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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.

New Alcohol Restrictions Are Small Beer For Many Russians

Russian President Dmitry Medvedev has signed into law new amendments that define beer as alcohol for the first time and place restrictions on its sale.

The changes mean that it will no longer be legal to sell beer between 11 p.m. and 8 a.m. It will only be allowed to be sold in stores, rather than in the ubiquitous kiosks that clutter the streets in Russian towns and crowd railway stations and transportation hubs.

Advertising for alcohol will also be banned under the new legislation.

The changes are part of a plan outlined by Medvedev in August 2009 to combat the "alcoholization" of the Russian people. In January 2010, Moscow increased the tax on beer by 200 percent.

Russians drank an average of 12.5 liters of alcohol last year; of that 12.5 liters, vodka accounts for about five liters, while beer accounts for four.

According to a 2009 study published in the British medical journal "The Lancet," alcohol abuse accounts for 600,000 deaths in Russia each year and a total of half of all deaths among males between 15 and 54.

Changes Greeted With Skepticism

Beer has been steadily growing in popularity since the collapse of the Soviet Union. The new law has been enough to bruise the share price of Danish brewer Carlsberg, which owns Baltika, Russia's largest beer producer, and gets about 45 percent of its profits from Russia.

But many are skeptical that the new regulations will bring significant change, at least in the short term. Vadim Drobiz is the director of the Moscow-based Center for the Study of the Federal and Regional Alcohol Markets. He is sanguine about the changes.

"[The consumer] won't lose anything at all," he says. "He won't reduce his level of consumption. He will buy his beer in advance. Night-time crime is falling and will continue to fall to some extent."

He notes that consumption of hard liquor did not drop appreciably when a ban on nighttime sales was introduced at the end of last year.

Drobiz says it would make more sense to regulate the sales of pharmaceutical alcohol more tightly, since many drugstores are open around the clock and about 90 percent of pharmaceutical alcohol sold is used for consumer consumption.

A man drinks canned beer on the Moskva River beach in Moscow.
Darya Gorshkalyova, a 24-year-old actress sunning herself recently in a Moscow square, shared Drobiz's skepticism.

“I don’t think this will solve the problem in Russia," she says. "It seems to me people will carry on drinking just as they used to. If they make this ban, then people will just buy their beer earlier - they’ll buy it in the afternoon and drink as normal. And that’s it. It’s the same with cigarettes in Europe. They’re really expensive but people still smoke.”

'More Pressing Issues' Than Beer

Drobiz emphasizes that the main change the new regulations will bring immediately is a reduction in crime.

"Society and the state will definitely get more order, more public order, particularly at night," he says. "There will be fewer young people wandering around looking for alcohol."

Nonetheless, considering Russia's love of drinking, this war on alcohol is a bold move on the part of Medvedev and the ruling United Russia party, given the legislative elections scheduled for the end of this year and the presidential poll coming in the spring of 2012.

Sergei Zaitsev, a 40-year-old Muscovite, says there are more pressing issues that need addressing such as his biggest worry -- his unemployment.

“I [want] well-paid work so that I can be sure of myself, so that I can provide for my family and provide for my wife, feed my children," he told RFE/RL while sitting on the grass at Pushkin Square, quaffing a beer in the sunshine.

"If [Medvedev] does that -- then let him make demands like this. First he has to give something, then he can demand. And what’s he given me? Nothing.”

25 Июл. 2011

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