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BMI's Executive Summary[TOP] The Russian government moved in October to limit surging food prices, as leading food producers and retailers agreed to freeze prices on bread, cheese, eggs, milk and vegetable oil. The authorities applied tariffs on wheat exports of 10% from November to maximise supplies and left the option open to raise rates higher. Officially, food price inflation is being driven by global markets, where record demand from Asian markets and the diversion of crops to biofuels have led to record prices on benchmark commodity markets. Although redolent of Soviet command economy measures, the intervention in the market has been justified in order to restrain inflation, which threatens to exceed 10% for the first time in several years, hitting vulnerable pensioners in particular. Public anger over rising food prices poses political risks as parliamentary elections loom at the beginning of December 2007. Despite the Kremlin's careful management of the pre-election campaign, this unrest could lead to sizeable demonstrations as well as low polling turnout, spoiling of ballots and other mischief. But while global food prices are playing a role, the move to price controls and other administrative measures paper over the longer term crisis in domestic agriculture. The dairy market is just one example: dairy farmers produced 31.4mn tonnes of milk in 2006, compared with 32.3mn tonnes in 2000 and 39.2mn tonnes in 1995. As a result, raw milk prices have risen rapidly, by an annual rate between 10% to 20% in recent years. Rising domestic production by players such as Wimm-Bill-Dann (WBD) and France's Danone are driving demand for raw milk without any increase in supply. With Russia's agricultural sector still dominated by poorly managed and largely unreformed collective enterprises, the pressure could be long-term. Despite these huge challenges, BMI's updated food forecast estimates the total market value will have reached US$189.4bn in 2007, and is expected to grow to US$500.4bn by the end of 2012. Russia places a strong fourth in BMI's new Central and Eastern (CEE) European Food and Drink Business Environment Ranking, due to the continued enormous potential of the market. The country's consumer spending boom is finishing its seventh year and price controls do not affect the higher value-end of the food market or the drinks market. The ongoing battle between Scottish & Newcastle and Carlsberg over control of their joint-venture Baltic Beverages Holding – which owns number-one beer maker Baltika – underlines the continued growth potential of the beer market. Snack makers are also investing heavily in new facilities, with Wrigley and Mars reportedly planning new green-field investments, Cadbury-Schweppes, Kraft and Nestlé planning to expand production and record valuations reported for independent confectionery makers currently up for grabs, such Ruzskaya Confectionery outside of Moscow. With March 2008 presidential polls looming, uncertainty will continue to haunt the current boom, of course and leave key issues such as World Trade Organisation accession up in the air. |
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Contents[TOP] Chapter 1 – Business EnvironmentRetail Business Environment Rankings Table: Central And Eastern Europe Business Environment Rankings SWOT Analysis Russia Food & Drink Industry SWOT Russia Political SWOT Russia Economic SWOT Russia Business Environment SWOT Macroeconomic Outlook Table: Growth And Output Chapter 2 – RetailPlenty Of Potential For Private Labels In CEE Table: PL Market Share Within Overall Food And Drink Retail Sales, 2006, Selected CEE Countries Table: Leading CEE Retailers By PL Market Share Industry Forecast Scenario Table: Russia MGR Value Sales by Format – Historical Data & Forecasts Company Developments Market Overview – Russia Table: Structure Of The MGR Market By Number Of Outlets Table: Structure Of The MGR Market By Value (US$mn) Table: Value Of Sales Per Outlet In 2005 (US$mn unless otherwise stated) Chapter 3 – Food & DrinkCEE Food Focus: Fittest Fight For Future Of CEE Dairy Market Table: EU Allocation Of Milk Quotas To 2004 Accession Countries In The CEE (1,000 Tonnes) Industry Forecast Scenario Food Table: Russia Food Consumption Indicators – Historical Data & Forecasts Drinks Table: Russia Beverage Sectors Value/Volume Sales – Historical Data & Forecasts Industry Developments Company Developments – Drinks Company Developments – Food Market Overview – Russia Table: Russia Agricultural Sub-sector Production (tonnes) Chapter 4 – TobaccoIndustry Forecast Scenario Table: Cigarette Value/Volume Sales – Historical Data & Forecasts Industry Developments Company Developments Market Overview Chapter 5 – Competitive LandscapeKey Players Table: Key Players In Russia’s MGR Sector (2005) Table: Key Players In Russia’s MGR Sector (2005) (continued) Table: Key Players In Russia’s Food & Drink Sector (2005) Regional Company Case Studies Mercator – CEE Case Study Financial Highlights Table: Mercator’s Financial Highlights The Only Way Is Up… Current Position Table: Mercator’s Market Share Growth To 2005 Covering All The Bases The Importance Of Private Label Future Position And Growth Strategies Table: Projected Growth In Market Share, According To Company Strategy, 2005-2010 Group Diageo – CEE Case Study Table: Brand Performance – Europe, Year Ending June 30 2006 Table: Diageo: Distribution In The CEE Groupe Danone – CEE Case Study Groupe Danone – The CEE Figures Table: Key Figures By Business Line Table: Key Figures Over Five Years, Fresh Dairy Products (EURmn) Metro – CEE Case Study Table: Metro’s Presence In CEE Table: Development Of Group Sales And Divisional Sales As Well As Regional Sales Company Analysis Sedmoi Kontinent Pyaterochka NV Wimm-Bill-Dann (WBD) 8 Baltika Brewery SUN Interbrew Kraft Foods Paterson BMI Forecast Modelling How We Generate Our Industry Forecasts Retail Industry Sources |
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Competitive Landscape for Europe Food & Drink Reports: Sample of
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* Adris Group (TDR) * Agrokor Group * Ahold * Aldi * Asda * Alpha-Beta * Vassilopoulos SA * Arteska International Company * Athenian Brewery SA * Auchan * Baltic Beverages Holding * Billa * Brau Union * Bulgartabac Holding * British American Tobacco * Carrefour * CBA Kereskedelmi * Coca-Cola * Cadbury Schweppes * Carlsberg * Coop Jednota Slovenska * Dairy Crest Group * Danone * Diageo Plc * Delta Holdings * Droga Kolinska * Galakton * Fage Dairy Industry * InBev * PepsiCo |
* Fozzy Group * Heineken * Hochland Polska * Konzum * Kraft Foods * LVMH Group * Magnit * Mega Image * Mercator * Metro Group * Nestlé * Pernod Ricard * Plzensky Prazdroj * Podravka * Pyaterochka * Quadrant Amroq Beverages SA (QAB) *Sed’moi Kontinent *Tutunul Romanesc (SNTR) *Star Foods SA acquired by PepsiCo Foods * Rewe Group * RHM * S.A.Damm * Sainsbury's * Scottish & Newcastle plc * Starbucks * Tchibo Holding * Sun Interbrew * Tesco * Tobacna Ljubljana * Wimm-Bill-Dann (WBD) |
[TOP]
BMI's European Food Reports are based on an extensive network of multilateral organisations, government departments, food industry associations, chambers of commerce and company reports. Information sources include:
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