Decipher the story of BIA’s price increase: Cans increase by 40%, bottle caps increase by 35%, paper boxes increase by 15%, most importantly
Russia-Ukraine conflict pushes beer prices up
According to the agricultural newspaper reported in March, the Russian-Ukrainian conflict The outbreak on February 24 caused the price of oil, food, vegetable oil and a series of products to increase sharply.
In particular, beer is also a product with a sharp increase in price due to many consumers Boycott Russian Vodka Switch to beer. It is worth mentioning that a significant proportion of the barley used as a beer ingredient comes from the Ukrainian war zone.
According to a report by WISN, barley is one of the most important ingredients for beer production, which is grown a lot in Ukraine. The area has long been called the “breadbasket of Europe” due to the barley production grown in the Black Sea grain belt.
Jim McGreevy, president and chief executive officer of The Beer Institute, said: “Ukraine accounts for about 20% of beer production using barley. “This conflict-ridden country is one of only five producers. Barley is the leading barley in the world, so brewers, especially at the global level, will have to constantly update and monitor the situation of barley supply and prices.”
While most small to medium-sized brewers everywhere are looking to raise prices, some large brewers, such as Molson Coors, are said to be able to withstand the higher costs while keeping their prices. same price as before the crisis.
Paul Johnson, brewer at St. Paul Fish Company in Wisconsin (USA), said the war has pushed up the prices of goods and drinks, especially beer, at bars.
“This is similar to the way people used to pay 50 cents per pint of beer, but soon the price will probably be a dollar. But it also happens nothing is too crazy“, Mr. Paul explained.
Beer prices increase “nothing is too crazy” but “pain in the wallet” of drinkers
Under the pressure of raw material costs, domestic enterprises producing this product are facing difficulties in both supply and input prices, many types of beer continuously increase in price.
At the end of March, Hanoi Beer Trading Joint Stock Company (Habeco) – the owner of Hanoi beer brands, Hanoi draft beer, Truc Bach… announced to adjust the price of draft beer from 10/02. 4. Specifically, 30, 50 liter draft beer increased by 1,001 VND/liter; 2 liter keg beer increased by 4,117 VND/liter; 1 liter draft beer (carry 6 bottles) increased by 7,062 VND/liter.
Previously, on January 1, this business announced an additional price increase of 616-1,110 VND/liter.
According to Zing, Habeco said that under the influence of the Covid-19 pandemic, the energy crisis in Europe, the Russia-Ukraine conflict caused the supply chain to break. Prices of input materials increased continuously in the first 3 months of the year such as: cans increased by 30-40%, bottle caps increased by 35%, paper boxes increased by 15%… and is expected to continue to increase.
In fact, not only Habeco but also many beer brewing enterprises have to simultaneously increase their selling prices due to the pressure of rising raw material costs. On February 4, Carlsberg Brewing Company (Denmark) said it would raise beer prices in 2022.
Recorded at some supermarkets and shops in Hanoi, the price of many types of beer increased by several tens of thousands of dong/barrel compared to the end of 2021.
Hanoi beer sold at Aeon has increased to 309 thousand VND/barrel
Refer to e-commerce sites such as Tiki, Shopee, .. the price of 1 box of Hanoi beer as above fluctuates around 300,000 VND/barrel.
Just on New Year’s Eve 2022, BigC also sells Heineken Sleek for 392 thousand VND/box of 24 cans
Now the price is more than 400 thousand VND/barrel
Green Bach Hoa website
Other beers are listed at Bach Hoa Xanh
Pictures on the website of Bach Hoa Xanh
Pictures on the website of Bach Hoa Xanh
How are the production costs of the two giants SABECO and HABECO of Vietnam?
In the Vietnamese market, Sabeco and Habeco are the two domestic enterprises with the largest beer market share, owning famous domestic beer brands such as Hanoi Beer, Saigon Beer, and Truc Bach Beer.
According to the audited financial statements released for years, Sabeco’s cost/revenue (net) ratio is always lower than Habeco’s. The production cost difference in years ranges from 1% – 3%, however, starting to widen the gap from 2020 and ending in 2021, the gap between this ratio of the two companies even increases. to 9%.
This shows that, with over 100 dong of sales, Habeco’s production cost is 9 dong higher than Sabeco’s.
Aggregate data from audited financial statements of enterprises for years
It can be seen that after peaking in 2018, Sabeco has “pulled” the production cost / product unit down, specifically the COGS/Revenue ratio decreased to 71%, 66% respectively. and 67% for the next 3 years.
Not by “accidental” or “lucky” but in fact Sabeco has applied many measures to reduce production costs. For example, in 2020, despite difficulties in alcohol consumption, sales volume decreased markedly, but this business has made spectacular efforts to reduce product costs through the following ways:
The firststrengthen the management of Materials, specifically:
Planning the supply and making backup purchases of input materials to ensure continuous production.
Balance and strictly control the amount of beer produced daily and weekly.
Work closely with trading companies, transporters and logistics companies to respond to “weekly orders” announcements and limit beer inventories at breweries.
Strictly comply with SABECO’s regulations to ensure product quality and limit defective products sold on the market.
Thanks to extreme measures, the percentage of input materials and packaging used in 2020 is significantly lower than in 2019. Source : Sabeco’s 2020 Annual BC
Second, saving electricity in production through specific measures such as: Maintaining and upgrading machinery, technology and infrastructure to save energy; Reduce the evaporation rate at the boiling pot; Take advantage of the dilute sugar solution from the process of filtering and recovering the solution, flower residue in the vortex settling pot…
Limit electricity use during peak hours; Use heat exchanger to cool water before supplying to vacuum pump; Using BIOMASS boiler using burning materials from plants (rice husk, sawdust, cashew nut shell and leaves); Invest in a solar power system…
In addition to electricity, water also plays an important role in beer production, Sabeco has implemented recovery and reuse of pot wash water at the brewery; recovery and reuse of hot water for pipe sterilization; reuse waste water and excess hot water from energy-saving systems; use heat pump to limit water discharge at the sterilizer; Collect all condensate and return it to the boiler.
The results of electricity and water consumption in 2020 only increased slightly compared to 2019
Source: Sabeco’s 2020 Annual BC
Thanks to the reduction in production costs per unit of product sold, in 2020, despite many difficulties in sales due to the impact of Covid and Decree 100, Sabeco’s revenue decreased by 24% compared to 2019 but Gross profit only decreased by 12% and Net profit from business activities decreased by less than 600 billion VND, equivalent to nearly 9% compared to 2019.
Hoping to face the “wave” of raw material price increases, businesses will constantly try to find ways to save production costs, reduce consumption, .. to keep the price as “chill” as the taste. the beer they used to advertise.
Following the Economic Lifestyle
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
