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4-2017

Global hop market

A 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 Russia

Germany 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.

Instead of local Sabeco beer, will Vietnamese choose beer from Thailand?

Vietnamese, from economists to housewives, now are talking about the presence of Thai manufacturers in nearly all business fields. Thai products have been flooding the Vietnamese market, from footwear to toothpaste, from electric household-use appliances to cosmetics.

Experts have warned that more and more Thai goods will penetrate the domestic market, especially when they are backed by powerful distribution networks.

Thai Central Group has taken over Big C retail chain and joined forces with Nguyen Kim to buy Zalora, an online shopping system. A source said Thais now control 50 percent of the Vietnamese retail market.

Sources said it was highly possible that Vietnamese would also have Thai beer to drink in the future.

Sabeco has submitted to the government the plan to divest 53 percent of Sabeco’s stakes to reduce its ownership ratio from 89 percent to 36 percent.

The sources said more than 10 investors, both Vietnamese and foreign, have registered to buy Sabeco’s stakes. There are big names among Vietnamese potential investors, such as Saigon Securities Incorporated (SSI), Anh Duong Company and Duc Binh Group.

Meanwhile, Japanese Ashahi, Dutch Heineken, Thai ThaiBev and US SAB Miller are included on the list of foreign investors.

Of these, ThaiBev is believed to be the most active investor who shows strong desire to buy Sabeco’s stakes.

The information about Sabeco’s sale of 53 percent of stakes appeared in mass media first in November 2014. At that time, ThaiBev, which owns Chang beer and Oishi green tea brands, expressed its willingness to buy the lot of shares, valuing Sabeco at $2 billion.

At that moment, Sabeco held 46 percent of the domestic market share with two well-known brands – 333 and Bia Sai Gon.

In early 2015, ThaiBev once again voiced its wish to buy 40 percent of Sabeco’s stakes at $1 billion, which means total value of $2.5 billion for Sabeco. However, the deal failed as Sabeco thought the offered price was lower than its actual value.

Analysts commented that ThaiBev is attracted by the Vietnamese attractive market. With 90 million people, in the first four months of 2016, Vietnam consumed over 1 billion liters of beer, or 10 million liters a day.

If ThaiBev can acquire Sabeco, it would be able to have 40 percent of the domestic market.

The owner of ThaiBev proves to have good understanding about the Vietnamese market. He now holds 11 percent of Vinamilk through Fraser & Neave, a subsidiary, and runs 5-star hotel Melia Hanoi through TTC Land.

30 May. 2016

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