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.
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.
India. Tamil Nadu set to have complete prohibition; experts question implementation
Tamil Nadu Chief Minister and AIADMK Supremo J Jayalalithaa said that if her party is voted back to power, step by step prohibition will be implemented.
“Full prohibition is not possible in one signature or overnight. It will be implemented in stages," she said. The strategy would be first reducing the timing of the shops and reducing number of shops and bars, said Jayalalithaa.
AIADMK's main rival DMK also promised full prohibition immediately and said employees of TASMAC, which is in charge of wholesale liquor sales in the state, will be given alternate jobs.
Without giving details on how the party is planning to compensate the revenue loss, DMK's Supermo Karunanidhi said his party will take appropriate measures to compensate the revenue loss.
TASMAC turnover grew from Rs 139.41 crore in 1983-84 to over Rs 27,000 crore now. There are about 6800 TASMAC outlets across the state.
In 1983, Tamil Nadu State Marketing Corporation (Tasmac) was instituted to monopolise wholesale trade of Indian Made Foreign Liquor and that facilitated cost-effective excise duty collection.
In 1937, prohibition was introduced by C Rajagopalachari (Rajaji) in Salem and in phases it was implemented in other parts of the state. But in 1971, DMK Government headed by Karunanidhi withdrew the total prohibition. Karunanidhi said it was due bleak economic situation and the shops were closed in 1974, after which, he alleged, that the alchoholic beverages shops were opened by AIADMK government in 1981.
Jayalalithaa said in the last five years sales has been coming down which is a sign of state started going towards full prohibition. She noted, sales of IMFL (Indian Made Foreign Liquor) during DMK's period increased by 109 per cent to 4.78 crore boxes and beer sales which was around 1.32 crore boxes in 2005-06 has increased to 2.86 crore 2010-11, during DMK regime.
In the last five years the sales dropped to around 2.31 crore
Is complete prohibition possible?
Political and economists, who tracks the state, said it is impossible, considering revenue from liquor amounting to over 20-25% of the State's Own Tax Revenue every year. How they will adjust the revenue gap and how they will be funding Government's welfare and freebies schemes, they questioned. It may noted, DMK's manifesto did not had much of electronics freebies.
The party which was the first one to introduce the freebies concept by offering free television sets to voters, this time said it will give free mobile sets, for the poor. It also said free 3G/4G will be given to students."Both the parties do not have real intention to bring in prohibition. If they are going to stop liquor sales, they may have to borrow an additional Rs 25,000 crore to execute all those freebies," said M R Venkatesh, a Chartered Accountant and an expert in economic policy related matters.
Both the parties have not really put their thoughts into the idea and meagerly proclaims prohibition out of competitive spirit, he added.
The ruling AIADMK has been distributing free mixies, grinders, fans, cows, goats and others for the last five years. Over the past decade, successive governments in the state have spent nearly $2 billion (Rs 11,561 crore) on just three freebie schemes - colour television sets, laptops and household appliances. Tamil Nadu's outstanding debt in 2014-15 was Rs 1,81,036 crore and this is expected to increase to Rs 2,11,483 crore.
When the AIADMK took charge State debt was Rs 1,01,349 crore. One of the reasons is various freebies and subsidy programme, alleges some political parties."Closure of TASMAC shops will result in loss of income to the level of thousands of crore of rupees to state, which would force the government to suspend several of its welfare measures," said an official. He added the fact that there is not much scope left for further imposing of taxes.
Venkatesh said that it does not mean that prohibition cannot be implemented, and he believes that it has to be brought in and reminded that the State of Gujarat is revenue surplus even after prohibition, regardless whether their policies are good or not.
However, it means cutting down expenditure in all means and stopping various freebies. Tamil Nadu has projected a revenue surplus of Rs 664.06 crore for 2014-15, but reported a revenue deficit of Rs 6,407.56 crore.
While the projection for 2015-16 was a revenue surplus of Rs 783.43 crore, the revised estimates shows a revenue deficit of Rs 9,481.14 crore. For 2016-17, the projection is revenue surplus of Rs 311.45 crore, while the budget estimates is a revenue deficit of Rs 9,154.78 crore. The other problem, according to experts, in implementing total prohibition could lead to illicit liquor. Duplicate liquor will be sold in black, which may even cause health hazards to the public and it will damage the ruling party.
Political critics also alleges that many of the distilleries are owned by politicians and over Rs 3,500 crore worth of liquor, are supplied by these distilleries. He questioned if suspension of freebies, expenditure optimisation, industrialisation gets further boost and other measures can be carried out, then there is a feasibility. But at the current environment none of this is possible.
13 Apr. 2016