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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.

China Resources Beer goes upmarket to counter slowing sales

China Resources Beer is counting on the premium segment to boost margins as the country's sluggish economy and intense market competition has hurt beer sales.

CR SnowFull-year underlying profits for the group's beer assets increased 14% to HK$831 million ($101 million), partly helped by a 3.2% increase in its average sales price. Revenue slowed to 1% growth, reaching HK$34.8 billion in the 12 months ended December.

The higher profit in its beer business came in spite of a 1.3% fall in sales volume on the year. Meanwhile, the group saw a 15% rise in sales volume from its mid-end and premium sector, which now accounts for more than 45% of the total.

Earlier in March, CR Beer agreed to pay a less-than-expected $1.6 billion for SABMiller's remaining 49% stake in the brewer behind the world's best-selling Snow beer -- China Resources Snow Breweries, which was a joint venture between the two brewers.

Vincent Tse, investor relations director at CR Beer, said the deal was based upon a "friendly price" after "arm's length negotiation," adding that the brewer would not rule out future cooperation with SABMiller and plans to seek overseas partnerships.

While the deal is awaiting regulatory approval and is scheduled to close at the end of this year, Guotai Junan Securities maintained a "neutral" rating for CR Beer on Mar. 2. "The deal is not likely to ease the already intense competition and room for a hike in average selling price is limited in the Chinese beer industry," said Andrew Song, an analyst at the Chinese brokerage.

"Growth has been difficult for the beer industry, but the premium sector is still growing," Jason Hou, general manager at China Resources Snow Breweries told reporters on Friday. The brewer has a "low single-digit" growth target for its sales and average selling price in the coming year, he added.

CR Beer changed its name from China Resources Enterprises after it sold non-beer assets including the loss-making Tesco stores to its unlisted parent China Resources Holdings in September for $3.6 billion. Its underlying losses of discontinued operations, including retail, food and beverages, surged more than threefold to HK$5.65 billion from a year earlier.

The beer market in China is highly competitive. CR Beer had a 23% market share in 2014, with Tsingtao Brewery second at 18%, according to market research group Euromonitor International. The rest is divided between major brewers such as Beijing Yanjing Brewery, Anheuser Busch InBev, Carlsberg and a handful of smaller players.

But others say the beer sector in China still has room for margin expansion and "premiumization" -- a trend that has seen more wealthy consumers trading up to more expensive brands of alcohol.

21 Мар. 2016

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