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.
Will Vietnam decide to use “golden share” to protect company brands?
The Vietnam Financial Investors’ Association (VAFI) estimates that the State would get $2 billion from the sale of two brewers – Sabeco and Habeco – alone.
However, some analysts believe that the value of the two enterprises, the leaders in the industry, must be much higher.
As for the other 10 enterprises, in which the State Capital Investment Corporation (SCIC) acts as the representative of the State, the value could be billions of dollars.
Vinamilk, in a document to state management agencies in late 2015, pointed out that if the State sells its stakes in the dairy producer at VND120,000 per share, it would earn VND64.9 trillion. If the price is at VND150,000 per share, it would earn VND81.15 trillion. This means that the State can expect the amount of $2.9-3.6 billion if sells all the Vinamilk’s stakes it has.
Meanwhile, some foreign investment funds believe the value of the dairy producer could be $4 billion.
Dang Quyet Tien, deputy head of the Ministry of Finance’s Enterprise Finance Department, affirmed that enterprises will have to list their shares on the bourse before the state’s shares are sold.
“It is necessary to list Sabeco’s and Habeco’s shares to find out their real value,” Tien said. “And when selling stakes, it is necessary to hire consultants to revalue.”
He explained that the share price on the bourse will be just for reference, and that the prices at equitization must not be considered as the official value. Only by doing so will the state be able to sell stakes at the best prices.
‘Golden share’ will protect Vietnamese brands
Experts have warned that the beat Vietnamese brands would disappear from the market if most profitable enterprises are sold to foreign investors.
Meanwhile, foreign investors, with their powerful financial capability, are the most potential buyers.
Tien from MOF said MOF is aware of the risk and is considering applying necessary measures to prevent this. One of the measures is the ‘golden share’.
Instead of holding the controlling stakes which allow the State to veto other shareholders’ decisions, the State can hold a ‘golden share’.
A golden share is a nominal share which is able to outvote all other shares. This means that any decision on changing brands must get approval from the golden share holder.
Golden share is held by a certain governmental organization. The issue is mentioned in the 2014 Enterprise Law.
Tien said ‘golden share’ is a method applied in many countries to companies which undergo equitization and transformation into stock companies.
5 Oct. 2016