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. ...
Beer market of Kazakhstan acquired both traits of East European countries and South Eastern Asia taking a transitional position between them by many criteria and consumption style. Yet there is a positive trend in beer production which differs Kazakhstan from most of the neighboring countries. The market has remained consolidated in the hands of two international players because of its small size. However, it faces dynamic processes such as fast growth of draft beer sales, up and downs of regional companies and Carlsberg Group’s ultimate expansion. Excessive mainstream segment has declined over the recent years, yet, Zhigulevskoe and national brands with regional links have yielded their positions to a range of new products. In our review special attention was paid to regional analysis of the markets. In 14 regions of Kazakhstan we compared the companies’ positions, the market price segmentation and DIOT channel development. Besides we have compared the beer market of Kazakhstan to neighboring countries. ...
Sri Lanka. Fitch affirms Lion Brewery’s ‘Aa-(lka)’ rating; says wellplaced to recover from floods
Fitch has also affirmed the National Long-term Rating of ‘Aa-(lka)’ on Lion’s outstanding senior unsecured debentures.
Fitch has maintained a Stable Outlook despite Lion’s weakening credit metrics due to the one-time disruption to production caused by floods in May 2016. Lion is Sri Lanka’s largest beer producer, with a leading domestic market share in the beer industry. Beer is the country’s second most-consumed alcoholic beverage after arrack. Lion’s credit profile is supported by its entrenched domestic brands and limited product substitution due to the high technical competence required for brewing beer in contrast to manufacturing spirits. Lion’s leading position has helped the company secure new brands and access a wide distribution network.
Fitch expects revenue to decline in the financial year to 31 March 2017 (FY17) due to higher excise duties on beer introduced in 2015, as well as lost sales due to a temporarily halt in production, as Lion’s manufacturing plant was heavily affected by Sri Lanka’s adverse weather conditions in May 2016.
However, Fitch expects beer sales to recover from FY18 onwards, supported by rising urbanisation, increasing tourist arrivals and increasing per capita income, which will help the segment regain lost market share.
“We expect Lion’s EBITDA margin to normalise to around 27 percent in the medium-term, from the high of 33 percent in FY16, mainly due to taxes on beer overtaking spirits on an equivalentalcohol basis since late 2015,” Fitch said. However, Lion’s margins should benefit in the long-term from operational efficiencies following an upgrade of its production facilities, which have sufficient capacity for the next five years.
Lion’s revenue declined 52 percent yoy in 1Q17 due to lost inventory and a temporary manufacturing halt caused by the floods.
The company is importing beer until local production recommences in late 2016 to mitigate the loss, but this is limited to its main product categories and may negatively affect margins due to the higher costs of imports. Losses on fixed-assets, stock and business interruption are covered by insurance, but the quantum of the claim or when Lion will receive payment is not yet determined.
Fitch expects Lion’s financial leverage, measured as leaseadjusted net debt/operating EBTIDAR, to weaken in FY17 due to lower profitability from business interruption. However, the company should accelerate its deleveraging from FY18, benefitting from lower capex and normalised returns, bringing its leverage ratios below Fitch’s negative triggers.
Meanwhile Fitch cautioned about the high regulatory risks faced by Lion.
Domestic producers of alcoholic beverages face high excise duties, which put legitimate alcoholic beverages outside the reach of many people. The 2015 double duty hike led to tax on strong beer overtaking the tax on hard liquor on an equivalent-alcohol basis, which we believe will slow the demand shift to beer from hard liquor.
Fitch expects further tax increases on beer to moderate, now that beer is taxed more than hard liquor.
31 Авг. 2016