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.
APB Commences Legal Proceedings Regarding Proposed Sale of Heineken-APB (China)
• China business remains on track with international premium strategy driving organic growth
Asia Pacific Breweries Ltd (APB) announced today, that the proposed sale of its 50% owned Heineken-APB (China) Pte Ltd (HAPBC) to China Resources Snow Breweries Limited (CRSB) could not be completed as it was unable to reach an agreement after its latest round of discussions with CRSB. The proposed divestment comprised HAPBC’s 49% interest in Jiangsu Dafuhao Breweries Co, Ltd (DFH) and 100% of Shanghai Asia Pacific Brewery Company Limited (SAPB).
Mr Roland Pirmez, Chief Executive Officer, APB commented, “While we are disappointed that the sale to CRSB fell through, this has by no means affected our operations within China. We remain on track with our International Premium Brand Strategy as our higher margin Tiger and Heineken brands record growing volumes in China.”
The divestment of DFH and SAPB is in line with APB’s restructuring efforts in China as it focuses on its International Premium Brand Strategy. Despite receiving unconditional approval by the PRC authorities, CRSB decided to terminate the agreement on the basis that it would not be completed given the summons raised by DFH. HAPBC is contesting the summons served by DFH (as being groundless and without merit), including challenging the jurisdiction of the Nantong Intermediate People’s Court over the matters raised in the summons.
In light of the termination of the sale, APB expects a negative impact of approximately S$8.5 million due to transaction costs and operational losses from sale assets from October 2011 to March 2012.
Separately, HAPBC has initiated arbitration against Nantong Fuhao Alcohol Industry Co., Ltd (NAC) at the China International Economic and Trade Arbitration Commission in Beijing and is claiming against NAC for various breaches of the JVA, including but not limited to:
- Refusal to provide HAPBC with financial information of DFH;
- Refusal to cooperate with HAPBC for HAPBC to conduct an audit on DFH pursuant to the JVA;
- Acting in furtherance of NAC’s interest to the detriment of DFH in relation to the relocation of DFH’s main factory in Tongzhou; and
- Acting unilaterally without HAPBC’s approval in relation to material DFH matters.
In light of the above, APB is unable to determine either the financial position or valuation of DFH and considers it prudent to make a provision for the impairment of APB’s 50% share of the total book value of DFH. This amounts up to approximately S$30.0 million.
“This provision for the impairment of DFH removes the last piece of uncertainty in our China minority shareholdings; thereby freeing us to solely concentrate on our next level of growth in China via our International Premium Brand Strategy,” he continued.
3 Apr. 2012