The second largest beer producer in the country is set to bring in a new brand to challenge the market dominance of San Miguel. Asia Brewery Inc. (ABI) has partnered with Japan's Asahi Breweries Ltd. to expand the premium beer market in the country by bringing another product. “The premium beer market is quite small. It's only 0.1 percent of the total beer market,” Hubert Tan, ABI vice president for marketing, told reporters at a briefing Friday, noting that the market share is considerably less than Hong Kong, Singapore and Malaysia’s 5 percent. “The only active player is actually San Miguel. None of the major international brands have gained a foothold here and we are attempting to do just that... grow the market," he added. Currently, the Philippine beer market totals 200 million cases in annual sales. Tan cited “lack of foreign brand and competition” as main hurdle for the growth of the premium beer market in the country. “So, as we enter we expect stronger growth for that segment,” he said. ABI is planning expand the premium beer’s share through its exclusive distribution of Japan’s number one premium beer, Asahi Super Dry. The brand will attempt to challenge San Miguel Brewery Inc.’s two premium beers sold locally – San Miguel Super Dry and Kirin, another Japanese brand by Kirin Holdings Co. Ltd. “Now, it’s (premium beer market) largely composed of San Miguel Super Dry. Based on aggressive sales volume that we have, we should be able to sell more than this,” Tan said. ABI eyes to corner the A and B segments, which comprise for the total 2 percent of the total beer market, through its distributorship of Asahi Super Dry.
“It’s a foreign brand, so it’s a little pricier. But, of course, there’s opportunity to grow in other market segments. We’ll do it,” Tan said. “The focus for Asahi is to target the chains of hotels, restaurants and bars we have partnerships with throughout the country,” he added. At the same briefing, Asahi Group Holdings Ltd. International Business Section Manager Akira Tsuiki said they chose to partner with ABI “because of the scale of the distribution network it currently has, and product portfolio match.” Asahi Group’s public relations section manager Takayuki Tanaka said they sealed a distribution partnership with a Philippine company because of good economic prospects in the country. “We've seen the movement of the economy of the Philippines and it goes beyond,” he said. Tan also said that ABI is open to having a joint venture project with Asahi group. “We're always open to joint venture partners,” he said. Tan noted that “what happens after will all depend on how good results are for Asahi Super Dry. This is the first of bigger steps.” Sin tax Tan, meanwhile, brushed off concerns of a beer industry crunch because of the recently passed sin tax reform bill that raised excise taxes in alcoholic and tobacco products.
“We're still quite bullish on the beer market,” he said. Tan explained that of the three “sin” product segment – distilled spirits, fermented liquor or beer and tobacco – beer has the lowest increase in excise taxes. A P15 per liter excise tax has been imposed on fermented liquor products, largely beer, with a net retail price per liter is 50.60 or less. The excise tax for such product -- a bottle of beer, for instance — will increase to P17 in 2014, P19 in 2015, P21 in 2016 and P23.50 in 2017. ABI currently corners 9 percent of the total beer market, with its rival San Miguel getting the bulk of the market share. ABI carries Beer na Beer, Colt 45, Manila Beer, Carlsberg and Lone Star brands. — KBK,
