The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
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.
Vietnam’s state-owned top brewer Sabeco to sell 53% at one go, deal valued upwards of $1b
The sale will only be finalised after government approval.
If the proposal goes through, It will constitute yet another attempt by Saigon Beer, Alcohol and Beverage Corporation at privatisation as the company has been exploring the possibility of bringing in external investors for a while now.
In May 2015, DEALSTREETASIA reported that Sabeco was planning to divest state holding to a minority 36 per cent, and had added that nine firms had already submitted bids to buy a stake in it. The report also said that the deal would be upwards of $1 billion.
Prior to that, this portal had reported that several foreign players, including Thai Beverage Group, Singha Corporation – another Thai brewer, Japan’s Asahi Breweries, Heineken (which already holds five per cent stake in the Vietnamese state-owned beer producer) and US-based SAB Miller, were examining potential investments in Sabeco.
Thaibev’s billionaire owner Charoen Sirivadhanabhakdi had even valued Sabeco at $2.4 billion.
Earlier Vietnam’s Ministry of Industry and Trade – which represents the government ownership in Sabeco – was looking at two different options – to sell the stake either in a single tranche, worth about $1 billion, to reduce the government’s holding in it from 89.59 per cent to 36 per cent; or to divest the stake in two batches of 40 per cent and 13.59 per cent.
“Normally when a company itself proposes a divestment plan, the execution will follow that proposal,” said an analyst with a top Vietnamese securities firm, who declined to be named.
Meanwhile, the Vietnam Association of Financial Investors (VAFI) has proposed that the government, which currently holds an 89.6 per cent stake in the company, should exit the brewer and earn around $3 billion.
Sabeco holds 46 per cent market share, according to the VnExpress.net. Its turnover has been increasing over the past years, having reached VND8.1 trillion (up 2 per cent) and VND3.4 trillion (up 25 per cent) in 2015.
In addition, Sabeco is investing in 26 subsidiaries and affiliates operating in various sectors, from beverage processing, packaging and labelling to mechanics and hydropower.
As the company looks to auction the 53 per cent stake in one tranche, the buyer will gain control in Vietnam’s largest beverage firm and its production and distribution chain across the country. If a foreign corporation wins the bid, competition in the Asia’s fifth largest beer market will become extensively fierce.
While Sabeco is still holding its number one position in the local market, foreign beer makers have rolled out their own play. Heineken – which has a 5% stake in Sabeco – achieved the second rank in terms of beer consumption last year, and Japan’s Sapporo, which has bought out the local joint venture.
Singha, also reportedly keen on buying Sabeco, expanded into Vietnam through a $1.1 billion acquisition of Masan Consumer and Masan Brewery, two F&B subsidiaries of Masan Group.
Sabeco former chairman Phan Dang Tuat had earlier said that the company did not intend to sell majority stake to foreign investors.
“We should be cautious when working with large firms. Cooperation in the same industry can be beneficial, but the threat is that we might soon lose our brand. By all means, annexationism always exists in the business method of large companies,” Tuat had told reporters last year.
The securities analyst, quoted above, was neutral about the buyer being a local or foreign entity.
The sale will be through an auction, which means whoever pays higher gets the deal, this analyst added. If one were to go by VAFI’s valuation of Sabeco, then the deal to sell a majority stake in the brewer will be worth over $1.5 billion.
VAFI also urged Sabeco to list for a better corporate management. “Sabeco was a much bigger company than Vinamilk 10 years ago, when its profits almost doubled Vinamilk’s profits. But the situation has changed. Now Vinamilk’s profit is three times higher,” the association vice president Nguyen Hoang Hai said.
“Sabeco and Habeco (another state-owned beer firm) have seen slow growth despite their potential,” he added.
Making Sabeco a fully private company and listing its shares will boost the company’s management, and will also supply a source to the local stock market, according to the association.
Vinamilk has now become the largest listed company by market capitalisation. It is a favourite portfolio stock of a spate of foreign companies and funds such as F&N Dairy Investment Pte Ltd, Deutsche Bank and Norges Bank, among others.
Meanwhile, it has been more than eight years since Sabeco’s IPO (where Dutch brewer Heineken acquired a 5 percent stake), but the company has not been listed yet, and this is in violation of Vietnam’s latest rules that mandate “IPO-ed” businesses to list their shares within a year.
“It is time to get rid of individual interest to target business transparency, and use the divestment proceeds for bigger causes,” the VAFI said.
17 May. 2016