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. ...
APB Commences Legal Proceedings Regarding Proposed Sale of Heineken-APB (China)
• China business remains on track with international premium strategy driving organic growth
Asia Pacific Breweries Ltd (APB) announced today, that the proposed sale of its 50% owned Heineken-APB (China) Pte Ltd (HAPBC) to China Resources Snow Breweries Limited (CRSB) could not be completed as it was unable to reach an agreement after its latest round of discussions with CRSB. The proposed divestment comprised HAPBC’s 49% interest in Jiangsu Dafuhao Breweries Co, Ltd (DFH) and 100% of Shanghai Asia Pacific Brewery Company Limited (SAPB).
Mr Roland Pirmez, Chief Executive Officer, APB commented, “While we are disappointed that the sale to CRSB fell through, this has by no means affected our operations within China. We remain on track with our International Premium Brand Strategy as our higher margin Tiger and Heineken brands record growing volumes in China.”
The divestment of DFH and SAPB is in line with APB’s restructuring efforts in China as it focuses on its International Premium Brand Strategy. Despite receiving unconditional approval by the PRC authorities, CRSB decided to terminate the agreement on the basis that it would not be completed given the summons raised by DFH. HAPBC is contesting the summons served by DFH (as being groundless and without merit), including challenging the jurisdiction of the Nantong Intermediate People’s Court over the matters raised in the summons.
In light of the termination of the sale, APB expects a negative impact of approximately S$8.5 million due to transaction costs and operational losses from sale assets from October 2011 to March 2012.
Separately, HAPBC has initiated arbitration against Nantong Fuhao Alcohol Industry Co., Ltd (NAC) at the China International Economic and Trade Arbitration Commission in Beijing and is claiming against NAC for various breaches of the JVA, including but not limited to:
- Refusal to provide HAPBC with financial information of DFH;
- Refusal to cooperate with HAPBC for HAPBC to conduct an audit on DFH pursuant to the JVA;
- Acting in furtherance of NAC’s interest to the detriment of DFH in relation to the relocation of DFH’s main factory in Tongzhou; and
- Acting unilaterally without HAPBC’s approval in relation to material DFH matters.
In light of the above, APB is unable to determine either the financial position or valuation of DFH and considers it prudent to make a provision for the impairment of APB’s 50% share of the total book value of DFH. This amounts up to approximately S$30.0 million.
“This provision for the impairment of DFH removes the last piece of uncertainty in our China minority shareholdings; thereby freeing us to solely concentrate on our next level of growth in China via our International Premium Brand Strategy,” he continued.
3 Апр. 2012