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.
Booze tax goes up in Malaysia
There will be no cheers from drinkers now that a revised excise duty, calculated according to the alcohol level in beverages, has been introduced.
Coffeeshop and bar owners, already grappling with high operating costs, are bracing for a further cut in profits as a result of this new move.
The excise duty, which came into effect on March 1 – the first in 10 years, following three consecutive tariff hikes from 2004 to 2006 – simplifies the taxing of the beverages by basing it on the alcohol value per litre of each product.
This means beers with a higher alcohol level could see a price increase while beverages with less than 5 per cent alcohol content could become cheaper.
The news left a number of industry players and bar owners confused while some said the price hike would be low enough for them to absorb.
But others said they have to wait to see how their business fares before considering any rise in retail pricing.
Alcohol Consumer Rights Group Malaysia founder Deepak Gill said the price hike would be “easy to absorb” for businesses, with not much impact to the consumer or seller.
“From what I see, it hasn’t really gone up that much. In fact, for a couple of items, the price has gone down,” he said.
Despite that, Deepak contends that Malaysia’s taxes on alcohol are still “disproportionately high” and have caused such beverages to be seen as a luxury.
Malaysia’s excise duty on alcoholic drinks is the second highest in Asia and third highest in the world.
Connexion Group chief executive officer Kent Chua, who manages the Beer Factory, said he needed to think about how to strike a balance between keeping his customers happy and staying profitable.
“The hike is on lagers, that is Tiger beer, which accounts for 60 per cent of our beer volume. So that hike is significant because our margin has already been thinning across the years amidst rising business costs.
“We foresee challenging times ahead because the increase will further strain our already narrow margins. We will have to see to what extent we can absorb it,” he said.
Guinness Anchor Bhd managing director Hans Essaadi was concerned that this latest development would increase demand for illicit and unregulated alcoholic drinks.
“The state of the economy is having a significant impact on businesses and consumers, and this will make it more challenging for our industry,” he said.
The spirits and wines industry would also be affected by the new tax structure, though less so than the beer industry.
A spokesman from Moet Hennessy Diageo (MHD) Malaysia said there would be no immediate change in prices for their products.
MHD’s portfolio includes the best-selling Johnnie Walker whiskies, Hennessy cognac and Moet & Chandon champagne.
A spokesman for a local distributor said that not all spirits and wines would be affected.
“The entry-level products will probably see an increase in cost but the premium products should either get cheaper or stay the same price,” he said.
“For instance, wines below 100 (US$24) will probably increase in price while wines costing more than that will not. The same goes for spirits,” he said.
“Products with less alcohol will enjoy better tax relief but those with higher will be affected.
“Basically, the government is telling us that ‘If you want to drink something with more alcoholic content, you must pay more,’” he said.
Another distributor said he was worried that the new excise structure would affect the availability of lower-priced, entry-level wines.
“Distributors may stop bringing in low-end wines, such as those that cost less than 40 ringgit, and concentrate on products in the mid and high ranges.
“So in future, the cheapest wine you are able to get may be a mid-range one that is 40 ringgit and more,” he said, asking for anonymity.
(US$1 = 4.13 ringgit)
3 Mar. 2016