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. ...
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. ...
India. Will continue to grow ahead of the market: Shekhar Ramamurthy, MD, United Breweries
ET Now: Walk us through what impacted your numbers this time?
Shekhar Ramamurthy: What I would like to do is actually put these numbers in perspective, if you look at our full year performance, we have had a revenue growth of over 8%, we have had an EBITDA growth of almost 17% and PAT of close to 14%. So I would not look at just the Q4, I would look at the full year results and say that actually our results have been very good or if you look at EBIT margins, our EBIT margins have actually improved over last year from about 11.1% to about 11.8%.
So overall we have had a very good year. Q4 is sometimes is a result of cost pressures we have had and as you know the first three quarters of last year, the cost were under control because commodity prices were, however, and commodity prices are strengthening particularly but if you and you will see little later the price of barley has increased, the price of sugar has increased. So there has been a little bit of pressure on cost. However, overall our results I believe have been very very good.
ET Now: What is the game plan for FY17? And if we have to compromise on one between pricing and volumes, what would you do and do you?
Shekhar Ramamurthy: This is a very classical question, the compromise or the trade off between price and volume and what makes this question more complicated in our business as you know we are state specific business so our prices vary across states. In many of the states our prices are dependent on what the state governments allow us. So in about 60-65% of the markets we sell to the state government who are the first point of sale and they control the price at which they buy from us. Having said that they keep increasing their duties so the consumer pays more but that is not the case for us.
So going back to your specific query this is a classical trade off and it has never one against the other, it is a combination of many factors. We believe that the industry will show modest growth going into 2016-2017 anything about 5%, if again you recall the first half of the last fiscal 2015-2016 the industry was flat actually there was a marginal decline, however, for the full year there has been a modest growth of 3% to 4% and we believe that it will this growth will sustain going into 2016-2017 and we would continue to grow ahead of the market.
Our pricing will depend on, it also depends on a state mix so we are quite confident that we will be able to maintain the balance that we have had over the last several years as you know we are perhaps the only beer company in India which makes the profits all the others make a loss. So we have a healthy mix of states, we have strong brands, we have good pricing and if the volumes grow as we believe they will this year, we will have a healthy combination between volume growth and profit growth.
ET Now: Has prohibition in Bihar or law change in Kerala affected you and are you worried about the fact that more and more state governments now are echoing the fact that there should be complete prohibition that seems to be on the manifesto even of AIDMK?
Shekhar Ramamurthy: Yes, this is indeed a worrying factor. However, I would like to say that all of us who have been in this country for many years that prohibition has never worked. You might recall that two decades ago the then undivided state of Andhra Pradesh had imposed prohibition, however, within two years they had to revoke it. Similarly the state of Haryana had imposed prohibition and within a year they had to reverse the decision and the main reason for that is all the revenues from excise on sale of beer and spirits accrues to the state, the centre does not get any share of that.
By virtue of that a large percentage or proportion of states' revenues comes from the beers and spirits. However, having said that I would like to also state that as the beer industry we are sympathetic and we understand the compulsions that wherein the state governments want to protect the weaker sections of society from abuse of alcohol and herein we believe lies the opportunity for beer we are a low alcohol beverage. In India the per capita consumption of beer is less than 2 per litre whereas the global average is around 30. In fact even a country like Vietnam has a per capita consumption of 40 and therein lies the opportunity wherein states can balance in a responsible way.
ET Now: For FY17, would you within the beer market gather more market share and will that lead to a 15% kind of revenue growth YoY that people are pencilling in right now?
Shekhar Ramamurthy: We do not put out forward looking numbers so I would not like to comment on that. However, it has always been our objective to grow ahead of the market and we will definitely, we are very confident that we will do that which will result in adding share and if we look at our performance over the last five-six years we have consistently delivered revenue growth ahead of volume growth.
Notwithstanding the pressures that may be there in the industry, we recognise that there are headwinds of prohibition. We also believe that whilst there is a big impact in some states we also recognise and believe that most of the state governments will take more pragmatic, more responsible approach to it and the beer industry and I am speaking here as a beer industry welcomes the opportunity to enter into a dialogue with various states and work on progressive excise policies.
16 мая. 2016