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. Liquor companies lost $4 billion last year due to prohibition and GST exclusion
Nearly a dozen listed liquor companies in India have lost almost $4 billion, or a third of their market capitalisation, over the past year as their shares fell following a consistent decline in sales growth, prohibition in few states and exclusion of the segment from the GST ambit.
The combined market value of three largest companies — United Spirits, United Breweries and Radico Khaitan — crashed 30 per cent to Rs 55,392 crore from a year ago.
During the same period, the benchmark index Sensex fell marginally by 0.6 per cent.
"Prices of liquor brands went up by over 20 per cent due to taxes since more than two years. Then there are many states that banned alcohol which is impacting the estimated growth of the industry," said Aditya Joshi, consumer analyst with Nirmal Bang.
Since last year, Kerala, Bihar &Tamil Nadu that account for 20 per cent of India's alcohol consumption, banned liquor either completely or in a phased manner.
India is the second-largest spirits-consuming country behind China. However, India's overall liquor consumption at 314 million cases grew less than a percent in 2015, compared with about 2 per cent a year ago, and more than 10 per cent between 2004 and 2014.
"We do not expect the regulatory environment to materially improve in the next two to three years and this will impede any broad improvement in operating profit margins for alcoholic beverage companies," said a report by Moody's.
While the long-term potential of India's alcoholic beverage market is backed by strong growth prospects in the economy, rising disposable incomes and an increasing social acceptance of alcohol, profitability has been a problem. Taxes on alcohol, on an average, account for about 16 per cent of the overall tax revenues of state governments. In India, states levy taxes on alcohol, while the Centre levies duties on imports.
States control manufacturing, distribution and pricing of liquor. Moreover, the liquor segment has been kept out of GST, a big concern in terms of margins, said analysts.
The industry, however, is still hopeful.
"Post GST, alcohol will be the biggest direct source of revenue to a state compared to second largest now. States have been very possessive about this stream of revenue which is best reflected in the fact that they made sure alcohol was not included in GST," said Amrit Kiran Singh, chairman at International Spirits & Wines Association of India that recently met Empowered Committee's chairman to discuss the matter.
12 Aug. 2016