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Market Research Report

Alcoholic Drinks in Israel

Published by	Euromonitor International
Published	January, 2010	Product code	115668
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Price	US $ 1900 PDF by E-mail (Single User License)

Introduction
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Alcoholic Drinks in Israel published by Euromonitor International in January, 2010. This report price starts from US $ 1900.

Introduction

Abstract

Euromonitor International' s Alcoholic Drinks in Israel market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.

Why buy this report

Get insight into trends in market performance
Pinpoint growth sectors and identify factors driving change
Identify market and brand leaders and understand the competitive environment

Product coverage

Beer; Cider/Perry; RTDs/High-Strength Premixes; Spirits; Wine

Executive summary

Financial recession along with intensifying parallel imports reduces growth both in value and volume terms

Both on trade and off trade channels witnessed a positive but declining growth rate in value terms during 2009 in comparison to the review period. The main reason for the decline in growth in 2009 was due to the financial recession along with the harsh competition between exclusive importers and parallel importers. Parallel importers managed to reduce the price of certain highly-consumed brands in alcoholic drinks by almost 10%, making it even more difficult for players in the category to survive during the recession. In order to attract consumers both on trade and off trade, companies resorted to lowering their prices by conducting sales, special offers, discounts (buy one get one free) and happy hours. Within on trade channels it became evident that consumers were reducing their average spending by either purchasing cheaper options or by drinking less.

Parallel imports are a hotly debated topic in 2009, as the recent proposed taxation reform reopens the issue

Parallel imports (imported non counterfeit products from another country without the permission of the international manufacturer through a third party), within the general market was a hotly debated subject in Israel in 2009, as it had a significant impact on all participants within the category from the consumer to the retailer to the importer. The fact that parallel imports are legal in alcoholic drinks in Israel and have both positive and negative impacts on the different participants makes this a difficult issue to resolve, and reach a satisfactory conclusion for all parties involved. The proposed taxation reform, a standard measured tax (NIS45 per litre) according to the percentage of alcohol, is expected to result in a rise in the price of cheap spirits and local production and reduce the price of super premium and premium spirits. This reform will have heavy implications for all players in alcoholic drinks; local importers and manufacturers, parallel importers, duty free sales and even on the state itself. This event reopened the subject of parallel imports and its implications for debate.

Pernod Ricard' s purchase of Absolut changes the competitive landscape within spirits

The competitive landscape within alcoholic drinks in Israel is extremely concentrated with a few leading players that tend to dominate sales. The spirits competitive landscape was strongly impacted during late 2008, as international manufacturer Pernod Ricard Groupe decided to assemble all its brands under one Israeli local distributor; Hacarem Spirits Ltd. Until this move, this international company' s products were distributed by three leading players in Israel; M Ackerman Ltd, Tempo Beer Breweries Ltd and Hacarem. The decision to concentrate all products under one exclusive local distributor changed the competitive environment within spirits, as Hacarem currently holds 15 new brands.

On trade sales suffer in 2009, especially within spirits, wine and spirit-based RTDs

As on trade channels tend to charge a much higher price than off trade channels, Israeli consumers took action and became wiser in their product choice and decisions. Within spirits it became evident that while Israelis might not be going out less, they were reducing their average spending within on trade channels. Consumers who were previously used to drinking for instance four shots of vodka, in 2009 were making sure that they were consuming less throughout the evening. Wine sales within on trade channels dropped as restaurants, pubs and bars tend to charge extremely high prices, while good quality and cheaper off trade products are available. The fact that more Israeli' s tend to drink wine at home reduced consumption in on trade channels.

Alcoholic drinks is expected to recover in the long term

In the short term, alcoholic drinks is predicted to replicate the trends as witnessed in 2009, as price reductions and heavy sales are still expected to be pushed, although these reductions will not be able to stabilise the category in the early part of the forecast period. In the long run, alcoholic drinks are expected to make a recovery, which in turn will cause positive value growth, as prices will begin to rise again. The rise in prices will also be supported by consumers as they will have more disposable income to hand, will be more likely to return to their regular drinking habits and enjoy purchasing products which are trend driven, while companies will also begin to invest more in their brands and more premium and niche products. Boutique alcohol sales are expected to grow as a result of the improving financial situation.