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....
China Resources Beer to raise HK$9.5b in rights issue, as it preps to buy SABMiller’s 49pc stake in Snow Breweries
The brewery behemoth under Chinese state-owned conglomerate China Resources said part of the money raised would be used to fund the purchase.
A rights issue - an offering of shares to existing shareholders - was carried out at a 30.8 per cent discount to Tuesday’s closing price at HK$16.94, comprising as many as 811 million rights shares on the basis of one for every three existing shares.
As of 11:30am, CR Beer’s shares were at HK$16.30, down 3.78 per cent from Tuesday’s close.
The deal, which was believed be one of the biggest rights issues in Hong Kong’s capital market during the last year, came months after the beer maker announced proposals to boost its stake in the country’s biggest brewing company.
“We will continue to explore business expansion opportunities through both organic growth and acquisitions,” Chen Lang, chairman of CR Beer said. “To capture these growth opportunities, we consider the rights issue to be in the best interests of the company and its shareholders as a whole.”
CR Beer’s co-owned Chinese brand Snow is the world’s largest-selling beer, accounting for 23.2 per cent of the beer market in China in 2014, according to data from Euromonitor, an international market research company.
But it is also faced with intensifying competition from other major players, including Tsingtao Brewery, Beijing Yanjing Brewery and Carlsberg, as well as a shifting preferences among Chinese consumers who are increasingly turning to higher-end beer.
CR Beer’s US$1.6 billion acquisition of SABMiller’s stake in CR Snow is anticipated to go through by the end of this year. Nomura analysts said in November that SABMiller’s 49 per cent stake is Snow Breweries could fetch up to US$3.6 billion.
Over the last year, big transactions of this kind in Hong Kong include a rights issue by Chinese conglomerate Fosun International, which raised over HK$11.6 billion last September.
6 Jul. 2016