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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.

Russia. New Beer Law Draws Cautious Support, With Notes of Pessimism

Viktor, a 56-year-old security guard from Usinsk, in Russia’s Arctic north, said he was not particularly persuaded by a new law declaring beer an alcoholic beverage rather than a food product, and in that way restricting its sale at train stations and the ubiquitous sidewalk kiosks that are still a mainstay of retail business throughout the country.
“It’s not a spirit,” he declared matter-of-factly, standing in the Leningradsky railroad station in Moscow. “It’s a drink that quenches the thirst.”

“With spirits, fine, I agree, put some sanctions on it,” Viktor continued. “There’s beer that they make, which isn’t really beer at all, it’s actually a spirit. But normal beer, good beer, it should not be banned. It’s not right.”

Few subjects prompt keener interest or deeper philosophical rumination in Russia than alcohol, and those that do are invariably discussed over drinks. In Russia, which has one of the world’s highest rates of alcoholism and alcohol-related illness, vodka remains the top choice. But beer is not far behind. The average Russian drinks more than four gallons of alcohol a year.

The new law, which took effect on Jan. 1, aims to reduce those numbers. It bans beer sales from kiosks entirely, and in other stores between 11 p.m. and 8 a.m. And as with increased taxes on alcohol in recent years, it aims to curb public drinking, particularly the casual drinking in city parks and snow-covered promenades that can begin before breakfast and end after midnight.

Though technically illegal, drinking in such public spaces is usually tolerated.

As with other weighty subjects that generate fierce debate here — the quality of Moscow theaters; the level of national security; the relative greatness of writers and poets — there are conflicting views on the new law. Even some people whose businesses will suffer said they supported the government’s goals.

“It’s better; maybe people will drink less,” said Natalya Novikova, who works at a kiosk on Tsvetnoy Bulvar in central Moscow, located on a plaza near a subway station. “People in the square relaxed, drank beer, round the clock.”

She added, “After work, they grabbed a beer, and now, well, the government needs people not to drink.”

Industry statistics show that the kiosks, which line streets and typically cluster around subway stations, account for about 30 percent of beer sales. At the kiosk on Tsvetnoy Bulvar, Ms. Novikova said beer was the single most popular item, accounting for nearly $700 in sales a day.

The law is also expected to put at least a small dent in sales for beer manufacturers. Ben Morton, a spokesman for Carlsberg, which is the largest beer-maker in Russia and controls about 40 percent of the market, including the brand Baltika, said that similar restrictions existed in other countries and that the company was well prepared.

“We anticipate some potential short-term disruption,” Mr. Morton said, “but no significant long-term implications.”

Some kiosk owners and managers said it would be difficult to stay in business without beer sales; others said that they would survive but that if similar restrictions were put in place on cigarettes, it would effectively spell the end of such kiosks.

“For business it’s bad, and there are large layoffs for staff,” said Gigla Mebonia, the manager of the Tsvetnoy Bulvar kiosk. “For places like this it is bad, but on the other hand the law is justified for the people to drink less.”

Vitally Kordyukov, 37, who works as a private-car driver and was walking by, said he agreed with the restrictions, even if the effect might be limited. “It’s not very appropriate to drink beer on a bench,” Mr. Kordyukov said. “Of course, people will continue to drink.”

But at the Leningradsky station, where passengers are accustomed to buying a few beers before boarding an overnight train, Yulia Semyonova, 24, and her boyfriend, Kirill Vasko, 26, said the new restrictions were pointless and inconvenient. While kiosks are barred from selling beer, cafes continue to do so, but at higher prices and farther from the train platforms.

“People won’t drink less,” said Ms. Semyonova, who works in sales for an engineering company in St. Petersburg. “People will just buy stronger alcohol in advance and buy more.” A beer that cost just over $1 at a kiosk would cost $2 in a cafe, or more if purchased on board the train. “It’s almost twice as expensive,” she said.

Mr. Vasko, who works in logistics, said: “A sinner must have his vice; one shouldn’t get in the middle of it. Like prostitution or anything else, each person has his own. Whoever wants to drink will drink. If someone goes to brothels, then he’ll go to brothels. It’s impossible to stop.”

Viktor, the security guard from the north, who like many Russians declined to give his last name out of a nonspecific fear of the authorities, said that the new law was meddling with a society that could trace its love of beer back more than 1,000 years.

“Even before Moscow, there was Kievan Rus, and there was beer even then!” he said, referring to the eastern Slavic state that existed from the 800s to 1200s.

As he began this historical exposition, Viktor put down a rather large bottle of beer and spoke carefully with just a slight trace of an intoxicated slur.

“They drank beer then as the noble people’s drink. Moscow did not exist yet, only Kievan Rus with its cities, if you know the history, and back then the beer was normal.” He added, “And I drink a noble drink, a beer from Kiev called Obolon — the most normal beer.”

Viktor said that the government’s other big mistake was allowing the privatization of the beer and spirits business after the breakup of the Soviet Union.

“Even in the czars’ times, it was the most profitable business for the state,” he said. “Having alcohol production under state control would bring a lot of money to state budgets. But now it’s in private hands, and they are paying back kopecks to the state while making millions in profits — a ruble for the state and 10 for themselves. Everybody knows it, but keeps silent.”

8 Янв. 2013

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