Kazakhstan: Beer market saw imports increased by 25% in the past 5 years

Kazakhstan beer market is estimated at KZT 60-67 billion (near US$590 million). The market growth rate was 25-30% during the last 5 years. The current year is said to preserve the same increasing trend. Even if the first trimester of the year is traditionally not very prolific for beer sales, the market increased during the first 4 months of 2006 by one third year-on-year, The Union of Russian Brewers said July 17.

There are presently 80 functional breweries in Kazakhstan. The domestic market leaders are “Shimkentpivo”, “Effes-Karaganda” and its Alma-Ata affiliate “Debres Brewing Company”, JSC “Rosa” (Pavlodar), “Dinal” (Heineken). In addition, large international brewing companies like Baltic Beverages Holding (BBH) and SUN Interbrew are the ruling beer importers in Kazakhstan. Leader breweries hold a 90% share of overall Kazakhstan beer production and shipments. Ten leading local brands (Baltika, Derbes, Irbis, Karagandiskoe, Klinskoe, Tian-Shan, Pavlodarskoe, 130, Shimkentskoe and Alma-Ata) account for 80% of the national beer sales.

Erzmann Brewery analysts estimated imports are generally to increase. In 2001, the market share of the imported beer was over 2%. This year forecasts say this figure may reach 19% and almost 26% in the year ahead.

Experts believe the market is suffering from a deficit of original domestic brands. Local breweries must develop their brand portfolio in order to counteract international brands pressure which are also well promoted. Decreasing the brew’s quality as well as the attenuation of the marketing policy immediately after releasing the brand are the two most prevalent mistakes of the national brewers which subsequently lead to lower beer sales and, worse, to a defunct brand.

Since Kazakhstan is a recovering economy with upgrading wages and life quality, reports provided that beer tastes follow the same path. “We expect a segment distribution in 2006 between people who drink expensive beer (1% from 0.5%), low cost beer (from 40% to 20%), medium cost beer (69% from 55%) and premium beer (10% from 4.5%),” analyst from Erzmann Brewery stated. The economic situation reflects a new orientation of beer tastes among drinkers, which is very natural, experts believe.

Russia is the leading exporter to Kazakhstan with its most exported Baltika brand line. At the same time, Kazakhstan breweries are less oriented to exports. According to the Union of Kazakhstan Brewers, domestic breweries exported only 0.5% of their production in 2005.

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