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.
The Chinese beer market welcomed the merger of two giants
Currently SAB Miller holds 49% of shares of the largest Chinese beer producer China Resources Snow (CR Snow). At the same time, AB InBev is the third largest company in terms of production and sales volume in the Chinese beer market. Following a process of the merger the total share of these companies in the Chinese beer industry will be 42%.
The merger will be a kind of “big bang” for China. However, further consolidation may lead to more rational competition. According to the analysis of the Goldman Sachs agency, the expansion of the Chinese beer industry and profit growth in 5-7 times is expected in the next 5 years.
The main issue is what will be the response of the Antimonopoly Committee of China to the merger. Analysts believe that the Chinese government can offer AB InBev to reduce the share in the portfolio of CR Snow to 37% of the shares.
If the merger is successful, the operating margin of CR Snow is expected to increase from 7% in 2015 to 19% in 2019.
23 Dec. 2015