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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.

Boozy battle-ground: a turf war brews in Myanmar

At a beer station on Bogyoke Aung San Road, servers traipse from table to table, handing mugs of Myanmar Beer to cheroot-smoking men in longyis. Another beer station in Sanchaung township looks almost exactly the same, but with Dagon Beer decorations and brew dripping from the taps.

beers-2

All over Myanmar, domestic brands such as Myanmar and Dagon have dominated the beer market since the early 1990s, when the military regime established the Union of Myanmar Economic Holdings Limited (UMEHL) conglomerate and founded Myanmar Brewery Limited. At the time, an import ban on foreign beer ensured their hold on Myanmar’s drinkers. Drinking beer became a de facto toast to the military elite.

But, like everything else in The Golden Land lately, the beer landscape is changing – rapidly. The USDP-led former government loosened restrictions, and in 2013 Carlsberg Group secured one of four foreign beer brewing licences. The Danish company formed a joint venture with U Thein Tun’s Myanmar Golden Star (MGS) to build a US$75 million brewery in Bago, where they now brew Carlsberg, Tuborg and a Myanmar-specific brand called Yoma. (U Thein Tun also owns the majority share in Myanmar Consolidated Media, which publishes The Myanmar Times.)

Heineken’s Asia Pacific Brewery (APB) scooped up a licence two years later, joining with U Aung Moe Kyaw’s Alliance Brewing Limited and building its own $60 million plant in Hmawbi, less than 100 kilometres from the Carlsberg facility. Along with the namesake brand, Tiger Beer and ABC Stout, the Dutch company has begun marketing Regal 7 beer, a Myanmar-specific brand that will compete with Yoma and Myanmar.

Despite international reach and clout, however, both companies have struggled to make a dent in the military’s substantial market share, estimated at roughly 60 percent of the market. UMEHL – which saw Japanese giant Kirin buy a 55pc stake for $560 million after former partner Fraser and Neave was booted – brews Myanmar Beer, Black Shield, Andaman Gold and Myanmar Premium out of its Myanmar Brewery Limited. It also wholly owns and operates Mandalay Beer, the country’s oldest brew dating back to the 1850s. The Myanmar Economic Corporation (MEC), which functions in a similar fashion as UMEHL and was also founded by the military, claims another 10pc of market share, brewing Dagon, Dagon Light, Dagon Super, Dagon Malta Fresh and Dagon Extra Strong.

FINGERS IN MANY ... GLASSES?
In addition to ABC’s joint venture with Heineken, U Aung Moe Kyaw is one of the largest players in another drink market: whisky.

Through his International Beverages Trading Company Ltd (IBTC), founded in 1997, he owns a 50pc stake in the Myanmar Distillery Company (MDC). The company claims to control roughly 80pc of the total whisky market, with its Grand Royal whisky line (plus all of its derivations) being the most popular brand.

The other 50pc stake in MDC has been owned by TPG Capital, an American private equity firm, since 2015.

Among others, MDC also produces Eagle whisky, Golden Island rum and Grand Royal gin.

Grand Royal has also been Chelsea FC’s “official whisky” in Myanmar since 2012.

Beer, whisky and Premier League sponsorships; he certainly has the liquid version of fingers in many pies.

That leaves roughly 30pc of the market up for grabs. Anthony Clark, CEO at Myanmar Carlsberg, said he estimates more than two-thirds of the leftover space is currently occupied by illegal beers smuggled over the Thailand border.

“The border states would have a much higher degree of smuggled beer, for which there is little in the way of reliable information,” he said, guessing that Chang beer would hold a clear lead in that area.

The stream of illegally imported beer often works its way through ethnic armed groups thirsty for funding, said one industry source who asked to remain anonymous. The source added that the smuggling issue may be factored into upcoming peace talks.

After accounting for these illegal imports, Heineken, Carlsberg and Mandalay brands are left to battle for less than 10pc. And in many instances, they are battling more than each other.

According to notes from a recent Myanmar Carlsberg meeting, the outgoing government made changes to licensing laws in December 2015. Now, breweries are required to obtain distribution credentials by district rather than state or region, effectively quadrupling the number of fees and amount of paperwork needed to pump beer into bellies across the country.

Furthermore, many beer stations and restaurants have five-year contracts with Myanmar Brewery Limited. Those businesses that consider terminating the contract would face a ban on selling competing products for at least one year. Effectively, the only way to get Yoma or Regal 7 into a beer station is to step in as soon as one opens.

The foreign brands are doing just that. Zita Schellekens, the director of corporate relations for Heineken’s joint venture in Myanmar, APB Alliance Brewery Company Limited, said that getting into bars and restaurants is often difficult.

“Of course we take a proactive approach in going to bars that we believe fit our brands,” she said.

So far, premium restaurants have been the main staging ground. New, high-end restaurants in Yangon choose between Carlsberg’s three brands or Heineken’s four, and territory is staked out business by business. Penthouse? Carlsberg. Hummingbird? Heineken. The next fancy joint? Anyone’s guess.

But the staging ground is set to grow. Myanmar’s current beer per capita hovers around 3.7 litres – by comparison, neighbouring Thailand guzzles 33 litres per person, and Vietnam downs more than 40. According to research agency Euromonitor International, the value of Myanmar’s beer market will double from an estimated $375 million in 2015 to $675 million in 2018. During that time, many of the beer stations’ five-year contracts with Myanmar Brewery Limited will elapse, creating a potential gold rush as the foreign brands try to bite into UMEHL territory.

“The fact that the current market is underdeveloped is a challenge but even more so an opportunity,” said Schellekens. “In short, we want the ‘pie’ to get bigger and of course we want to have a bigger part of that pie.“

7 Июл. 2016

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