A comparison of the beer industry free essay sample

This study aimed to supply in depth position of a state and market comparing which focuses on the beer industry in both Italy and Canada. It provides the reply to the chief inquiry which market we are traveling to put in and why we should put in that state. This study besides focuses on the chief similarities and differences between both markets of Italy and Canada. By comparing those differences and similaritiesiwe will eventually acquire to the decision that which state we are traveling to put iniand explicate the ground why we want to put in that state. There are several factors which we are traveling to utilize to compare these two countriesithey are as follows: The cultural differences by Hofstede s cultural dimensions. Beer industry conditions in both states. Macro-economy state of affairss in both states. Alcohol Taxes and Duties Legislative Framework. Market size of legal imbibing and buying population. Major participants in beer industry of both states. Introduction Beer is one of the most used drinks in the universe next to coffee and tea. The beer industry hence as we can conceive of is one of the biggest industries in the universe with many rivals inside of the industry. It is non surprising that many different sorts of beer and a assortment of trade names can be found in both Italy and Canadaiand both of the states has a long history of development of brewery industry every bit good. In this articleiwe are traveling to compare both of the states marketsiindustry conditionicultural differencesipolitical background and so forthiall those information will be taken into considerationiand be processed to do the concluding determination on which county environment is more suited and good for us to put into. Some theories are traveling to be applied to analyze the cultural dimensions of both countriesisuch as Hofstede s cultural dimensionsiand SWOT analysisiPorter s Five Forces Model. Methodology In this paper, I will utilize the undermentioned methodological analysis to analysis my paper, they are Hofstede s cultural dimensions and SWOT analysis. I will utilize hoststede s cultural dimensions in the cultural portion, and SWOT in the concluding subdivision of the paper. Hofstede s Cultural Dimensions In the Hofstede s cultural dimension, the dimensions measure the cultural dimensions differences in both Canada and Italy. There are five dimensions in this frameworkinamely the Power Distance Index ( PDI ) ithe Individualism-CollectivismiMasculinity-Femininity and Uncertainty Avoidance. Because Hofstede measures cultural dimensionsitherefore I will utilize the Hofstede s cultural dimensions in the cultural system page of the paper when the cultural facets are discussed. SWOT Analysis The SWOT Analysis is the analysis of StrengthsiWeaknessesiOpportunities and Menaces for both states. The SWOT analysis isA a speedy and brief manner to do an overview of the strength and failing, and on the other manus chances and menaces for both states, in my instance, the beer industry in two different states will be analyzed. The SWOT analysis will look into internal factors within the industry of the state ( Strengths and Weaknesses ) and external factors outside the industry or the state ( Opportunities and Threats ) . This model will assist us to analyse the chief positive and negative sides of both states when comparing the SWOT. And finally this should assist us make up ones mind on which state would be most suited to put in the beer industry. And this model will be used at the terminal of the paperiwhich will give us an conclusive consequences of which state we are traveling to put in. The beer industry of Italy and Canada In this sectionirelevant market conditions that apply to the Italian and Canadian beer sector will be explained. The market can be separated harmonizing to different factors like size and attraction every bit good. If we divide the market harmonizing the different market portions which individual brewery holdsiwe can see that there are several chief participant in the beer industry in both of the states. Italy Italy is celebrated for its winesihoweveriit is non well-known for its ain beer. By and large speakingiItaly does nt devour about every bit much beer as its European Unionropean neighbourihoweverithere is a turning tendency of ingestion for beer in Italyithe beer in Italy is non every bit widespread as in its European Unionropean neighboursimainly because there is a historical penchant for vino in the state. Italian breweries have undergone a Renaissance in recent old ages. In the past few old ages, in factiItaly has started holding beer imbibing and savoring competitions and many related festivals. Normallyithis kind of activity is reserved for wineihoweverinowadays beer is gaining more and more regard from wine-preferred Italiansiand even many immature Italians prefer to back up their state s beer industry instead than the vino industry nowistillithe Italian beer industry has much infinite to turn and be developed. There are some trade names of beer in Italyione of them is the oldest and most recognized trade name of breweries which is Birra Peroniiwhich was established in 1846 and the headquarter of Peroni is in Rome. Peroni s most celebrated merchandise is a Pilsner manner beer. Nastro Azzuroiwhich is besides one of the few Italian beers that marketed all over the worldiNastro Azzuroi which is a instead light manner beer compared to the old oneimany breweries are crafting darkeriheavier beers is by and large deriving involvements from those more old and experient beer drinkers and people likewise. In add-on to those elephantine breweriesithere are many microbreweries in Italyiand they play a of import function and have a great part of the market every bit good. A microbrewery which peculiarly additions attending from immature Italians is called Birrificio Baladin ithe brewery attracted those immature coevals through patronizing international music festivals and passionate advertizements. Canada TraditionallyiCanadian biggest brewing companies were Labatt s and Molson. In 1995iLabatt s was purchased by an Belgian company which is called Interbrew and it is now a portion of Brazilian-Belgian. AnhEuropean Unionser-Busch InBevithe universe s biggest brewing company and Molsonithe other biggest brewing company in Canadaiwhich was merged with US company Coors in 2005 and created a new company called Molson Coorsiwhich is the universe s 5th biggest brewing company now. In 2006iwith the purchase of Sleeman Breweriesithe biggest staying Canadian brewery was purchased by the Japanese company which owned Sapporo BreweryiThe Canadian beer production market is chiefly under control of many foreign multinationals. Approximately 90 per centum of beer gross revenues under the license was produced in Canada, nevertheless from a non-domestic brewing corporations by the terminal of 2006. U.S beers companies under the license dominated much of the Canadian market. For instanceiin Canada by Labatt s and Coors LightMolson, Budweiser is brewed under license. In Canada, the domestic beer market is about dominated by many foreign companies as we mentioned before, these companies are LabattiMolson and Sleemanithey are all foreign owned companies. The biggest Canadian owned breweriMoosehead breweriesionly controls about 5.5 per centum of the Canadian market. Country comparing Macro-economic indexs Economy Canada population 33,487,208 ( July 2009 est. ) . Italy population 58,126,212 ( July 2009 est. ) . Economic freedom Canada universe rank 6. Economic freedom Italy universe rank 87. Finance Fiscal freedom for Canada: 80.0. Fiscal freedom in Italy 60.0 Canada investing freedom 75.0. Italy investing freedom 75.0. Canada Economy -GDP ( Buying Power Parity ) $ 1.335 trillion ( 2010 est. ) . World ranking: 15. $ 1.297 trillion ( 2009 est. ) $ 1.33 trillion ( 2008 est. ) -GDP Per capita ( PPP ) $ 39,600 ( 2010 est. ) . World ranking: 22 $ 38,700 ( 2009 est. ) $ 40,000 ( 2008 est. ) -Inflation rate ( consumer monetary values ) 1.6 per centum ( 2010 est. ) . World ranking: 41 0.3 per centum ( 2009 est. ) Italy Economy -GDP ( PPP ) $ 1.782 trillion ( 2010 est. ) . World ranking: 11 $ 1.763 trillion ( 2009 est. ) $ 1.857 trillion ( 2008 est. ) -GDP per capita ( PPP ) $ 30,700 ( 2010 est. ) . World ranking: 43 $ 30,300 ( 2009 est. ) $ 31,900 ( 2008 est. ) -Inflation rate ( consumer monetary values ) 1.4 per centum ( 2010 est. ) . World ranking: 32 0.8 per centum ( 2009 est. ) Historical developments Italy Beer is known and drank in Italy really long clip agoiItalians brewed and consumed the blond drink. It said that Roman Emperor Agricola was a fan of beer when he was the governor of Britanniaiand in 83 AD Roman Emperor Agricola raised to the imperial throne and came back to Italyihe took three maestro brewersA with him from Glevum of which the antediluvian name Gloucester and opened the first existent saloon in Italy. Nowadays beer is particularly loved by immature people in Italyiwhich has been seen as an informal drinkicompared to the vino which is alway used in much more formal topographic points. Aperitif and vino savoring have now gained back to wine many insouciant drinkersihoweveriuntil a few old ages agoiyoung Italians really imbibe more beer than vino. Pub-styled bars are still really popular in Italy and they have spread the love for the more alien trade names of beer: many of them serve JapaneseiGermaniAustralian and East European Unionropean beers along with the more known 1s brewed in the UK and Belgium. At least one bottle of Birra cinese ( Chinese beer ) is served on every tabular array of every Chinese eating house. Canada In the 17th centuryiEuropean Unionropean colonists foremost introduced beer to Canadaias Canada has an optimum temperture for bring forthing and hive awaying beer before infrigidation was introduced. Jean Talon built the first commercial brewery in Quebec City. In 1668, more than a century subsequently when beer foremost came to Canada, a figure of commercial beer makers came outiincluding some that subsequently became the samples of the Canadian beer industry: John Molson founded a brewery in Montreal in 1786iAlexander Keith inHalifax in 1820iThomas Carling in London in 1840iJohn Kinder Labatt in 1847ialso in LondoniSusannah Oland in Halifax in 1867iand European Uniongene OKeefe in Toronto in 1891. Prohibition period in Canada was non permanent every bit long as the period in the U.S, and it was mostly effectual by the center of 1920s ( nevertheless in Prince Edward Islandiit ran from 1901 to 1948 ) . Nonethelessiit still had a same consequence of maintaining really few brewing company and beer makers in Canadaiby the late 20th century, it was merely that there has been a resurgence and microbreweries have started. However in some states, brew saloons are still illegal. Cultural system Hofstede s Cultural Dimensions of Italy and Canada Power Distance Individuality Maleness Uncertainty Avoidance Italy Higher More corporate More masculine Strong Canada Lower More individualistic More feminine Weak Power distance Canada is lower on the Hofstede s power distance index than ItalyiItaly is in the center on the index by and large. Italian seems to anticipate differences in power between people. Canadian Power Distance ( PDI ) is comparatively low compared to Italyithe index of PD is 39 for Canadaiis still lower compared to a universe norm. Individuality The less corporate nature of Canada compared to Italy can be seen in many ways. In Canada, it is common for adult adolescents to populate with their parents for old ages in Italy and there are many household owned concern in Italy, even some really celebrated trade names. In Italy, concern is sooner dealt with people which you are familiar with. Unfamiliar invitees will non be invited into an Italian place. Canada has Individualism as the highest ranking which is 80iand this indicates that the Canadian society with a more individualistic attitude and comparatively loose bonds with households and others. Maleness As we can see in the dimension index, Italy is a really masculine society and ranks somewhat higher compared to Canada. It said that even presents there are still many Italian work forces treat adult females with machismo. Even though there are more and more adult females in the working population nowadaysihowever, their Numberss are still little and few are in upper places due to the glass ceiling. The traditional Italian family are adult females, in most Italian households, adult females play the function who cook, clean the house and take attention of kids. Italians place a really of import attending on material ownerships. As we all know that looking good is really of import for Italians, and like many feminine cultureiItalians know how to bask their life. Italians is the sort of people who work in order to populate instead than some states people populating to work, aspiration and difficult working are non prevailing phenomenons in Italian civilization. Therefore I assume that beer as a informal beverageiit is more popular under this sort of cultural background instead than more formal cultural background states. Uncertainty Avoidance Italy avoids unsteadily more strongly than Canada. Generally talking Italians prefer to make concern with people they are familiar with. In additioniItalians prefer to hold some personal communicating with the people who they are traveling to make concern with before they approach to the serious concern speaking. Political/Government System Beer or we can state malt spirits in legal termiis defined as all fermented spirits brewed in whole or in portion from malt for the intents of the Excise Actigrain or any cloying affair without any procedure of distillment ihowever this definition does non include vino. Italian Alcohol Taxes and Duties Alcohol Duty Beer ( 5 per centum ABV or 12Es Plato ) A 0.12? per pint Wine ( bottle 11.5 per centum ABV ) 0.00? per 75 chlorine As we can see in the tabular array of different rates of responsibility applies to beer in Italyiwhich contains following degree of responsibility. Italy is a member of the European Unionropean Union nowitherefore it portions the Common External Tariff government of European Unionropean Union. European Union responsibilities are charged by the Italian Customs Agency on the CIF ( costiinsurance and cargo ) value of the merchandise which imported into Italy. The Alcohol Act ( 2001 ) baned Television and wireless programmes advertisement of alcoholic merchandises between 4 oclock autopsy and 9 oclock autopsy and prohibited intoxicant advertizements from demoing on the Television within 15 proceedingss after or before any kids s programmes. This Act besides requires a self-regulatory codification to be provided jointly by advertisement bureaus, advertizers and media companies to administrate intoxicant advertisement. For the legal imbibing ageithere is no minimal age of legal imbibing. And the legal buying age of intoxicant is 16 and 18. However, South Tyrol prohibited both purchase and functioning for adolescents which under the age of 18. Milan has enforced a prohibition on those under 16 old ages old buying intoxicant. Heavy mulcts are given to proprieters and parents if a dealing is completed to those adolescents who is out to buy. Canadian Alcohol Taxes and Duties Legislative Framework Beer Duty Up to 1.2 per centum intoxicant $ 2.591/hectolitre 1.2 per centum to 2.5 per centum intoxicant $ 13.990/hectolitre Over 2.5 per centum intoxicant $ 27.985/hectolitre As we can see in the tabular array of different rates of responsibility applies to beeriwhich contains following degree of responsibility: over than 2.5 percent absolute ethyl intoxicant as the per centum of the entire weight ; over than 1.2 per centum nevertheless under 2.5 per centum absolute ethyl intoxicant as the per centum of the entire weight ; and less than 1.2 percent absolute ethyl intoxicant as the per centum of the entire weightiand for all beer incorporating more than 2.5 percent absolute ethyl intoxicant as the per centum of the entire weightithe rate of excise responsibility is presently 27.985 dollar per hectoliter. The excise responsibilities are non imposed on beer which is provided by a individual for personal or household usage or to be given off without charge and is non for sale commercially. Canadian authorities showed how extremely they value beer production and its breweries by take downing the revenue enhancements exercised on beer production. This is a benefit to the industry. As one of the leaders of the whole economic system of Canadaithe beer sector is likely to keep these revenue enhancement benefits and other benefits might be offered every bit good to the beer sector to develop the Canadian beer industry. The legal imbibing and buying age in Canada are both 19. HoweveriIn some countries such as OntarioiSaskatchewaniBritish ColumbiaiNewfoundland and LabradoriNova ScotiaiNorthwest TerritoriesiYukoniand Nunavutiunder age imbibing which is supervised by parents is permittedihowever with some restrictionsi in one individual s ain house in these states which are New Brunswick and Ontario and at place in the states of Prince Edward IslandiBritish Columbia and Saskatchewan. InBritish Columbiaionly those kids under the parental supervisioninot any other bush leagues such like guestsiare allowed under age imbibing. Consumption of intoxicant in another person s place is capable to other Torahs. Major participants The brewing industry had become highly concentrated in Canadaiit had been dominated by merely three major companies at the terminal 1970sithese companies are MolsoniLabattiand Carling-OKeefe. Canadian biggest brewing companies were Labatt s and Molson as we mentioned in the old overview of industry status of both states. In 1995iLabatt s was purchased by an Belgian company which is called Interbrew which is now portion of Brazilian-Belgian AnhEuropean Unionser-Busch InBev ithe universe s biggest brewing company and Molson ithe other biggest beer companyiwhich was merged with US company Coors in 2005 and created a new company called Molson Coorsiand it is the universe s 5th biggest brewing company now. In 2006ithe biggest staying Canadian brewery was purchased by a Nipponese owned company called Sapporo Brewery iuntil so, Canadian beer production has been about controlled by the foreign multinationals. Until the terminal of 2006iapproximatly 90 per centum of beer gross revenues was brewed domestically under license from the non-domestic beer corporations. American beers giants dominated much of the market, and for instanceiBudweiser is produced under the license in Canada by companies Labatt s and Coors Light. The Canadian beer market is dominated by LabattiMolson and Sleeman these three companiesithey are all foreign owned companies. The biggest Canadian owned breweriMoosehead breweriesionly controls little per centum of the Canadian market. Italy hosts a few breweriesiwith the biggest owned by the best known Italian and foreign trade names. Peroni s brewery produces the best known Italian beer: la Peroni . Peroni besides produces the premium beer Mastro Azzurro and the trade names Wuhreriand lesser known Raffo. Heineken Italy brews it s celebrated Heinekenibut has besides acquired the trade names MorettiiIchnusaiBirra Messina and Dreher. Carslberg owns a few brewerys in Northern and Central Italy. In Northern ItalyiForst brews its ain branded beer every bit good as the celebrated Menabrea. In Friuli Venezia Giulia the latest trade name of Italian beer Birra Castelloihas been active since 1997. Along with these large playersithere are tonss of microbreweries little graduated table breweries that produce little measures of beerithey besides have premium quality. Major determination of comparing and recommendations Making a determination in which state to put is non so easyibecause of all those different discrepancies in both of the countiesisome of the discrepancies are strength for Canadaihoweverisome of them are favourable for Italy. In the first placeithe revenue enhancement rates between Canada and Italy differ. In Canada the rates are comparatively lower than in Italy due to the fact that the revenue enhancement degree is comparatively high in the European Unionropean context. In add-on to thisithe Canadian authorities reduced revenue enhancements even more to profit Canadian beer makers. Secondlyiwhen a expression is taken at macroeconomic indexs like GDP per capita we see that Canada is a bit more favourable. Howeverisince this differences are so smalliboth of the states that we have chosen are developed countriesiand GDP per capita which above certain degree has a comparatively weak influence on the ingestion of beer. Thereforeithis factor is non likely to hold a important influences on the desicion of investing in the states. Thirdlyithe population above legal imbibing age in the markets has been calculated get downing from the age at which intoxicant ingestion is allowed. This would intend that we start numbering the population get downing from 18 old ages old in Italy ( some country start from 16 old ages old ) and 19 old ages old in Canada. We find that the comparative sum of people able to buy and devour intoxicant in Italy is larger than in Canadaibecause the whole population is larger in Italy than in Canadaiand the population of legal imbibing age are besides higher in Italy than in Canadaithereforeithe possible market in Italy are larger than in Canada.A A A Lastlyiwhen comparing markets harmonizing to its participants and their market portions we find that Canada has a more concentrated market with high market portion big participants and many little participants. Italy on the other manus has two old participants with a high portion and one smaller participant while the remainder of the market consists of truly little participants. It would hence be an advantage to put in the Italian market ; seeking to derive and increase a market portion because of the fact that there are many foreign participants already play really of import functions in the Canadian marketiMolson Coors Brewing company and AnhEuropean Unionser-Busch InBev have a market portion of 42,70 and 42,20 per centum severally. Third topographic point is hold by Moosehead Brewing company with a portion of 5,90 per centum. These three chief participants hold 90,8 per centum of the market in entire by volume. Taking all those facts into consideration, I would state that Italy would be the state that we are traveling to put in. As we explained aboveiwe analysed both states SWOT, for Italy, the strength is market size, the failing is comparatively higher revenue enhancement rate on intoxicant, and the chances is that there are merely two large old participants and some utmost little playersigaining or increasing a portion is comparatively easyiand the market of Italy are more potentialibecause Italy still on the turning stage of beer industry. Moreoverisince the age allowed to imbibe in Italy get downing from the age of 18 and in some countries are even lower to 16iand with more population in Italyitherefore the market is bigger in Italy than in Canada. In additioninowadays the Italian authorities extremely values the Italian beer industry due to the impact on its economic system and therefore revenue enhancements are acquiring lower and lower. And the menaces of Italy is that new public po licy may harm the beer industry, such as the advertisement policy we mentioned before which bans the ads of intoxicant in specific period of clip on Television.