1. The global beer industry is an attractive industry where most large brewing companies produce different type and taste of beers to suit different class of people all around the world. Many countries were having or in the midst to negotiate Free Trade Agreement around the world, it makes the cost of import beer cheaper and affordable. In the year 2010 Thailand has abolishes import tariffs on beer, hence it make beer brand like Carlsberg, Budweiser and Tsingtao more cheaper to their rival Chang Beer and Singha Beer. (Brewers fear end to beer import tax – Published 26/05/2009)
Most international brewing companies are facing huge challenges from some countries that are imposing higher tax and stricter rule to deter beer consumption. However on the contradictory side, the beer industry is an extremely huge industry that has an impact on the country, contributing mainly to the economy and the society. In the US region, nearly 1.7 million people are employing related to beer industry. The beer industry also generates 190 billion US dollars annually into the US economy. (Beer Institute, Beer Tax Fact, 2008)
1.2Many brewing companies are started to export their beer brand globally, as they understand that their local market has reach saturated point. Over the year, joint venturing, expanding oversea brewing plant and cooperation with other brewing company have been their strategic movement to extend their market share globally. Heineken have successfully establishing joint venture in various countries include Australia, Germany, Indian and more to introduce their beer. (Lion Nathan and Heineken in joint venture, 18/5/2004) Another key factor of the activeness of the beer industry is the profit margin. Base one the calculation of one keg of beer will produce a net profit of $340 then how about of 1,000 kegs sold, it will produce $340,000 (Draft Beer Profitability)
1.3The key success factors for global beer industry is to continue identify new markets and create awareness for beer drinking by associate to popular sports. For Modelo under the management of Carlos Fernandez in the year 1997, it took him 12 years to make Corona Beer to become top five beer companies in the world, selling across 150 countries. (Thompson/Strickland/Gamble, Crafting and Executing Strategy, 17th Edition) Heineken has position itself to be probably the best beer in the world by having joint venture among other countries to expand it beer world wide.
With the increase publicity on popular sport associate with beer (See exhibit 1 for youtube video on sport associate with beer), the world Cup 2010 had drawn nearly 715 million viewer (Fifa World Cup, Wikipedia) and it host country South Africa has it own traditional of watching football, drinking beer. Quoted by Istair Hewitt, a manger that own a bar locate at Johannesburg “Beer sale will soar during the month long football and an additional of 100,000 hectoliters, which is about 20 million beers, in a 500 ml glass will be projected. (Darren Talyor, 2010)
Further scientific have proven that beer belly is not cause by excessive beer drinking instead of eating too much food. (Alcohol problems and solution, fact and fiction) Socially and in some tacit culture in certain countries, beer drinking has become a social, season and party events beverage. And with the increase of female consumption of beer, it makes the industry far too tempting to give up.
Notwithstanding to some limitation that beer drinking has it negative impact in the society such like alcohol abuse, drink driving and underage drinking, certain countries has been using the revenue generate from brewing companies to create public education and awareness on responsibly and social drinking.(Anti-drink driving)
|Exhibit 1 - Beer ads associate with Sport | | | | |...