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.
Thai Beverage bids for a stake in Vietnam’s largest brewers
With Vietnam’s government proposing to sell off Saigon Beer, Alcohol, Beverage Corporation (Sabeco) and Hanoi Alcohol Beer & Beverages Corp (Habeco) for an estimated total of US$2.2b (S$2.9b), various media outlets have revealed that Thai Beverage (Thai Bev) is one of several bidders.
According to data from Euromonitor International, Sabeco has been the leader for beer in Vietnam with a 46% market share in volume terms in 2015, underpinned by brands that include Saigon Export and 333.
Commenting on the issue, OCBC Investment Research cited two reasons why the acquisition is positive for ThaiBev, if successful. Nevertheless, it prefered to wait on the development and keep their assumptions unchanged for now.
Firstly, OCBC noted that Sabeco is set to be divested in two tranches.
Sabeco had recently filed documents to seek approval from the Ministry of Industry and Trade to join the Vietnam Stock Index (VN-Index) as the government would want the market to determine the price and valuation of Sabeco. Following its listing, the divestment of Sabeco will be done in two tranches, whereby the government will auction 53.59% in the company this year and the remaining 36% in 2017. Articles also suggest the government is looking for the highest bidder.
Secondly, OCBC said that Vietnam’s beer volume is expected to grow at a CAGR of 6% over 2015-2020F based on Euromonitor forecasts.
Against this backdrop, the research firm said that there are a few notable foreign brewers that have presence in Vietnam. For instance, Anheuser-Busch InBev NV has a brewery in Vietnam, while Carlsberg has a 17% stake in Habeco, which holds a smaller market share of ~18% with its Bia Ha Noi brand.
Thai Bev’s peer Boon Rawd Brewery (maker of Singha beer) had also agreed to invest in Masan so as to tap on its distribution network in Vietnam.
29 Sep. 2016