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. ...
Sri Lanka tax policy that promotes hard alcohol use is ‘shocking’: beer maker
The firm said in October tax on mild beer (lower alcohol content) was raised by 27 percent and strong beer by 32 percent. In November taxes on strong beer was raised by another 29 percent.
Though a reduction in tax on mild beer was announced in November it was quickly reversed again taking the total tax increase up to 70 percent.
While excise tax on strong beer was raised 70 percent, tax on arrack, Sri Lanka's most popular hard alcohol was up only 24 percent.
Tax policy that encourages hard liquor is "unusual and defies rationality" Lion Brewery told shareholders.
"…Sri Lanka is in a unique position; in this country, the tax per millilitre of alcohol is inversely proportionate to the alcohol content in the beverage," Lion Brewery
"In this modern day and age this is a shocking policy anomaly".
Lion Beer said its sales fell after the double tax hikes. It said the gap had been picked up by hard alcohol.
Industry analysts estimate legal hard alcohol sales have increased over 10 percent last year. Hard alcohol sales were also helped by a crackdown on tax unpaid bottles produced by some distilleries connected to members of the ousted Rajapaksa regime.
At one time Sri Lanka had high taxes on beer, which the beer firms said contributed to the abuse of alcohol and moonshine in Sri Lanka. Beer was not popularly consumed by low income earners.
After taxes were rationalised there was an increase in beer consumption. Even construction workers who used to slug a quarter bottle of arrack moved to cans of strong beer.
Anecdotal evidence seem to suggest a reversal of the trend though no data from a scientific study is available.
But Lion Brewery (Ceylon) Plc said revenues fell 4 percent to 8.2 billion rupees in the December 2015 quarter, from a year earlier. After tax profits fell 17 percent to 461 million rupees.
Tax collections on beer which was 2.2 billion rupees in September had fallen to 1.8 billion by December, the firm said.
When taxes are raised on good with elastic demand total tax revenues will fall.
If demand is relatively inelastic and tax hike will reduce the quantity demanded, but not total revenue.
Cigarettes which is strongly addictive and has no close substitutes except 'beedi' a cottage industry product, has a relatively inelastic demand.
Sharply falling sales as well as taxes seem to suggest the ready availability of close substitutes or reduced levels of addiction, or both economic analysts say.
Lion Brewery says in addition to hard alcohol, the toddy industry, a fermented domestic drink, supposedly made from coconut sap, also benefited from higher demand.
Toddy is taxed at 30 rupees a litre compared to strong beer at 315 litre.
"Available information suggests that this so called toddy is made mostly of a
chemical cocktail," the firm said.
"To compound matters, most toddy industry players have a less than perfect reputation for meeting their tax obligations."
18 Фев. 2016