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.
Senior Vice President of Carlsberg Group about performance in Asia 2015
In Asia, all markets grew with the exception of China where the beer market declined. Company gained share in most markets and our volumes grew organically by 2% and 8% including the acquisition impact. Non-Chinese businesses continued their growth trajectory and grew 9%.
In Indochina, Carlsberg Group delivered 3% volume growth, mainly driven by the strong growth of the Angkor brand in Cambodia and solid performance in Laos. Following a strong Q4, volumes in Vietnam were flat after the July flooding in the northern part of the country.
In China, volumes declined 2% organically while the overall market declined by an estimated 5%. The market volume decline was predominantly in the mainstream category, while the international premium category showed solid growth.
Indian business grew 42% in a slightly growing market.
Net revenue grew organically by 5%, driven by volume growth and positive price/mix of 1%. In reported terms, net revenue grew 23% due to the positive currency impact and acquisition impact. Organic operating profit in Asia grew 13%, driven by the top line growth and by tight cost control as a result of the early implementation of new operating cost management framework.
Carlsberg Group have closed five breweries in China in 2015 with an additional two closed in the beginning of 2016.
“In China, quite frequently you’re in a position where a brewery was built in the middle of a city and the government asks you to move. That’s happened in Dali, in Yunnan, that project is now just completing. The government takes into account that they’re making you incur costs and so they help you with that move” - Christopher Warmoth told.
“We’re going to go through a similar process in Yibin in East Sichuan and as the caller earlier mentioned, we’re now planning to build a new brewery in Karnataka in India. Besides that, it’s business as usual. But they would be the big projects.
China has been difficult as a market. We’re more skewed to the west where the market has been down a little bit less. And we do continue to see an opportunity for premiumisation in China, both Tuborg and 1664 have been going well. And as we move into 2016, I think we see some chance that the market should at least flatten out after a couple of years of decline”.
16 Feb. 2016