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.
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