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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.

Why Asahi Isn’t Buying Foster’s

With SABMiller PLC taking the gloves off in a $10 billion hostile offer to buy Australia’s Foster’s Group Ltd., it’s tempting to imagine what might have been for Japan’s Asahi Group Holdings Ltd.

On Thursday, Asahi sealed its own biggest-ever deal to buy New Zealand’s Independent Liquor –- for little more than 1/10 of that price.

Back in the 1990s, Asahi had a stake of nearly 20% in Foster’s. With a stake that size, the Japanese company could have been kingmaker in the battle for the latest object of the global brewing business’s desire. Or even launched its own offer.

But frustrated by Foster’s inability to make its targets, not to mention a lack of dividend payments, Asahi sold out of the Australian company in 1997. And in an indirect way, it’s the hangover from that Foster’s deal, first struck in 1990, that shaped Asahi’s future: The company must keep growing overseas to compensate for Japan’s sluggish domestic market — just don’t expect it to risk any mega-deals.

Asahi’s success story with the advent of mega-hit “Super Dry” in 1987 is well-known in Japan, as are ads of international go-getters and corporate achievers downing the brew. But that came after a sales slump in the mid-1980s, when its market share fell to less than 10% at one point. It’s been a long and expensive haul for Asahi to get back into a position where it can challenge local arch-rival Kirin Holdings Inc. for the No. 1 beer-sales spot in Japan’s cut-throat market, with Suntory Holdings Inc. also breathing down its neck.

While Asahi saw the need for investment in overseas operations like Foster’s early enough, with its finances strained by the need to ramp up at home, it couldn’t afford to wait for the returns to start rolling in overseas. Ditto unsuccessful 1990s efforts to profits on China’s red-hot economy.

More than a decade later, Asahi’s position in Japan, and its financial health, is much fortified. But that focus has left it trailing rivals in international sales, something it must address as Japan’s population ages and shrinks. Back to the overseas acquisitions trail, then, but with a difference from giants like SABMiller: It’s not that Asahi doesn’t have money to burn -– it has war chest of $10 billion available for M&A in the period up to fiscal year 2015 -– it’s just that it’s not about to splurge the lot on one big-ticket deal.

Since 2009, Asahi has quietly spent about $2.5 billion buying companies, and Independent Liquor takes its spending so far this year to more than $1.8 billion. These smaller, bolt-on acquisitions are designed to catapult it into the top 10 in the global food and beverages sector by 2015. It is now ranked 13th.

Whether the low-key approach will pay off in the end remains to be seen. Asahi still has a long way to go to bring its overseas sales to 20%-30% of its targeted sales of $26 billion-$32 billion by 2015: In 2010, Asahi’s overseas sales made up a mere 6.6% of overall sales, while Kirin’s overseas sales ratio was 23%.

But Asahi needs to accelerate wherever it can. As the pace of consolidation in the industry heats up, it won’t have escaped the attention of some that at about $10 billion, Asahi’s current market value is about equal to the latest SABMiller offer for Foster’s.

19 Авг. 2011

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