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....
Beer Megadeal Said to Be Close to Winning Chinese Approval
Approvals for both transactions could come as soon as this month based on typical review timelines, clearing one of the final hurdles for the biggest beer deal in history.
Though China’s Ministry of Commerce may attach some conditions to the deal, including the Snow divestiture, regulators see no major hurdles, said one of the people, asking not to be identified because the deliberations are private. Some local beermakers told the ministry that they don’t object to the takeover as it won’t have a big impact on the Chinese market, another person said.
SABMiller shares closed up 3 pence to 4,306 pence in London, erasing an earlier decline. AB InBev shares fell less than 1 percent to 114.95 euros in Belgium.
The merged company would redraw control of the global beer market. Following divestitures, the deal will keep Budweiser, Beck’s and Stella Artois under AB InBev’s roof, while ceding control of brands including Miller in the U.S. and Peroni and Pilsner Urquell in Europe.
In China, the companies agreed to sell SABMiller’s 49 percent stake in its joint venture with China Resources Beer (Holdings) Co., which controls Snow beer, back to its partner.
In clearing these global hurdles, the beer mega deal contrasts with other big proposed tie-ups that unraveled amid antitrust scrutiny, including Halliburton Co.’s failed bid for Baker Hughes Inc., Staples Inc.’s foiled merger with Office Depot Inc. and General Electric Co.’s decision to abandon the sale of its appliance business to Electrolux AB. In the beer deal, the sides were aggressive in offering divestitures from the start --- including the plan for SABMiller to sell Snow -- which may have ultimately helped reduce regulatory resistance, antitrust lawyers have said.
The U.S. Justice Department may clear the tie-up as soon as this month, people familiar with the process have told Bloomberg News. South Africa has yet to bless the deal, which has hit some obstacles amid protests from local unions.
AB InBev and SABMiller declined to comment. China Resources and the commerce ministry didn’t immediately respond to queries.
The merger plan, which the two companies reached in November as a way to gain access to emerging markets, has already won antitrust approval in more than a dozen jurisdictions, including the European Union.
In March, China Resources announced it would buy out SABMiller’s stake in their Chinese venture for $1.6 billion. That deal is also nearing approval from China’s commerce ministry, the people said.
In the U.S., AB InBev has agreed to sell SABMiller’s stake in the MillerCoors joint venture. It may also have to agree to further conditions related to beer distribution, according to people familiar with the matter. Smaller brewers and wholesalers want officials to restrict AB InBev’s control and influence over how beer gets on to store shelves, according to the people.
9 Jun. 2016