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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.

Vietnam’s brewers say new luxury tax rules hurting beer market

Many brewers in Vietnam, one of the largest beer markets in Asia, are calling for the government to rethink its new luxury tax policy, saying higher taxes will push prices up and hurt sales.
According to local media reports, the companies said at a meeting on Wednesday that they are very concerned about their business.

On January 1, the special consumption tax rate on beer was increased from 50 percent to 55 percent.

On top of that, new regulations also changed how the tax is calculated. Brewers are now required to work out the average retail price of a product, then add 7 percent to that number to come up with the final taxable price.

Speaking at the meeting, Le Hong Xanh, deputy CEO of the country's biggest beer maker Sabeco, said the government should suspend the new rules for at least one year, or brewers will have to increase their prices to make up for the tax hike.

Nguyen Hong Linh, CEO of Habeco, another major brewer, agreed. He said businesses need more time to prepare for the changes and reduce business risks.

He pointed out that the new rules were announced at the end of October last year and came into effect on January 1, not giving the industry enough time.

Nguyen Van Viet, chairman of the Vietnam Beer Alcohol Beverage Association, was quoted as saying that once local products become expensive, cheap products such as smuggled and counterfeit items may flood the market.

The brewers' request was supported by the Vietnam Business Forum, a group of associations of foreign businesses such as the US and European commerce chambers, Tuoi Tre reported.
The group has sent a proposal to Vietnam's national legislature, asking it to revoke or suspend the new rules.

Many beer businesses said the "average retail price" rule is particularly problematic.

They said it is impossible to know exactly how much retailers, such as restaurants and bars, charge their customers to come up with an average price for luxury tax calculation.
But tax agencies may have their reason to tighten the rule.

Previously beer producers calculated the tax simply based on the wholesale prices that they themselves set when selling to their distributors. That potentially created a loophole that allowed some companies, with their own network of distributors, to rig the system by setting unfairly low prices.

In July last year, for instance, state auditors ordered Sabeco to pay VND408 billion (US$18.68 million) in luxury tax dues that it allegedly owed from 2013.

The brewer was accused of selling its products to Sabeco Trading Co. Ltd, which it fully owns, at low prices thus paying less taxes. This company then sold the products, once again at low prices, to 10 other "regional" distributors, in which Sabeco has at least a 90 percent stake.

The scheme allowed Sabeco to pay only a small amount of luxury tax, before increasing final prices when dealing with retailers, local media then reported, citing state auditors.
Vietnam’s beer production grew 10 percent to 3.4 billion liters last year and will hit 4-4.25 billion in 2020, according to figures from the beer association.

21 Мар. 2016

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