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3-2019

Russia: Positions of Brewing Companies

The review contains an analysis of interim performance of brewers in the first half of 2019. There are rather dynamic changes behind a modest industry growth. Baltika is again experiencing a stage of volumes and market share slid due to competition with AB InBev Efes. Because of the price competition and presence expansion in the modern trade company #2. has come close to the leading position. At the same time sales of Heineken Russia have continued growing which makes the premium part of the portfolio heavier. The market premiumization trend had been also confirmed by import brands. MBC and Zavod Trekhsosenskiy have been the most successful among federal market players. The market share of independent regional brewers and Ochakovo have continued falling as they are being squeezed out by the market leaders at their competitive fields.

Ukrainian beer market 2019: companies and brands

In 2019 beer production and market have been still fluctuating about zero point. However, the past season was successful for brewers judging by the sales profitability. The price mix has improved due to rapid general market premiumization, as well as its particular aspect, the growth of import beer sales. By the season end AB InBev Efes improved its positions considerably. It turned out that consumers had not forgot Efes brands that had to leave the market, but started to recover rapidly. Against the stagnating market that meant sales decline of other companies, in the first place Carlsberg Group that most of all beneficiated from Efes exiting the market. PPB turned out to be stable to branding activity of its competitor and Obolon kept the same volumes and at the moment it is the absolute leader of the economy segment. The share growth of independent producers took place thanks to leading craft breweries, that so far do not have a big market weight, but they are rapidly gaining it.

Brewing industry in Kazakhstan 2019

During the first half of 2019, the majority of Kazakh brewers made their contribution into positive dynamics. Yet it was companies of the lower division, not the two transnational leaders that raised their production and sales. The shares of draft beer and aluminum can which is rapidly squeezing glass bottle out of the market, have been growing. The price segmentation has remained stable despite the substantial rise of retail prices and fluctuations of brand market shares, while the borders between segments have become blurred. The main events in the industry have been: the announced revision of the beer excise policy, launch of BeerKhan brand in the strong beer segment, and most important – purchasing assets of Shymkentbeer by Arasan.

Molson Reaching For Foster’s

There has been a rumor that Molson Coors Brewing Co. (NYSE:TAP) is eyeing Australia’s largest brewer Foster’s Group Ltd. Molson Coors is to join with Mexico’s Grupo Modelo for coming out with the joint bid offer to takeover Foster.

Bank of America Corp and Deutsche Bank are reported to be the main banks helping Molson; Molson and Modelo are working out an ideal financial offer to take Foster’s into its ambit. However, the details of the joint bid were not disclosed.

Many potential buyers have been planning to acquire Foster’s since it announced plans last year to spin-off its struggling wine operations, which was seen as a deterrent for its growth.

Companies like Japan’s Asahi, Coca-Cola Amatil and SABMiller were the potential buyers, and analysts assume the strong Australian dollar as a possible factor that weakened the allure for Foster’s. However, in February this year, Japan’s Asahi Breweries stated that it had no interest in buying any part of Foster’s.

However, a successful takeover of Forster’s would be one of the biggest deals in the beverage sector.

Foster’s is one of the top brewers in Australia with renowned brands like VB and Cascade and has a 50% market share of Australia. Therefore, the deal if successful will not only be a strategic fit to the companies in terms of portfolio addition but will also give them the exposure to the high potential Australian market.

However, analysts feel that the Molson and Modelo team up is not very promising for the takeover as the partnership would cost Molson highly since the Mexican brewer is half-owned by Anheuser Busch InBev (NYSE:BUD), the world’s largest brewer.

Analysts apprehend that Anheuser-Busch InBev may block any such deal that enhances the value of Modelo and make the outright ownership of Modelo difficult for the former in the near future.

Analysts are of the opinion that SABMiller, Molson Coors’ majority partner in the Miller Coors joint venture in the U.S, is more likely to be a part of the team in swallowing the Foster’s Group.

Recommendation

We remain encouraged by the restructuring initiatives taken by Molson to reduce overhead costs and boost profitability. The initiatives include closure of underperforming breweries and efforts to attain efficiency in finance, administration and human resource activities. However, seasonal nature of the business of Molson Coors and increased competition from Anheuser-Busch InBevare concerns.

7 Июн. 2011

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