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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 shares down 4% after rights issue

Shares of state-backed China Resources Beer closed down 4.1% at 16.26 Hong Kong dollars on Wednesday after it announced a rights issue to fund the buyout of the world's best-selling beer from joint-venture partner SABMiller.

The beer producer said it would issue 811.04 million rights shares in order to raise approximately 9.5 billion Hong Kong dollars ($1.22 billion) -- a sum that will partially cover the $1.6 billion transaction of a 49% stake in China Resources Snow Breweries announced in March.

The deal was apparently the result of the merger between Belgium brewer Anheuser-Busch InBev and U.K.-based SABMiller. Their combined market share in China, topping 40%, was said to have triggered antitrust concerns. Selling down Snow, which commands a quarter of the Chinese market, would increase the likelihood of gaining regulatory approval.

Brushing off competition worries, Lai Po-Sing, China Resources Beer's chief financial officer, said at a briefing on Wednesday that "there is no foreseeable stumbling block" to the company's acquisition so far.

"We are very confident that it can materialize," said Lai, adding that the company is considering using internal resources, external financing, and borrowings from parent company China Resources Holdings, to fund the rest of the deal.

The rights issue, likely to be the largest in Hong Kong since last year, is claimed to be fully underwritten by CRH Beer, a controlling shareholder of China Resources Beer and affiliate under the same parent.

The parent's pledge of absolute support, said Lai, is "a reflection of [its] optimistic outlook for the beer industry in China" as well as China Resources Beer. "It is not looking to increase control of the company at all."

Excluding the divested non-beer business, the group recorded a 14% surge in underlying profit to HK$831 million and a 3.2% increase in average selling price in 2015. However, its revenue at HK$34.8 billion was flat compared with a year ago.

A slowing economy and maturing consumer tastes on the mainland has hurt the company which has long been relying on the mass market.

"China's beer market in the first half is not doing very well," said Hou Xiaohai, China Resources Beer's CEO. "It's unlikely that the second half will see an upturn, as macroeconomic conditions remain bleak."

Hou reiterated that the company will focus more on the mid- to high-end markets. Launching "distinguishing" beers is one way to cater to a more sophisticated consumer segment. But he emphasized that prices would not be revised upward drastically.

The company could not specify when the transaction of Snow would close, but said it had "no plans for other merger and acquisition" at the moment. "Market consolidation will surely continue," said Hou. "We're open to such opportunities."

7 Июл. 2016

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