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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.

Criticism of S.Korean beer

South Korean beer makers are furious over an Economist magazine article saying their beers are inferior in taste to those of North Korea. In its latest issue, the British magazine carried a story filed in Seoul saying South Korean beers have poor taste that is worse than that of the North`s Taedonggang Beer. The article blamed an insufficient volume of malt contained in raw materials and relative lack of competition due to an oligopoly enjoyed by Hite Beer and OB Brewery, adding that the South Korean beer market is an oligopoly due to high entry barriers imposed by authorities.
South Korean beer companies denied the allegations, with one saying, “Most (South) Korean beers contain more than 70 percent malt, and some including Hite Max of Hite and OB Golden Lager of OB contain 100 percent malt. Rice and corn are not cheaper than malt, and these grains are used in the mixture to generate a mild taste.” Hoegaarden, a premium Belgian beer that requires a highly sophisticated brewing technique, is produced through an original equipment manufacturing arrangement at a South Korean plant owned by OB Brewery. Other than Belgium, Hoegaarden is produced in South Korea and Russia only, which demonstrates how advanced South Korea’s beer production technology is. Hite and OB Brewery say differences in flavor between imported and Korean beers are due to consumer preference. Angry at the article, the two companies plan to complain about it via a letter to the editor of The Economist.

Beer has three main types: lager, ale and bitter. The South Korean market is dominated by lager, which is fermented at low temperatures and offers a mild and crisp taste. Europeans prefer ale, which is fermented at room temperature and has higher alcohol content and a bitter taste. Bitter is black beer, which is brewed by frying barley sprouts into a dark color. In the past, Korean breweries had introduced a number of beer types, including ale and bitter, but the market share of non-lager beers remained small. Korea also exports a large volume of beer, with its main market being Southeast Asia, where the weather is hot and humid. The U.S., which has a large ethnic Korean population, is another major importer of Korean beer.

Despite the angry reactions by the South Korean breweries, quite a few beer drinkers in South Korea complain about the taste of domestic beer. The Economist was also correct in that the oligopoly here is due to regulations that only grant a license to produce beer to a company with production capacity of 2.77 million liters or more. This standard was eased to 150,000 liters last year, and a wider variety of domestic beers have been introduced to South Korea. Yet they still have a small market share. The Economist report includes many pieces of misguided information, but the debate it incited will hopefully lead to richer-tasting beer made in South Korea.

29 Ноя. 2012

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