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. ...
The global outlooks of the legal market of cannabis are excellent. It is possible to simultaneously imagine dry law repeal and craft brewing boom but not in one but in several consumer categories. For alcohol is contained in liquids and cannabis derivatives can be in three physical forms. The value of legal market of cannabis and its products can reach 10% of the world beer market in five years, and in 2030-2040 even reach the same scope provided the current rates of legalization and development of market infrastructure remain at the same level. Cannabinoids are actively integrating into the food industry from chewing gum to beverages deforming the pharmaceutical and alcohol markets, they influence the trends of healthy lifestyle and beauty. ...
Beer market of Kazakhstan acquired both traits of East European countries and South Eastern Asia taking a transitional position between them by many criteria and consumption style. Yet there is a positive trend in beer production which differs Kazakhstan from most of the neighboring countries. The market has remained consolidated in the hands of two international players because of its small size. However, it faces dynamic processes such as fast growth of draft beer sales, up and downs of regional companies and Carlsberg Group’s ultimate expansion. Excessive mainstream segment has declined over the recent years, yet, Zhigulevskoe and national brands with regional links have yielded their positions to a range of new products. In our review special attention was paid to regional analysis of the markets. In 14 regions of Kazakhstan we compared the companies’ positions, the market price segmentation and DIOT channel development. Besides we have compared the beer market of Kazakhstan to neighboring countries. ...
Fitch affirms Distilleries Company of Sri Lanka at AAA
KEY RATING DRIVERS
Leading Alcohol Manufacturer: DIST continues to be the market leader in alcoholic beverage production in Sri Lanka due to its strong brands, which drive demand and access to retail points across the island. DIST’s product portfolio includes its mass-market Extra Special Arrack brand, which accounts for the majority of sales, and licensed international brands channelled through its subsidiary Periceyl (Pvt) Ltd. As of the latest published statistics, DIST accounted for around half of Sri Lanka’s total alcoholic beverage production and 72% of the country’s total arrack production.
Spirits to Regain Market Share: We expect the trend of drinkers switching to beer from hard liquor to reverse in 2016, as taxes on the alcohol content in strong beer have caught up with those on hard liquor (spirits) after increases in excise taxes in October and November 2015. Taxes on strong beer increased 70% while taxes on spirits increased 24% from October 2014 to November 2015. Arrack production declined 3% annually over 2011 to 2014, resulting in a smaller share in alcohol sales for arrack, DIST’s main product. However, Fitch expects sales of spirits to grow in the mid-single digits over the next three years, which will help the segment to regain lost market share.
Demand to Grow: We expect demand for alcohol in 2016 to rise as tax-led price increases are likely to be absorbed by rising disposable income. Disposable income is likely to rise, driven by higher per capita income along with the mid-single digit economic growth for Sri Lanka, and following the recent increase in public-sector pay, higher tax exemptions for private-sector employees and reduced essential-goods prices.
Resilient Operating Profile: Profitability remains healthy, which is reflected in the EBITDA margin continuing to be over 30% at 31.4% in the financial year ended 31 March 2015 (FY15). EBITDA margins are supported by DIST’s ability to pass on tax increases to the consumer.
Regulatory Risk: The industry is highly regulated, with a complete ban on advertising and licensing across the value chain acting as a barrier to entry. The industry is also characterised by high and frequent tax revisions, which put increasing pressure on industry players. This risk is partially mitigated by liquor’s contribution to government coffers, with Fitch estimating that liquor taxes will account for 5.1% of total government revenue in 2014. Successive governments have consistently used taxes on alcohol to boost revenue to bridge budget deficits.
Fitch’s key assumptions within our rating case for the issuer include:
– Revenue to grow by mid-single digits over the next three years
– Relatively stable EBITDAR margins driven by lower operating costs and the new bottling line
Negative: Future developments that may, individually or collectively, lead to a negative rating action include:
– Consolidated financial leverage (measured as adjusted net debt/EBITDAR excluding Melsta Regal Finance Ltd (MRF)) increasing to over 1.5x on a sustained basis. (end-March 2015: 0.9x)
– Consolidated funds flow from operations coverage of interest and fixed charges such as operating lease rentals, excluding MRF, weakening to below 4.0x, on a sustained basis. (end-March 2015: 6.7x)
– A structural change in the domestic alcoholic beverage industry that considerably weakens DIST’s competitive position
Positive: There is no scope for an upgrade since the company is at the highest rating on the Sri Lankan National Rating Scale.
At end-September 2015, the group (excluding its finance company subsidiary) had LKR2.3bn of cash and LKR12.5bn in unused facilities to meet LKR5.4bn of short-term debt. In addition, DIST has good access to bank funding because it is one of the larger corporates in Sri Lanka with a resilient cash flow.
26 Фев. 2016