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.
Merger headache brewing for Busch
Critics of the deal believe allowing Busch, with its Budweiser and other brands owning approximately 47 percent of the US beer market, to buy Modelo, whose Corona and 11 other brands control 6 percent, will give it too much pricing power.
Busch, sensing regulatory troubles, said in July it would give importer Constellation Brands the right to import all of Modelo’s beers and set distribution and pricing. But the offer appears to be one the DOJ can refuse.
There is a meeting of the regulatory cops at Justice this week and, the source said, Busch may be forced to have a third party make all beers imported into the US.
“It’s going to come down to how much Busch is willing to give up,” the source said. “They are going to have to create another competitor.”
Anheuser-Busch InBev already has 14 brands with sales of at least $1 billion each — and Modelo has three.
A banker said he believed Busch was ready to give in if the DOJ were to order Modelo’s US imports to be produced by a third party.
Perhaps that’s because ABInBev is not necessarily after Modelo’s US market share — but its 59 percent control of the Mexico beer market. Modelo, according to ABInBev, is also the leading import beer in 38 countries. Conversely, the US beer market is stagnant, with shipments eking out a small gain last year after three straight annual declines.
In its presentation to investors, Busch also says the deal will create at least $600 million in annual cost synergies, phased in over four years.
The DOJ, with jurisdiction only in the US, cannot place conditions outside the domestic market.
A Busch spokeswoman said the company is not commenting on the review and continues to expect the merger to close at the end of the first quarter. The DOJ declined to comment.
15 Jan. 2013