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.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
India. Kingfisher Beer in more trouble as RBS plans to stop services in Europe
This has forced Kingfisher Beer Europe Limited, owned by Mallya through a complex web of entities, to look for alternative avenues to replace the credit line and other banking facilities provided by RBS.
Mallya-led UB Group runs its overseas brewery business through California-based Mendocino Brewing Company, which sells a number of beer brands including Kingfisher in the US, while operations in other countries are conducted through wholly-owned subsidiary United Breweries International (UK) Ltd and a step-down unit Kingfisher Beer Europe Ltd (KBEL).
Mendocino has got Mallya as its chairman and is owned by his UB Group through a complex shareholding structure. He has tried to keep the foreign operations separate from his troubled ventures in India, where a major controversy has broken out ever since he left the country amid growing clamour for recovery of dues totalling over Rs.9,000 crore of the long-grounded Kingfisher Airlines.
Mallya and his group firms are also being probed by multiple regulators and agencies including Sebi, Enforcement Directorate (ED) and SFIO (Serious Fraud Investigations Office).
As he has been evading repeated summons issued by ED, the government has now suspended his diplomatic passport.
In disclosures made to the US markets regulator, Mendocino said the Royal Bank of Scotland Commercial Services Limited (RBS) had provided an $2.8 million revolving line of credit over a decade ago in April, 2005 to KBEL. The credit line carries an interest rate of 1.38% above the RBS base rate and a service charge of 0.10% of each invoice discounted.
However, KBEL received a notice late last year from RBS regarding the bank’s intention to terminate the credit line with effect from 26 February, 2016. RBS also informed KBEL of its intention to terminate all other banking services it was providing to the company, with effect from the same date.
RBS subsequently extended the termination date to 29 April, 2016. In a regulatory disclosure, Mendocino said, “On 29 March, 2016, KBEL received a further extension of the termination date to 31 May, 2016.
The amount outstanding on the credit line as of 30 September, 2015 was approximately $813,900 (over Rs.5 crore).
“KBEL is in discussion with third parties to find alternative financing to replace the credit line and other banking services presently provided by RBS.”
In another filing, Mendocino said, “We have engaged in discussions with a bank which provided an indicative offer to provide a replacement for the RBS line of credit.”
“If KBEL does not finalize such alternate financing and provision of banking services, and if KBEL is unable to find a substitute replacement before termination of the RBS facilities, this would have a material adverse effect on KBEL and the company,” it added.
18 Apr. 2016