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.
Foreign investors may flatten Vietnam beer market
The lucrative potential for profits explains the avid interest and arrival of international brands in the Vietnamese marketplace over the six years running up to 2014 the study concludes.
At the end of 2014, Thai Beverage (ThaiBev), a large liquid refreshment company based out of Thailand first tendered an offer to acquire a 40% minority stake of Sabeco, the largest beer brewer and distributor in Vietnam.
According to the ‘Vietnam Beverage Report 2015’ published by VIRAC, Sabeco was the largest brewer in Vietnam commanding a 34% market share by volume and 46% by revenue.
For 2015 Sabeco reported a year-on-year increase of 28% in its net profit to US$159.5 million (VND3.6 trillion). Its revenue grew 10% for the year to US$1.2 billion (VND27.16 trillion), principally from beer sales.
Meanwhile, another Thai corporation, Singha, has also signalled its interest in acquiring a controlling stake in government owned brewer Sabeco, best known for its iconic Saigon beer brand.
The Vietnam government now holds a roughly 89% stake in Sabeco, with Dutch brewer Heineken the second largest stockholder at 5% of the outstanding shares.
Sabeco last May announced plans to sell 53% of its current outstanding shares at public auction later this year, which has also garnered the attention of other well-known brewers such as Japanese Asahi and Kirin and London-based SABMiller.
Along with Sabeco, a variety of other distillers in Vietnam have also been getting attention of foreign investors. At the end of 2011, Huda Beer (Hue Beer) was acquired by Carlsberg, one of the largest foreign brewers in the Vietnam market.
The internationally recognized Danish beer brand, Carlsberg, first stepped foot in the Vietnam market in 1993 when they joined in a venture with Viet Ha Beer Company.
Later, in 2007, Carlsberg acquired a 30% stake of Ha Long Beer Company and became a strategic partner of Habeco, a corporation as of 2015 holding a 19% market share of the Vietnamese beer market as the second-largest brand.
The investment of international firms will bring a lot of advantages for the domestic beer businesses including abundant financial resources and advanced technology concludes VIRAC.
However, many leading market analysts are not convinced this is a good thing and have voiced legitimate concerns that after the acquisition by foreign investors of these domestic beer brands, the profits will be taken abroad.
This is a point far too often overlooked—all of the foreign direct investment that flows into Vietnam will eventually flow back out along with the profits—for distribution to foreign shareholders and other overseas owners.
When that day of reckoning comes, many touting so called benefits of foreign investment will be in for a very sobering experience, they say, and the nation may finally confront the stark reality that domestic ownership was better.
The ‘Vietnam Beverage Report 2015’ draws an all-around rosy picture about the overall liquid beverage market in Vietnam, including the beer industry.
It focuses primarily on analysing the beer, soft drink and the hard liquor segments. In addition, the report provides a forecast for the near future of the various segments and clarifies several potential threats to foreign investors.
All leading producers and main suppliers in the market such as Sabeco, Habeco, Tan Hiep Phat and foreign invested companies like Coca-Cola Vietnam or PepsiCo are touched upon in the analysis.
But the report falls short when it comes to addressing issues affecting the beer industry in any substantive way say many analysts. For example, it fails to address the need for the Vietnam government to preclude beer brewers from also distributing their own beer.
If a foreign investor is allowed to acquire a controlling stake in Sabeco later this year in a public auction, what regulations are in place to prevent that foreign brewer and distributor from also controlling which beers end up at which bars, restaurants and stores?
Without adequate regulation in place, this means that much of the interest by foreigners in acquiring Sabeco might result from the fact they could purchase an established brand while effectively, and legally, shutting out and flattening all of the other domestic and foreign competition.
4 Jul. 2016