10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
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.
India. Mallya may give UBL control to Heineken to settle with banks
Mallya's counsel made an offer before the Supreme Court to pay Rs 4,000 crore to settle with a consortium of banks fighting to recover unpaid loans. The proposal rests heavily on his ability to divest shares in UBL, in which Heineken owns nearly 44% while Mallya's holding is slightly above 32%.
"This offer will be met from two sources — shares in UBL and a residual stake in United Spirits. Mallya will have to offer shares to Heineken as the latter has pre-emptive rights on them," said a source close to Mallya on condition of anonymity. The Supreme Court, depending on the response from the banks, will have to lift a lower court freeze on Mallya and his Indian investment company UB Holdings selling assets, the source added.
An emailed query to Heineken remained unanswered. The Amsterdam-based company had earlier told TOI that it was watching developments involving Mallya. A spokesperson for Mallya said, "We have no comments to your queries."
UBL has a current market value of almost Rs 22,000 crore, rendering Mallya's stake worth Rs 6,700 crore, or a little over $1 billion. Mallya, who recently resigned as chairman of United Spirits, will look to offload his remaining 4% stake in the distiller. However, Diageo Plc, which acquired USL from him, already has controlling shares and has no right of first refusal on these shares. Mallya's shares, though pledged, are worth about Rs 1,500 crore.
In context, Mallya would part-sell his UBL stake as part of the loan settlement and try to remain its chairman. The latest settlement offer along with Rs 1,200 crore (from an earlier sale of assets) in an escrow account would cover the Rs 5,000-crore principal loan amount payable to the banks, sources added.
In 2009, Heineken entered into an equal joint venture with Mallya to jointly run UBL but hiked its holding through market purchases of Mallya's shares sold by the banks in the past two years. These transactions freed Heineken from the 'equal shareholding and joint management' clause, TOI reported in July last year. This had set the stage for Heineken to claim management control, but the foreign partner was in no tearing hurry given its cordial ties with Mallya.
31 Mar. 2016