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.
Vietnam. Sabeco, Habeco say no to exchange listings
Saigon Beer-Alcohol-Beverage JSC (Sabeco) in the south and Hanoi Beer-Alcohol-Beverage JSC (Habeco) in the north provide about two thirds of the beer for the local market, which ranks No.1 beer drinker in ASEAN and in the top five of Asia, with more than 4.5 billion litres consumed every year.
Lê HồngXanh, the Sabeco deputy general director, told local media that Sabeco was not eligible for listing. Under the current regulations, a joint stock firm, which was shifted from the State-owned enterprise, must have at least 20 per cent of stakes owned by other investors, could be able to be listed on the exchanges.
Meanwhile, after equitisation the Ministry of Industry and Trade (MoIT) still manages about a 90 per cent stake in both firms, on behalf of the State.
Phan Đăng Tuất, Head of the Committee for Business Innovation and Development at MoIT and former chairman of Sabeco, said both firms are not eligible for listing yet. He said final divestment from the two firms depends on Government fiscal and financial policies.
Xanh, the Sabeco deputy director, told local media that the company submitted a plan to reduce state control from 90 per cent to 36 per cent. He is still waiting for the Government’s response.
But according to many securities experts, the failure to list the two firms also violates current regulations which require joint stock firms to be listed on the market after a maximum of one year of equitisation.
Experts said the Government wants to turn the stock market into a channel that mobilised capital for the new development of the economy. However, the unlisted two brewers, among the largest capital firms in Việt Nam, would not contribute to that target. Their absense on the local exchanges would instead make the local stock market less attractive for investors.
In 2009, one year after equitisation, the two brewers were fined by the State Securities Commission for not registering for their listing under the regulations. Now they are still among more than 700 public companies not yet listed on any market.
In other news, giant milk producer Vinamilk (VNM), which used to earn half the profit of Sabeco, has now grown threefold after 10 years on the stock market. Currently, VNM was one of the largest caps, one of the attractions on the southern exchange.
After completing their equitisation two years later, both brewers reported modest results despite great potential with increasing demand for beer in Việt Nam.
The local brewery industry achieved an average of seven per cent annual growth between 2011 and 2015. Beer production reached 3.4 billion liters last year, a 4.7 per cent year on year increase, according to a report released by the Vietnam Beer Alcohol Beverage Association in 2015.
In 2015, Sabeco was the country’s largest brewer. It reported production of 1.38 billion liters last year, to keep its leading position. But the No. 2 position in the market was taken from Habeco by Heineken.
Vafi urges gov’t to divest large beverage firms, list Sabeco and Habeco
The Việt Nam Association of Financial Investors (Vafi) sent a proposal for the divestment of State holdings and the listing of Sabeco and Habeco.
Vafi asked the Government to sell all State capital in the two firms, where MoIT still holds 90 per cent and 82 per cent stake in Sabeco and Habeco’s charter capital, respectively.
The divestment would help the State raise $3 billion, which should be used for developing public transportation projects, Vafi said.
The association said the divestment process should be conducted through auctions to ensure transparency.
Vafi also urged that the listing of Sabeco and Habeco on the exchanges be hastened to improve transparency and efficiency. Vafi has already asked this many times before.
So far, big brewers showing interest in Sabeco include Ashahi (Japan), Heineken (Netherlands), Thaibev (Thailand), and SAB Miller (US), as well as some local firms with large amounts of capital. — VNS
17 May. 2016