Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
Beer market of Vietnam: “Young tiger”Vietnam is one of the few big beer markets that continue to grow steadily. The beer popularity results from its low price, street consumption culture, and social motives. The outlooks of beer market as well as the Vietnamese economy inspire optimism, though the country is heavily dependent on export of goods. The state regulation can be called liberal, but the key risk for brewers is harbored in intensive rising of excise. Within TOP-4 there are two leaders, Sabeco and Heineken that grow at the fastest rates. The first company effectively employs its capacities, the second one focuses on marketing technologies. Almost 80% of the market belongs to century-old brands, yet the middle class and the youth are shifting their interest toward international premium that is growing taking share from the mainstream.
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.
China Resources Beer shares down 4% after rights issue
The beer producer said it would issue 811.04 million rights shares in order to raise approximately 9.5 billion Hong Kong dollars ($1.22 billion) -- a sum that will partially cover the $1.6 billion transaction of a 49% stake in China Resources Snow Breweries announced in March.
The deal was apparently the result of the merger between Belgium brewer Anheuser-Busch InBev and U.K.-based SABMiller. Their combined market share in China, topping 40%, was said to have triggered antitrust concerns. Selling down Snow, which commands a quarter of the Chinese market, would increase the likelihood of gaining regulatory approval.
Brushing off competition worries, Lai Po-Sing, China Resources Beer's chief financial officer, said at a briefing on Wednesday that "there is no foreseeable stumbling block" to the company's acquisition so far.
"We are very confident that it can materialize," said Lai, adding that the company is considering using internal resources, external financing, and borrowings from parent company China Resources Holdings, to fund the rest of the deal.
The rights issue, likely to be the largest in Hong Kong since last year, is claimed to be fully underwritten by CRH Beer, a controlling shareholder of China Resources Beer and affiliate under the same parent.
The parent's pledge of absolute support, said Lai, is "a reflection of [its] optimistic outlook for the beer industry in China" as well as China Resources Beer. "It is not looking to increase control of the company at all."
Excluding the divested non-beer business, the group recorded a 14% surge in underlying profit to HK$831 million and a 3.2% increase in average selling price in 2015. However, its revenue at HK$34.8 billion was flat compared with a year ago.
A slowing economy and maturing consumer tastes on the mainland has hurt the company which has long been relying on the mass market.
"China's beer market in the first half is not doing very well," said Hou Xiaohai, China Resources Beer's CEO. "It's unlikely that the second half will see an upturn, as macroeconomic conditions remain bleak."
Hou reiterated that the company will focus more on the mid- to high-end markets. Launching "distinguishing" beers is one way to cater to a more sophisticated consumer segment. But he emphasized that prices would not be revised upward drastically.
The company could not specify when the transaction of Snow would close, but said it had "no plans for other merger and acquisition" at the moment. "Market consolidation will surely continue," said Hou. "We're open to such opportunities."
7 Jul. 2016