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global forces and the european brewing industry

Category: Business Paper Type: Homework Reference: APA Words: 1500

Assignment On Global Forces and Western European Brewing Industry Submitted by Dated Global Forces and Western European BREWING Industry What is the story? (Case studies as detective stories) What are the key problems, themes and issues? These may help you spot question areas In recent past years the consumption of brewing industry is significantly decreased it is due to .globalization effect and competitiveness in brewing industry. From 2006 to 2011 about 10% decreases in demand seen. European brewing industry which was the leader in past now meet only 5% of the world demand and the demand have shifted to other region as seen from the percentage of contribution to brewing industry by china is 24% brazil cover 7% Russia have 7% in his part and U.S covers 13% demand of the world. This decrease in demand is due to restriction on during drive drinking. However, the European brewing industry is focusing more off trade than off trade and increasing their distribution network to make more supplies to retain whole sales and super markets rather than hotels motels and restaurants. As a result, now off trade is increased from 46% to 59 % during 2006-2011. These super markets use cut price terminology to gain more customers. They have introduced their own-labeled brands and have more worth than the manufacturer brands. On trade have an issue that there are too much restriction on hotels and restaurants and on average about 18 pubs closed during each week. However instead of decrease in on trade the sales are still increasing due to vast product line of bear the brewer have introduced new premium bears winch generate them high profit on the other hand they also import high quality bear from abroad. Major part of the brewer cost includes packaging, raw material and energy. The main problem is that the packaging industry is highly consolidated and the brewing industries have to spend about half of labor amount on packaging. There are only three Can manufacturers in Europe currently. Brewing industry in Europe is now consolidating for sustaining because is market is over concentrated and the companies are facing losses therefore they are going for the mergers and strategic alliances. As in 2004 A-B InBev formed as a merger of Belgian brewer and AmBev in 2008, it also absorbed American Anheususer-Busch in it. In 2002 the Australian brewing company acquired and American brewer “Miller group” and Pilsner Urquill. They also bought a Australian “Brewery foster” in 2011. Leading brewers of china and America are also being captured by the large organizations i.e. a “Duch Heinken” bought México top brewery “FEMSA” in 2010. Currently there are about 10 companies, which are covering the 60% of the brewery market of the world. These companies include as follows with their respective share as per record of 2011 Concentration of few companies in brewery industry is leading anti competitive environment in industry and knocking out small brewers.. What type of product/ service is involved, what type of industry structure, what type of company? Brewing industry gives vast line of product for customers. They are offering new premium and royal products, which is deriving more profit for them. They offer alcohol free bear, different flavored bears and craft bear which is also imported from other countries. Their major cost includes packaging raw material and energy consumption in manufacturing process. If we see the stats of the import of bear these can be seen significant increase, Except the Spain and Norway who have reduced their imports by 2.1% and 4.3 % respectively. All the rest countries have shown increase in imports of bear products. However the industry is going consolidated few manufacturer ruling over the industry as per report of 2011 about 60% of the brewery industry of the world is served by only ten companies of the world they are doing mergers and strategic alliances and acquiring other firm which is removing the competitive environment in industry. On the other hand, the packaging industry also has their oligopoly in Europe. Currently there are only 3 Can Manufacturers who serve the whole Europe. Thre are three leading companies in brewing industry which count in top top ten companies in brewing industry. which include Aheuser-Busch inBev(belgium), Green King(Europe) and Tsingtao (China) A-B InBev have the most market share with 18.2% in global market. they changes their strategy decade ago they countinue to make mergerr to gain economy of scale. while the Tsingtao have the global market share of 3.6%. it have 14% of china market and have share of 50% sharte in global ber exports. Green King also leading company and distribute its products to whole world.they also focused on acquization to reach at this level.

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