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.
Malaysia. Guinness Anchor Bhd cautious about hiking prices in near term
The market leader in the brewery business had adjusted the prices of its product lines as soon as the new tax structure kicked in on March 1 when the Government replaced the malt liquor’s tax struture, which led to a hike in the price of beer by between 8% to 10%.
Asked whether another price hike was likely to take place after the Anti-Profiteering Act period ended on June 30, managing director Hans Essaadi said with consumer sentiment in its 10-year low, it would be wary.
“Hiking prices during this time would not make sense and we are cautious. But, we also run a commercial business where we are diluting our margins.
“It is something that we need to look at, as we won’t be able to do any price hike until a certain period of time,” said Essaadi after a tour of the brewery yesterday in conjunction with its Golden Jubilee.
The procurement agreement with Heineken NV had benefitted GAB, he said, adding that it was able to purchase raw materials at lower price.
“The procurement ensures pricing are stable,” he added.
The tour was also held in line with GAB’s rebranding exercise just after Dutch brewer Heineken NV became the major shareholder of GAB in October last year.
Heineken holds a 100% stake in GAPL Pte Ltd, which in turn owns a 51% interest in GAB.
Upon shareholders’ approval at an EGM to be held on April 20, GAB will be known as Heineken Malaysia Bhd.
Meanwhile, UOBKayHian (UOBKH), in its note, believed that consumers were able to accept the price hike of only 3% to 5%.
Although brewers had partially absorbed the excise duty hike on malt liquor with high alcohol content of more than 6%, the financial impact was modest as these beverages account for less than 10% of the brewer’s sales volume, according to UOBKH.
“Depending on the sales volume and competitive dynamics, the industry would have sufficient pricing power to implement a modest price hike after June 30. Brewers are likely to pass on costs, hence restoring their margins,” it said.
But, Essaadi, still remained leery on the outlook, stating that it hoped to do better this year and perhaps pick up some market share. “We will be having more brand portfolios, but we will also take of those that are not doing well,” he noted.
1 Apr. 2016