 20 percent of its sales from foreign markets by 2015.
AB-InBev sold the business to cut its debts after buying U.S. brewer Anheuser-Busch in 2008 for $52 billion, and analysts said it would be reluctant to buy it back as it does not have leading positions in the big eastern European beer markets of Romania and the Czech Republic.
The Belgium-based group makes around 80 percent of its profits from North and South America, controlling half the United States beer market and two-thirds of the Brazilian one, and these two areas with China and Russia are its key focus.
"We would be stunned if ABI were to buy back assets it sold to a private equity firm less than three years ago ... ABI has said its focus is on the U.S., Brazil and China, and we would not expect them to expand at this stage in central Europe," said Liberum Capital analyst Pablo Zuanic
Other European brewers like SABMiller, Heineken and Carlsberg would face anti-trust problems as all are major players in the region, with a SABMiller-StarBev combination potentially having a 63 percent market share of the Czech Republic beer market, 49 percent in Hungary and 39 percent in Romania.
SABMiller had considered linking up with its new Turkish ally Anadulo Efes to try and overcome anti-trust concerns but progress has been difficult. The London-based brewer swapped its Russian and Ukrainian operations for a 24 percent stake in Turkey's top brewer last year.
Amsterdam-based Heineken would have market shares of 44 percent in Romania, 46 percent in Hungary and 51 percent in Bulgaria in a StarBev linkup, while Denmark's Carlsberg would have 46 percent in Bulgaria, 76 percent in Serbia and 47 percent in Croatia, analysts have calculated.
The level of interest from trade buyers, means little scope for private equity to compete as they lack the level of potential costs savings a big brewer can achieve, analysts said.
CVC bought the business for around $2.2 billion with potential future payment of as much as $800 million based on CVC's return on its investment.
In Europe, the four brewing stocks closed higher, AB-InBev gained 1.6 percent to 51.21 euros, SABMiller was up 1.5 percent at 2,586 pence, Heineken edged forward 0.6 percent to 39.86 euros and Carlsberg advanced 0.7 percent to 442.30 crowns.
7 Mar. 2012