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.
Vietnam has high tax on dairy products, low tax on beer & liquor
The Ministry of Finance’s reports all show a constrained state budget, which has forced the ministry to borrow more money for the government’s spending.
Le Dang Doanh, a renowned economist, who was head of the Central Institute of Economic Management (CIEM), affirmed that raising luxury tax on products is a reasonable decision.
He said the products, which may harm people’s health, are not taxed high enough to discourage the consumption. Meanwhile, essential goods, including dairy products, necessary to people are taxed too highly.
“It is necessary to raise tax so as to help ease the burden of diseases caused by harmful products,” Doanh said, adding that Vietnam should follow other countries in this issue.
Sweden, for example, imposes very high tax on beer and liquor, and Swedish citizens have to show identity cards when buying the products.
Nguyen Tuan Lam from the WHO (World Health Organization) Office in Vietnam commented that raising luxury tax would be the ‘win-win’ solution for both the government and people.
“The government would be able to collect more money to cover its spending, while people would be able to avoid diseases,” he said, adding that the experience from Thailand and the Philippines shows this would be a right decision.
A lot of non-government organizations including RTCCD (Hanoi Research and Training Center for Community Development), VPHA (Vietnam Public Health Association) and NGO-IC (The Non-governmental Organizations-Information Center) sent official documents to the National Assembly, expressing their support to the plan on raising luxury tax on beer, liquor and cigarettes.
According to Ha Huy Tuan, deputy chair of the National Assembly’s Finance Supervision Council, luxury tax collection is an important contribution to the state budget revenue which makes up 7 percent of total revenue.
Meanwhile, the revenue from from beer, liquor and cigarette accounts for 65 percent of total revenue from luxury tax.
An analyst estimated that with the luxury tax changes, the retail prices of beer, liquor and cigarettes would increase by 2-7 percent.
The National Institute of Nutrition (NIN) has repeatedly recommended the strengthening of the use of dairy products.
According to Dr Le Bach Mai, Vietnamese calcium dietary has been unchanged in the last 30 years at 500-540 mg a day, just 50-60 percent of the recommended level.
Vietnamese dairy product consumption is modest, at 11 liters per head per annum, equal to half of Thai consumption.
25 Apr. 2016