Dmitry Nekrasov’s Philosophy — on the Past, Present and Future of Ukrainian Brewing IndustryA meeting with Dmitry Nekrasov always turns into a training course: “Introduction to brewing business“. We are talking to a clever “playing trainer“ a person that can be called a godfather of the Ukrainian craft. He has a dozen of successful projects to his name. Dmitry told us about craft beer in Ukraine, on market cycles, on specifity of operating in retail and HoReCa, on union of Ukrainian brewers and certainly, how a brewery of his own, First Dnipro Brewery is doing.
The market of import beer in Russia: review and databasesThe market of import beer is rapidly growing and changing. But while in the past years it was growing due to brands variety, in 2019 major and affordable brands from TOP-10 were developing actively. It seems that the fact of a brand origin from far abroad counties, even if it is not well known but has moderate price and good distribution provides for million liters of sales in the territory of Russia. Among distributors AB InBev Efes was far behind, yet the role of Baltika and suppliers of the second row got more important. The boom of German brands was followed by stagnation of import from other traditional regions (and Belarus) instead the supplies from Mexico, Lithuania and Asian countries grew considerably.
Russia: Positions of Brewing CompaniesThe 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 brandsIn 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 2019During 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.
The trend of complication of Russian beer market is going on and in several directions at the same time. The range has got wider, the import and small segments are growing, namely craft beer, alcohol-free beer and special flavor beer. At the same time, all ex-mega brands and light lagers by Russian brewers are experiencing a decline of their shares. AB InBev Efes, Heineken, MBC and Pivzavod Trekhsosenskiy have exceeded the market, Carlsberg was developing slower than the market and Ochakovo as well as some other mid-sized breweries have been cutting down their volumes. To a big extent brewers’ performance was connected to their ability to reach agreement with networks, sacrifice their margin and enter new markets. Craft brewers are facing a serious danger of producers’ registration introduction – de facto licensing. ...
General Court annuls the €31.66 million fine imposed on Grolsch
On that market the brewers sell their beer to end users mainly through two distribution channels: the “on-trade” segment (hotels, restaurants and caf?s), where consumption is on the premises, and the “off-trade” segment (supermarkets and off-licences), where the beer is purchased for consumption at home.
The infringement found by the Commission consisted of the coordination of prices and price increases for beer and the allocation of customers, both in the on-trade segment and in the off- trade segment in the Netherlands, and the occasional coordination of other commercial conditions offered to individual on-trade customers in the Netherlands.
The Commission imposed a fine of €31.66 million on Koninklijke Grolsch NV.
That company subsequently brought an action before the General Court seeking annulment of the Commission’s decision or a reduction in its fine.
Koninklijke Grolsch NV in essence denied that it participated directly in the infringement. It argued that the employees of its wholly-owned subsidiary, Grolsche Bierbrouwerij Nederland BV, attended most of the meetings at issue and that consequently the Commission should not have found that Koninklijke Grolsch NV participated in the infringement but, if appropriate, should instead have attributed liability to it for an infringement committed by its subsidiary.
First of all, the Court considers certain documents concerning the meetings between the companies and concludes that the evidence available to the Commission was not sufficient to establish the direct participation of Koninklijke Grolsch in the cartel.
The Court goes on to observe that where, as in the present case, a decision concerns a number of addressees and raises a problem of attribution of liability for the infringement identified, it must include an adequate statement of reasons with respect to each of the addressees, in particular those of them who, according to the decision, must bear the liability for that infringement. Thus, in the case of a parent company held liable for the conduct of its subsidiary, such a decision must contain a detailed statement of reasons for attributing the infringement to that company.
According to settled case-law, in the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement of the competition rules, there is a rebuttable presumption that that parent company actually exercises decisive influence over the conduct of its subsidiary.
In those circumstances, it is sufficient for the Commission to show that the entire capital of a subsidiary is held by the parent company in order to presume that the parent company exercises decisive influence over the subsidiary’s commercial policy. The Commission will then be able to hold the parent company jointly and severally liable for payment of the fine imposed on the subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to prove that its subsidiary acts autonomously on the market.
The Court states that, in the present case, the decision treated the parent company, Koninklijke Grolsch NV, and the Grolsch group as one and made no mention of the economic, organisational and legal links between the parent company and its subsidiary, whilst nowhere in the statement of reasons was the subsidiary’s name mentioned. The Commission therefore failed to explain the reasons which led it to determine the legal person responsible for running the undertaking at the time when the infringement was committed, so as to enable that person to answer for the infringement or, as the case may be, rebut the presumption that the parent company actually exercised decisive influence over the conduct of its subsidiary.
The Court finds that the Commission failed to explain, in the decision, its reasons for attributing to Koninklijke Grolsch NV the conduct of its subsidiary, which followed from the participation of the subsidiary’s employees in the meetings at issue. It thus denied the parent company any opportunity to reverse the presumption and thereby challenge the merits of that attribution before the Court and did not enable the Court to exercise its power of review in that regard.
Consequently, the Court decides to annul the Commission’s decision in so far as it concerns Koninklijke Grolsch NV.
20 Сен. 2011