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....
Vietnam. Will national brewers survive new taxes?
Decree 108/2015 / ND-CP and Circular 195/2015 / TT-BTC will adversely affect beer producers by changing the tax basis for how the special consumption tax (SCT) is collected. In accordance to the new rules, the tax is levied not on the cost price of the parent company but on that of subsidiaries.
The tax basis change is aimed to regulate the activity and increase transparency of big companies, such as Sabeco, Habeco, and VBL, who by means of many subsidiaries and distributors reduced the final sum of the excise.
The growth of the tax burden can significantly aggravate already difficult financial situation of the brewers. For instance, Sabeco pretax profit over the first 4 months of this year fell by 27% to 1,215 bln dong. Sabeco’s management at the annual meeting arrived at the decision that the company’s profit decline is mainly connected to the increase of the special consumption tax from 1 January 2016.
Despite the fact that the revenues and sales volume went up, the excise rise from 50 to 55% was the main reason for the company’s profit plummeting.
The tax increase resulted in the retail price growth and, in the long run, led to sales decline particularly concerning the local producers , as their production is targeted at more economizing consumers.
For the same reason, the expected profit in 2016 is to decline by 5%, amounting to 3,436 bln dong.
12 Jul. 2016