Philippine Beer Industry
I. TITLE The Profitability of Beer Industry in the Philippines
II. Introduction Oligopoly refers to the market situation that would lie between pure competition and monopoly. It is characterized by small group of firms that control the market for a certain product or service. This gives these businesses huge influence over price and other aspects of the market. This research focuses on the study about the two of the largest beer manufacturers in the Philippines ─San Miguel Brewery and Asia Brewery─ that participate in an oligopoly within the beer industry. Beer is the most consumed alcoholic beverage in the Philippines and amounts for a 70% share of the domestic alcoholic drinks market in terms of volume. The beer business in the Philippines is seen to grow at an average of 3 percent per year within the next five years, reflecting a marked slowdown from 5.04 percent in the previous five. This translates to half a million hecto liters increase in volume sold from 16.5 million in 2010. A study conducted by global beverage research firm Canadean Limited, used by San Miguel Brewery, Inc. in its recent bond offering showed in the past five years per capita sales of beer in the Philippines is 17 liters from 15 liters five years ago. That is why the Philippines became the third largest beer market in Southeast Asia, comprised of Vietnam, Thailand, the Philippines, Indonesia, Malaysia, and Singapore, and is the sixth largest beer market by sales volume in greater Asia.
Although beer is at the peak of its growth, there is still a bright outlook for the category as per capita consumption in the Philippines is still relatively low in comparison to other Asian countries. Players are anticipated to introduce new consumption occasions over the forecast period by participating in festivals across the country and organizing summer parties to further stimulate demand. Collaborating with on-trade establishments is also foreseen, offering
II. Introduction Oligopoly refers to the market situation that would lie between pure competition and monopoly. It is characterized by small group of firms that control the market for a certain product or service. This gives these businesses huge influence over price and other aspects of the market. This research focuses on the study about the two of the largest beer manufacturers in the Philippines ─San Miguel Brewery and Asia Brewery─ that participate in an oligopoly within the beer industry. Beer is the most consumed alcoholic beverage in the Philippines and amounts for a 70% share of the domestic alcoholic drinks market in terms of volume. The beer business in the Philippines is seen to grow at an average of 3 percent per year within the next five years, reflecting a marked slowdown from 5.04 percent in the previous five. This translates to half a million hecto liters increase in volume sold from 16.5 million in 2010. A study conducted by global beverage research firm Canadean Limited, used by San Miguel Brewery, Inc. in its recent bond offering showed in the past five years per capita sales of beer in the Philippines is 17 liters from 15 liters five years ago. That is why the Philippines became the third largest beer market in Southeast Asia, comprised of Vietnam, Thailand, the Philippines, Indonesia, Malaysia, and Singapore, and is the sixth largest beer market by sales volume in greater Asia.
Although beer is at the peak of its growth, there is still a bright outlook for the category as per capita consumption in the Philippines is still relatively low in comparison to other Asian countries. Players are anticipated to introduce new consumption occasions over the forecast period by participating in festivals across the country and organizing summer parties to further stimulate demand. Collaborating with on-trade establishments is also foreseen, offering
References: McConnell, Campbell R., Brue Stanley L., and Flynn Sean M. (2009). Economics: Principles, Problems, and Policies, 18th Edition. Boston: McGraw-Hill (ISBN-13: 978-0-07-127060-1) McConnell, Campbell R., and Brue Stanley L. (2005). Economics: Principles, Problems, and Policies, 16th Edition. Boston: McGraw-Hill (ISBN 0-07-281935-9)