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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.

US. Drinks Americas receives Letter of Intent from Worldwide Beverage, expanding brands and production resources

Drinks Americas Holdings, Ltd., , a leading developer and marketer of beverage products, announced that it has entered into a letter of intent with Worldwide Beverage Imports, LLC. , which will result in Worldwide acquiring up to a 49% interest in the Company. Worldwide will acquire approximately 125,000,000 shares of common stock of the Company in exchange for sales and or importing and distribution rights of Worldwide products through a series of licensing agreements between the companies.

In addition to the shares of common stock for the distribution rights to each of the new products, Worldwide will make a capital contribution in the Company of no less than $1.5 million, through cash provided by the sale of Worldwide products by Drinks or otherwise. Upon the consummation of the transaction, Worldwide will have acquired an interest not to exceed 49% of the Company.

Federico Cabo, principal operator of Mexico’s third largest brewery, Cervecer?a Mexicana, S. de R.L. de C.V., and seventh largest tequila distillery, Fabrica de Tequilas Finos, S.A. de C.V., will join the board of directors of the Company. The members of the Company’s current board will also continue as members of the board of the Company. The Company’s current management team will enter into employment agreements with the Company for terms of up to five years but no less than three years.

In anticipation of the transaction, Worldwide has commenced the assignment of licensing and distribution rights of 39 SKUs of products owned or licensed by Worldwide. Worldwide will provide the production resources for each of the products and will extend 120 days credit on the products.

The final terms and conditions of the transaction are being negotiated and will be reflected in a definitive agreement. No assurances can be provided that a definitive agreement will be executed. Execution of a definitive agreement is subject to, among other things, the satisfactory completion by the Company of its due diligence, standard regulatory approvals and other conditions, and approval by both companies’ management and board of directors. The transaction is expected to close no sooner than June 30th and no later than July 15th, 2011.

Federico Cabo stated, ”The combination of the resources of both companies, our brands and our production resources should allow for the rapid growth of the Company. We are very excited about the transaction and the forward plan for the companies.”

J. Patrick Kenny, CEO of Drinks stated, ”It goes without saying that Federico Cabo’s history of success in the beverage industry is a tremendous addition to our Company. The products and the resources in the combined companies will provide a significant platform and will position our Company for growth and expansion. The key hurdle for Drinks has been access to production capital in today’s debt markets. This transaction provides Drinks with production and inventory resources for both our existing and newly added products and strengthens the Company exponentially.”

Worldwide currently markets products produced by Fabrica de Tequilas Finos, S.A. de C.V., the seventh largest independent tequila distillery in the world, including Kah Tequila, Agave 99 Tequila and Ed Hardy Tequila, and the beer products produced by Cervecer?a Mexicana, S. de R.L. de C.V., the third largest brewery in Mexico, including Mexicali Beer, Rio Bravo Beer, Chili Beer and Red Pig Ale. Drinks has recently launched Rheingold Beer and also markets Old Whiskey River Bourbon, Aguila Tequila, Damiana Mexican Liqueur and is an owner of Olifant Vodka. The combined brands are expected to be distributed and marketed in all 50 states with Drinks acting as either importer and distributor or primary sales agent for the combined brands.

In furtherance of the Company’s pursuit of the transaction, on May 17, 2011, the Company entered into a letter agreement (the “Agreement”) with a board member (the “Lender”). Pursuant to the Agreement, the Lender agreed to make or arrange a loan in the aggregate amount of $250,000 (the “Loan”) to the Company, with disbursements of $100,000 on May 20, 2011, $50,000 on June 15, 2011, and $100,000 on July 5, 2011. The Loan will mature on November 20, 2011 and will bear interest at 8% annually, payable monthly in arrears commencing on July 1, 2011. The Company intends to utilize these funds to accelerate its growing Rheingold business and the costs involved in the Drinks-Worldwide transaction.

16 Июн. 2011

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