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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. Beer production to decrease by only 5.1%, the USAIS «helped» to improve forecasts

According to Rosstat, in 2015 beer production in Russia decreased by 5.1% against 2014. However, in December 2015, beer production in Russia increased by 13% compared to the same period of 2014 and by 23.2% compared to November 2015.

Probably, the sharp increase in production at the end of the year is not due to the market factors, but the desire of brewers to overstock the warehouses of distributors and retailers in the run-up to joining of the wholesale and retail segment to the Unified State Automated Information System of registration of alcohol (USAIS).

The concerns of brewers were not groundless as constant failures and problems with the system settings occurred. In particular, on Friday, January 22, the USAIS hung and was not operating for a few hours, as several participants of the alcohol market out of the wholesalers for whom joining to the USAIS became obligatory since January 1, 2016, said to the newspaper "Vedomosti".

The disruptions of the accounting system began about 14.00 by Moscow time, as Herman Epstein, the Vice President for information technology of the Baltika brewing company (Russian subsidiary of Carlsberg Group) said to "Vedomosti". The system started responding to requests so slowly that we had to temporarily suspend the efforts of documents’ registration.

In cases where trucks had already left to the recipients, they also failed to register the acceptance. "There are queues of cars near all retail chains. And, if beer is in the freezing temperature for a few hours, it turns to Ice beer," jokes Epstein. The disruptions in the USAIS operation ended only by Friday evening, he said.

According to Epstein, the losses due to the disruptions will be calculated from the cost of spoiled beer, fines from the retail chains, transport downtime and the payment of overtime to employees. How much the downtime of the USAIS will cost Baltika has not been counted yet. "If the system hangs for an hour, then the net losses are about 10% of the cost of shipment, then this percentage increases significantly every hour," said the interlocutor to "Vedomosti".

27 Янв. 2016

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