“ Beer is a product in packing “Consolidation of beer branch has practically come to the end, Russia passes from the category of the developed markets of manufacture developing in a category and beer consumption. Brake this process rigid restrictions of advertising of the beer, negatively affected marketing activity of brewers could not even. The head of executive secretary of the Union of brewers of Russia VYACHESLAV of MAMMOTHS has told about key tendencies and the further prospects of development of beer branch to correspondent BG to IRINA PARFENTEVOJ.
BUSINESS GUIDE: the Five of leaders of beer branch supervises today almost 80 % of this market. At the expense of what the market will develop within the next five years?
VYACHESLAV of MAMMOTHS: If to speak about prospects some tendencies here are allocated. In - the first, change of geography of manufacture and consumption. The next years manufacture and consumption will grow first of all at the expense of regions. It is a question of the Volga region, Ural Mountains and Siberia. The leading companies or have already begun building of new factories in these regions, or declared the intention to make it in the near future. The second tendency is a gradual decrease in rates of dynamics of growth of the market that correlates with universal processes. The beer market in Russia possesses potential, but at the same time is close to the saturation. Under our forecasts, the next years dynamics of manufacture will not exceed 5 - 7 %.
BG: since January, 1st, 2008 the excise rate on beer has raised more than on 30 % - for 57 copecks. How it will be reflected in branch?
Century M: it is important to understand that it is a question not simply of mathematical increase in the rate of the excise. This decision mentions the whole complex of social and demographic problems. First of all, economic aspect. Today the enterprises of brewing branch, carrying out almost on 100 % the tax obligations of all levels, are among bjudzhetoobrazujushchih the enterprises both for a number of municipal unions, and for subjects of federation. The increase in tax loading will negatively affect profitability of brewing manufactures, first of all the small and average brewing enterprises as they do not possess resources for levelling inevitable in such conditions of growth of the cost price. Small and average factories either will be closed, or will start the production not profile kinds of production, or will stop manufacture. Practice of last years shows that the increase in the rate of the excise conducts to decrease in rates of increase of the brewing industry that as a result will lead to reduction of taxable base of budgets of all levels.
BG: Than the authorities give reason for growth of the rate of the excise?
Century M: In many respects it is connected with inflationary processes. Throughout last number of years a rise in prices in a segment “ beer “ lagged behind the general growth of a consumer price index. Brewers against a high competition in branch are compelled to constrain a rise in prices at the expense of internal resources. At the same time it is necessary to understand that these possibilities are not boundless also increase in the rate of the excise at beer at 32,4 % will urge on consumer inflation.
I think, for anybody not a secret that the price is the defining factor for the majority of the population at a choice of type of alcohol. Considering traditions existing in our country to drink on purpose to gain the maximum effect for smaller money, the problem essence becomes obvious. In Soviet period srednerynochnaja cost of one bottle of vodka made 3,62 rbl., and beer bottles - 0,34 rbl. Presently the average price of a bottle of vodka - 90 rbl., beer - 20 rbl. Thus, the operating excise policy directly promotes increase in consumption of drinks with the high maintenance of ethyl spirit. The exit from the created position sees in the prompt acceptance of the state measures on change of structure of consumption of alcohol in our country transition from consumption of strong alcohol to beer and other natural drinks. As one of effective measures in this direction there could be a freezing of the rate of the excise on 2009 - 2010 at level of 2008.
BG: As preferences of consumers in various segments of the beer market have changed?
Century M: the brightest tendencies of last time is a strengthening of positions of a licence segment and share decrease srednetsenovoj categories. Demand for licence grades grows fast rates. So, following the results of the second half of the year 2007 of sale of licence beer have made 11,3 % from volume of all beer sold in Russia. It is promoted by some factors. In - the first, increase in incomes of the population, especially in the big cities, stimulating consumers to transition to more expensive grades. In - the second, the aspiration of the companies to strengthen the positions in a segment with high marzhinalnoj a component affects. To the most popular remains srednetsenovoj a segment - 46,9 % from total amount of sales though its share in 2007 was a little reduced. The discount segment continues to grow gradually: following the results of the second half of the year 2007 its share has made 18,3 %. The Principal cause of this tendency is connected with active advancement of container of great volume.
BG: In world HoReCa (from English Hotel, Restaurant, Cafe. - BG ) is a serious commodity market of beer production. How much this segment is significant today in the Russian beer market?
Century M: Unfortunately, in Russia only 7 - 8 % of consumed beer are necessary on sector HoReCa, while in the same Great Britain - an order 90 - 95 %, and in Europe - 50 - 60 %. The reason is covered and in the developed consumer stereotypes, and in state of the economy as a whole. For the domestic consumer beer is a product in packing, we do not have bar culture, as in the West. And the average check at beer restaurant at us makes 10 - 12 % of the average salary, whereas in Europe - 1 %. The exit here is simple: it is necessary to create conditions for attraction of investments into segment HoReCa, to open the institutions accessible to the majority of the population. And certainly, to lift a standard of living.
BG: the Law “ About advertising “ seriously limits brewers in possibilities of advancement of their production. Restrictions mention including sponsorship of sports actions. How manufacturers solve this problem?
Century M: First of all would like to notice that the domestic advertising legislation one of the most rigid in Europe concerning beer. Besides, recently in the State Duma bills which provide reduction of advertising time on television and an interdiction of advertising of beer for transport are introduced. It is necessary to notice that the given projects were developed without opinion of professional community and can negatively be reflected in development of the brewing industry in the near future already.
recently one of most vital topics in a context of advertising regulation of the market of beer is sponsorship. All over the world sponsorship is a form of mutually advantageous partnership of the state and business. Foreign beer brands throughout many years act as sponsors of the international sports associations, national competitions on popular sports - to football, hockey, biathlon and so forth In Russia too so was till 2004 since which placing of advertising of beer at stadiums (so, and sponsorship for the brewing companies) is forbidden. As a result the Russian sports have lost rather considerable financial assets. Today, on the threshold of the Olympic games of 2014 in Sochi, have again started talking about necessity of removal of such interdictions. In the State Duma the bill which provides removal of restrictions on placing of advertising of beer at stadiums during carrying out of the international competitions and the championships of Russia is introduced. If legislators really think of well-being of domestic sports, health of the nation, they need to make the balanced decision on sponsorship.
BG: whether there Can be Russian manufacturers the strong contender to foreign brands in the foreign markets?
Century M: the Exit of domestic brewers on the far abroad markets is first of all the contribution to image of Russia. However, to 90 % of all Russian beer export it is necessary to the CIS countries. Our manufacturers makes a serious competition to local beer factories that, unfortunately, leads to administrative measures of protectionist character concerning the Russian deliveries.
BG: last years the Russian brewers gradually refused malt purchases abroad, actively developing raw materials manufacture. The share of domestic malt in the market grew recently?
Century M: If some years ago security of branch malt of the Russian manufacture made less than 30 % now this indicator has risen to 70 %. To reach it it was possible thanks to development by the enterprises of branch of own raw-material base. These are such companies, as “ Baltic “ “ Ochakovo “ “ the DIGNITY InBev “ “ the Hilt Russia “. For today the brewing companies it is started ten solodoven by total capacity more than 1 million t malt in a year. I consider that the state as this factor will positively affect dynamical development of agriculture of the country is interested in investments of manufacturers of beer into agrarian and industrial complex development. After all it and creation of new workplaces, and qualitative production, and, finally, increase in taxable base.
BG: What changes occur in the market of beer container?
Century M: Changes of structure of this segment of the market are in many respects connected with elasticity of a consumer demand and with marketing strategy of manufacturers. In 2007 the basic tendencies of development of the market tarirovannogo beer have remained. Share PET has continued to grow, having reached 47,1 % while the share of a glass bottle was reduced to 38,3 %. It is important to notice that rates of increase of relative sales PET - packings were slowed down. Obviously, it testifies to the outlined stabilisation of consumer preferences in a container choice. As to canned beer its share has increased to a maximum level - 14,6 % in natural expression.
BG: After restrictions of advertising of the beer, accepted by the State Duma in 2004, the brewing branch began to give more attention to social projects, positioning itself as socially responsible business. What projects are realised by the Union of brewers?
Century M: the Union began to realise the social projects much earlier, and it is not connected in any way with acceptance by the State Duma of restrictions on beer advertising. One of such projects is connected with sphere of self-regulation of brewing community. In 2003 the union has accepted “ the Code of honour of the Russian brewers “ - the agreement on rules of professional work and standards of business ethics. The code contains variety of restrictions which even are more rigid, than the current legislation. So, for example, participants of the code guarantee not to address in the advertising to the persons operating vehicles, pregnant women, not to spend actions, competitions, the competitions directed on encouragement of overconsumption of beer, not to be engaged in advertising of beer and advancement of our production as the sponsor or the official partner in the mass actions organised for persons, not reached age of 18 years.
if to speak in whole, in modern Russia exists two approaches to business dealing. The first is constructed on the thesis: “ I regularly cry taxes and by that I fulfil the duty to the state and a society, the rest me does not concern “. At the heart of the second approach strategy of development of the business lies, based on aspiration actively to participate in the social processes occurring in a society. The brewing industry consistently develops this principle throughout last 15 years.
in sphere of social responsibility brewers have made much, therefore at a given time there was a necessity to tell about the saved up experience. So we have started to develop institute of the branch social reporting. The union became the first association of the manufacturers which have presented the consolidated position in sphere of not financial reporting. In 2008 we work already over the fourth social report of brewing branch.
Besides, the union realised a number of significant social projects. First of all, it is the project directed on prevention of consumption of beer by minors. In December, 2004 the union has suggested to establish a legislative interdiction for sale of beer by the minor and administrative responsibility for its infringement, and on April, 15th, 2005 such law has come into force (FZ “ About restrictions of retail and consumption of beer and the drinks produced on its basis “. - BG ). Now the program " is realised; After 18 “ developed by the Union of the Russian brewers. The special warning sign " became its basic element; Sale of beer by the minor is forbidden “. In 2006 - 2007 of the company - members of the organisation have extended 1 million such signs - stickers in 500 000 retail shops on all territory of the country. Besides, members of the union use the sign image in all forms of advertising communications (including external and TV advertising).
In 2008 we plan to carry out a new stage of the action “ After 18 “ under a slogan “ Is 18? Confirm! “. Its essence in the following: The seller bears responsibility for observance of an interdiction for retail of beer by the minor, means, it should have a possibility to address to buyer with request to confirm age with the corresponding document.