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.
India. Why only Vijay Mallya?
The Supreme Court on Wednesday issued notice to Mallya over a plea seeking to stop him from leaving the country. Attorney general Mukul Rohatgi, representing the consortium of 17 banks, informed the court that Mallya left the country on 2 March, according to the Central Bureau of Investigation. He is likely in London, Rohatgi added.
To be sure, Mallya had not been asked not to leave the country by anyone when he left on 2 March.
India’s largest lender State Bank of India (SBI) declared Mallya a wilful defaulter in November. Mallya’s Kingfisher Airlines Ltd, which was grounded in 2012, owes around Rs.9,091 crore to the consortium of banks.
India’s top investigative agencies are now gunning for Mallya. They want Mallya’s passport, arrest, asset disclosures, money. Banks have become aggressive in their efforts to recover money from him in the last two weeks, especially since news of his sweetheart deal with Diageo Plc. to exit United Spirits Ltd broke.
But why so late and why only Mallya?
“The question is why only Mallya. There are many other defaulters. Though Mallya and UB Group companies are wilful defaulters, the culpability of banks also needs to be highlighted,” said Shriram Subramanian, founder, InGovern Research Services, a proxy advisory firm.
Subramanian said a recent report by a leading brokerage firm highlighted the financial stress at the top 10 Indian conglomerates including Lanco Group, Jaypee Group, GMR Group, Videocon Group, GVK Group, Essar Group, Adani Group, Reliance Group, JSW Group and Vedanta Group. His reference is to CSFB’s House of Debt report .
Banks should go after other groups and wilful defaulters as well, Subramanian said.
“There is a rot in the system, a nexus between politicians, lenders, bureaucrats and corporates. It’s the time for a clean-up by exposing all the defaulters. One should not forget Central Bureau of Investigation (CBI) had arrested the chairman and managing director of Syndicate Bank Sudhir Kumar Jain for allegedly accepting a bribe to enhance the credit limit of private companies by-passing rules,” Subramanian said. That was in 2014 .
“Lenders should learn from the Mallya episode, and should start adopting prudent lending practices, while also pursuing recovery, including change of ownership, from defaulting borrowers,” he said.
Loan approvals to potentially stressed companies have risen 85% since 2011-12 as banks continued to lend to such borrowers despite deteriorating cash flows and increased debt on their balance sheets, UBS AG said in a report in July 2015.
The report was based on a proprietary survey conducted by UBS pertaining to a sample of around 100 potentially stressed companies, covering some $100 billion of loans. Over 7,000 collateral documents filed at the Registrar of Companies that are used to secure loans were analysed for the survey, UBS said.
“Mallya may be far more high profile than others, but he is not the only one,” said Amit Tandon, founder and managing director of proxy advisory firm Institutional Investor Advisory Services India Ltd. “There are many other willful defaulters and the banks need to methodically pursue all these defaulters. The support shown by the (Indian) courts, should encourage lenders to intensify their efforts on recovery,” Tandon said.
The Reserve Bank of India (RBI) has been trying to find ways to resolve the stressed asset problem faced by state-run banks for the last two years.
In January 2014, RBI announced a new framework to deal with stressed assets, as part of which banks were asked to form a joint lenders’ forum to recognize and resolve stressed assets.
The regulator is taking a zero-tolerance approach towards bad loans and has asked banks to clean up their books by March 2017.
As part of this effort, banks were told to classify visibly stressed assets as bad loans in the December 2015 and March 2016 quarters.
The clean-up has meant a surge in NPAs.
Gross NPAs of 39 listed banks surged to Rs.4.38 trillion in the quarter ended December 2015 from Rs.3.4 trillion at the end of the September quarter, according to data collated by corporate database provider Capitaline.
Mallya has previously said he has been made the face of a problem not of his making.
“Personally I am not a borrower or a judgement defaulter,” Mallya said on Sunday.
He added that despite pledging blue chip securities and depositing significant amounts in court, a successful disinformation campaign has ensured him becoming the poster boy of all bank NPA’s.
“In fact, banks have NPAs of Rs.11 lakh crore and have borrowers who owe much more than the amount allegedly owed by Kingfisher Airlines to the banks—a fact never alluded to or widely reported by the media as in my case,” Mallya said.
Mallya pointed out that none of these large borrowers (who owe significantly more than Kingfisher Airlines) have been declared wilful defaulters. Mallya said he and his United Breweries Holdings had been declared wilful defaulters by certain banks on technical grounds.
Hemindra Hazari, an independent analyst and a long-time watcher of the banking sector, said Mallya’s case was a high-profile one and a test case for Indian lenders.
“Mallya is a high profile defaulter who throws lavish parties and publicises the same. There could be lavish parties organised by other defaulters, but they don’t publicises it like Mallya,” Hazari said.
Reserve Bank of India governor Raghuram Rajan, too, has been pushing banks to get tough on defaulters
In a 22 January interview with NDTV, Rajan took a dig at those who owe banks money, but continue to lead lavish lifestyles.
“If you flaunt your yacht, massive birthday bashes, etc, even while owing the system a lot of money... it seems to suggest that you don’t care. I think that is the wrong message to send out. If you are in trouble, you should show that you care by cutting down your expenses,” Rajan told journalist Shekhar Gupta on NDTV’s Walk The Talk show.
Mallya was always known for his flamboyance. He built a reputation for the fast life and flashy parties. He even bought a yacht (the Indian Empress). And in 2003, his UB Group launched the Kingfisher Calendar, which featured top models in bikinis.
Banks are owed a significant amount by wilful defaulters, a term used for borrowers who don’t repay loans although they can afford to do so.
Banks and investigative agencies are right in going after Mallya as the lenders will be facing questions of defaults while Mallya is leading a luxurious life without paying his employees and banks, Hazari said.
“Lenders should start the clean up act from Mallya.”
10 Mar. 2016