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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.

Malaysia. Quick revenue boost from lifting of Labuan tax-free status

THE lifting of Labuan’s tax-free haven status starting with alcoholic beverages, should it happen, is a quick way to boost Government coffers, although the overall impact may not be too significant.

By rough estimates, Yeah Kim Leng, economist and dean at the school of business at Malaysia University of Science and Technology says the Government could potentially reap “a couple of hundred million ringgit” a year by taxing alcohol sold in Labuan.

“In the bigger picture, the impact is not that great but it will help in enhancing overall revenue,” he says.

Additionally, the move to tax Labuan alcohol will also help plug leakages and minimise contraband issues, he points out.

“What is more important, however, is that the Government must strike a balance between revenue enhancement and reining in its spending,” Yeah tells StarBizWeek.

According to industry sources, the amount of alcohol that is shipped into Labuan, located off the coast of Sabah, is more than what is sold in the entire Southern and Central Peninsular Malaysia.

This has led to many instances where smuggled alcohol as well as cigarettes from Labuan had found their way into Peninsular Malaysia.

Based on government data provided, the 2015 estimated figures for excise duty (before taking into account tax changes) imposed are RM122.2mil (for manufactured liquor), RM1.2bil (for beer from malt) and RM1.1mil (for wine).

These compare to the total estimated revenue gained from all excise duties for 2015, which stands at some RM9.4bil.

In terms of sales tax that the Government is estimated to have gained last year, it is RM4.03mil (for liquors) and RM20.6mil (for beer from malt).

Meanwhile, Nomura South-East Asia economist Euben Paracuellesm concurs with Yeah in saying that measures to increase government revenue must be accompanied by steps that “improve tax administration efficiency”.

“There’s little room for raising taxes at this point.

“Measures (such as lifting Labuan’s tax-free status for alcohol) will help raise revenue marginally but these should also be accompanied by steps that improve tax administration efficiency,” he stresses.

Paracuellesm believes that although Malaysia’s growth is slowing, it remains resilient and hence does not need rate cuts to boost growth.

“We see Bank Negara holding the policy rate steady this year.”

The Government had assumed crude price to be at US$48 per barrel when it mapped out the Budget 2016.

Sharp drop

Oil prices have since dropped to below US$30 per barrel and could dip further, hurting government revenue which is derived substantially from oil.

The Government will announce the revised budget, which will incorporate measures to boost revenue next week and hopefully also address its issue of a ballooning operating expenditure and persistent budget deficit.

Labuan alongside Langkawi and Tioman are currently designated as tax-free zones.

Back in 2011, it was reported that Finance Ministry officials had brought up to the Cabinet the issue of widespread smuggling of cigarettes and liqour that had caused the Gov­ernment to suffer massive losses.

This in turn had prompted the Finance Ministry to examine the viability of Labuan’s duty-free status. However, no action was taken.

Away from these tax-free zones, beer and stout sold in Malaysia continue to have the highest excise tax rates, according to information on the Confederation of Malaysia Brewers Bhd website.

The confederation which is made up of the two key industry players who contribute over 90% of the total beer and stout volume in the market, namely Carlsberg Brewery Malaysia Bhd and Guinness Anchor Bhd, notes that following three consecutive tariff hikes (2004 to 2006), Malaysia has the second highest duty on beer in the world after Norway.

The excise duty for beer is RM7.40 per litre with an additional 15% ad varolem tax.

26 Янв. 2016

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