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.
Vietnam to sell stake in prized beer companies Sabeco and Habeco
The government will sell its entire 89.59 per cent stake in Saigon Beer Alcohol Beverage Corp. for US$1.8 billion and its 82 per cent holding in Hanoi Beer Alcohol Beverage Corp. for $404 million, according to a post on a government news website Wednesday. Saigon Beer, known as Sabeco, will be sold in two tranches in 2016 and 2017, while Hanoi Beer, or Habeco, will be divested this year, it said.
“This is the first time the government is very clear cut in saying goodbye to major companies completely, without any stakes left,” said Dinh The Hien, a Ho Chi Minh-based economist. “The government’s clear-cut determination matches its long-planned strategy to speed up state stake sales. But it also indicates how stressed the state budget is right now.”
Vietnam, which needs billions of dollars in infrastructure investments for highways to airports, has seen state revenue drop this year with plunging oil prices and a drought that has hurt agriculture production. The budget deficit for 2016 may exceed the planned ratio of 4.95 per cent of gross domestic product, according to National Financial Supervisory Commission.
Vietnam’s plan to slash holdings in companies dates back to the 1990s as a way to spur economic growth. The government’s privatisation plan fell short of its target in 2015, with 289 state-owned companies selling stakes compared with a goal of 514.
The process is “slow and behind schedule” due partly to executives’ concerns about their positions at these companies after the sales, Deputy Finance Minister Tran Van Hieu told Bloomberg last year.
The government plans to sell its Sabeco and Habeco stakes in auctions, according to the government post. Vietnam will offer a 53.59 per cent stake in Sabeco this year before its listing, and the remainder in 2017, according the government posting. Prime Minister Nguyen Xuan Phuc said August 29 that the listings of Sabeco and Habeco must be done prior to their state stake sales.
Vietnam’s beer-swilling culture has made Sabeco and Habeco among the government’s most-treasured assets.
Beer consumption in the Southeast Asian country jumped about 40 per cent in 2015 from 2010, according to the Vietnam Beer Alcohol Beverage Association. Vietnamese are expected to consume more than 4.04 billion litres of beer this year, the most in the region and up from 3.88 billion litres in 2015, according to Euromonitor International. Its citizens of legal drinking age, 18 and above, is expected to increase to 72.4 million by 2021 from 68.7 million this year, according to Euromonitor.
The country’s thirst for beer has attracted interest from foreign companies. Thai Beverage PCL, Asahi Group Holdings Ltd. and Heineken NV are among companies interested in Sabeco, according to Euromonitor analyst Andrea Lianto.
Heineken, which in July acquired a brewery in the port city of Vung Tau from Carlsberg A/S, has a 20 per cent market share, similar to that of Habeco’s, according to Nguyen Van Viet, chairman of the Vietnam beer association. Sabeco, brewer of Saigon Beer and 333 Beer, was Vietnam’s largest beer company with 40 per cent of the market share.
The decision to hold auctions is an effort by the government to be more transparent, said Tony Foster, a Vietnam managing partner for law firm Freshfields Bruckhaus Deringer LLP in Hanoi. It could also line up future sales including that of Vietnam Dairy Products JSC, Foster said. The company known as Vinamilk is one that foreign investors are most interested in, he said.
“If you can get these done on this basis, it sets the stage for the same thing for Vinamilk and then others,” he said.
2 Sep. 2016