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. GAB’s net profit up on higher sales volume
In announcing its quarterly results to Bursa Malaysia, the malt liquor brewer said for the quarter ended March 31, its bottom line grew to RM50.85mil compared with a year earlier, spurred by higher sales, phasing of commercial spend and more effective commercial investment.
The company’s revenue, meanwhile, rose 4.9% to RM458.9mil from the same quarter in 2015 mainly due to higher sales volume and better brand mix on the backdrop of good festive performance during the Chinese New Year celebrations.
GAB, which is in the process of changing its name to Heineken Malaysia Bhd, added that the underlying growth was partially off-set by the replacement of sales tax by the goods and services tax.
For the nine-month period to March 31, net profit jumped 20.3% to RM204.8mil on 2.75% higher revenue of RM1.39bil.
GAB attributed the better bottom line mainly to higher sales and improved cost efficiency in commercial spending. “Our robust commercial strategy backed by investments behind brands and effective channel executions have been yielding good results,” it said.
On its prospects, the company said the group continued to operate in a challenging environment with the recent increase in excise duties for alcohol products (effective since March 1) and subdued Malaysian consumer sentiment,
“The group will continue to focus on delivering on its key strategies for the financial year, whilst staying agile and adapting quickly to any changes in the environment. Following a resilient first nine months’ performance, the group remains confident that it will deliver a good performance for the financial year ending Dec 31,” GAB said.
In a statement, GAB managing director Hans Essaadi said its performance continued to show solid growth, credited to its effective long-term strategies targeting tailored core brands’ activation platforms, prodcut innovation, and operational efficiencies.
“We expect to maintain the momentum going forward by leveraging on Heineken’s strong global brands’ activation platforms, and supported by an efficient global supply chain which opens opportunities for cost savings through more strategic procurement,” he said.
GAB is cautious of increasing prices as this will push consumers away from duty-paid products to contraband.
Essaadi said that it was imperative for the beer and stout industry to continue to work with the Government to further develop a sustainable business eco-system for local businesses.
“We appreciate and fully-support the efforts of the Royal Malaysian Customs Department in combating contraband beer, which continues to lead to revenue loss to the industry and also represents significant loss in taxes to the Government,” he added.
To commemorate the company’s 50th Anniversary, on Jan 19 GAB declared a single-tier special dividend of 30 sen per 50 sen stock unit on top of the single-tier interim dividend of 20 sen unit giving a total dividend of 50 sen for the financial period ending Dec 31, payable on April 15.
14 Apr. 2016