10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
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.
India. Cross-border transfers of intangible assets by foreign entities not taxable: Delhi HC
The Delhi High Court recently passed a long-awaited judgment against attempts by Indian revenue authorities to tax capital gains on cross-border transfers of intangible assets by foreign entities.
As a result of this latest clarification, only capital gains made by foreign entities on cross-border share transactions would henceforth be taxable by Indian authorities under Section 9 of the Income Tax Act.
The landmark verdict was delivered on a challenge made by Foster’s Australia to a May 2008 Authority of Advance Rulings (AAR) determination which deemed the transfer of intangible assets associated with British beer manufacturer SABMiller’s acquisition of Foster’s India over 10 years ago as taxable under Indian law.
The Indian tax authorities had supported the AAR decision on the ground that the transfer of the Foster’s brand name for use in India was taxable as it had acquired domestic licences and gained substantial value through business conducted in this country.
In contrast, Foster’s Australia relied on a strict interpretation of Section 9 of the Income Tax Act, 1961, and contended that the income arising out of a transfer of a brand name could not be taxed in India if the intellectual property rights were held by a foreign entity.
The high court eventually agreed with the Foster’s Australia submissions and contended that the permission given to SABMiller to utilise the brand name was, in fact, a mere “user right” transferred by an overseas body and not amenable to taxation in India under Section 9.
While interpreting the relevant retrospective provision, the court held that the law had created a deeming provision for taxability of capital gains made on indirect transfers of capital assets alone and would not apply to intangible assets such as brand names or logos.
In the absence of a specific provision on the issue, the court concluded that international merger and acquisition norms permitting taxation only at the proprietary location of an asset were to be followed. As such, only the parent country of the transferor would have a right to such taxation, regardless of the usage of the asset in question.
According to Ketan Dalal, senior tax partner, PricewaterhouseCoopers, the judgment was a well-reasoned one. “The fact that a brand has generated goodwill in India or was nurtured here are irrelevant for the purposes of taxation,” said Dalal. “Given the increasing importance of intangible assets and transactions of such nature, international companies will certainly get comfort that one potential hurdle in relation to such transactions seems to have been addressed. Now one only hopes that the tax department will accept this judgment and not take the matter to the Supreme Court.”
- Capital gains made by foreign entities on cross-border share transactions would be taxable
- The landmark verdict was delivered on a challenge made by Foster’s Australia to a May 2008 Authority of Advance Rulings
- The court concluded the international merger and acquisition norms permitting taxation only at the proprietary location of an asset were to be followed
- Only the parent country of the transferor would have a right to such taxation, regardless of the usage of the asset in question
28 Jul. 2016