A comparison of the beer industry

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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 similaritiesi??we will eventually acquire to the decision that which state we are traveling to put ini??and 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 countriesi??they 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 Canadai??and both of the states has a long history of development of brewery industry every bit good.

In this articlei??we are traveling to compare both of the states ‘ marketsi??industry conditioni??cultural differencesi??political background and so forthi??all those information will be taken into considerationi??and 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 countriesi??such as Hofstede ‘s cultural dimensionsi??and SWOT analysisi??Porter ‘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 frameworki??namely the Power Distance Index ( PDI ) i??the Individualism-Collectivismi??Masculinity-Femininity and Uncertainty Avoidance. Because Hofstede measures cultural dimensionsi??therefore 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 Strengthsi??Weaknessesi??Opportunities 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 one’s 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 paperi??which will give us an conclusive consequences of which state we are traveling to put in.

The beer industry of Italy and Canada

In this sectioni??relevant 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 holdsi??we can see that there are several chief participant in the beer industry in both of the states.

Italy

Italy is celebrated for its winesi??howeveri??it is non well-known for its ain beer. By and large speakingi??Italy does n’t devour about every bit much beer as its European Unionropean neighbouri??howeveri??there is a turning tendency of ingestion for beer in Italyi??the beer in Italy is non every bit widespread as in its European Unionropean neighboursi??mainly 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 facti??Italy has started holding beer imbibing and savoring competitions and many related festivals. Normallyi??this kind of activity is reserved for winei??howeveri??nowadays beer is gaining more and more regard from wine-preferred Italiansi??and even many immature Italians prefer to back up their state ‘s beer industry instead than the vino industry nowi??stilli??the Italian beer industry has much infinite to turn and be developed.

There are some trade names of beer in Italyi??one of them is the oldest and most recognized trade name of breweries which is Birra Peronii??which was established in 1846 and the headquarter of Peroni is in Rome. Peroni ‘s most celebrated merchandise is a Pilsner manner beer. Nastro Azzuroi??which is besides one of the few Italian beers that marketed all over the worldi??Nastro Azzuroi?? which is a instead light manner beer compared to the old onei??many breweries are crafting darkeri??heavier beers is by and large deriving involvements from those more old and experient beer drinkers and people likewise. In add-on to those elephantine breweriesi??there are many microbreweries in Italyi??and 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 ” i??the brewery attracted those immature coevals through patronizing international music festivals and passionate advertizements.

Canada

Traditionallyi??Canadian biggest brewing companies were Labatt ‘s and Molson. In 1995i??Labatt ‘s was purchased by an Belgian company which is called Interbrew and it is now a portion of Brazilian-Belgian. AnhEuropean Unionser-Busch InBevi??the universe ‘s biggest brewing company and Molsoni??the other biggest brewing company in Canadai??which was merged with US company Coors in 2005 and created a new company called Molson Coorsi??which is the universe ‘s 5th biggest brewing company now.

In 2006i??with the purchase of Sleeman Breweriesi??the biggest staying Canadian brewery was purchased by the Japanese company which owned Sapporo Breweryi??The 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 instancei??in 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 Labatti??Molson and Sleemani??they are all foreign owned companies. The biggest Canadian owned breweri??Moosehead breweriesi??only 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 agoi??Italians brewed and consumed the blond drink. It said that Roman Emperor Agricola was a fan of beer when he was the governor of Britanniai??and in 83 AD Roman Emperor Agricola raised to the imperial throne and came back to Italyi??he 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 Italyi??which has been seen as an informal drinki??compared 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 drinkersi??howeveri??until a few old ages agoi??young 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 Japanesei??Germani??Australian 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 centuryi??European Unionropean colonists foremost introduced beer to Canadai??as 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 outi??including some that subsequently became the samples of the Canadian beer industry: John Molson founded a brewery in Montreal in 1786i??Alexander Keith inHalifax in 1820i??Thomas Carling in London in 1840i??John Kinder Labatt in 1847i??also in Londoni??Susannah Oland in Halifax in 1867i??and European Uniongene O’Keefe 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 Islandi??it ran from 1901 to 1948 ) . Nonethelessi??it still had a same consequence of maintaining really few brewing company and beer makers in Canadai??by 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 Italyi??Italy 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 Italyi??the index of PD is 39 for Canadai??is 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 80i??and 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 nowadaysi??however, 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 culturei??Italians 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 beveragei??it 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 additioni??Italians 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 termi??is defined as “ all fermented spirits brewed in whole or in portion from malt for the intents of the Excise Acti??grain or any cloying affair without any procedure of distillment ” i??however 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 Italyi??which contains following degree of responsibility. Italy is a member of the European Unionropean Union nowi??therefore it portions the Common External Tariff government of European Unionropean Union. European Union responsibilities are charged by the Italian Customs Agency on the CIF ( costi??insurance 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 o’clock autopsy and 9 o’clock 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 agei??there 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 beeri??which contains following degree of responsibility:

  1. over than 2.5 percent absolute ethyl intoxicant as the per centum of the entire weight ;
  2. over than 1.2 per centum nevertheless under 2.5 per centum absolute ethyl intoxicant as the per centum of the entire weight ; and
  3. less than 1.2 percent absolute ethyl intoxicant as the per centum of the entire weighti??and for all beer incorporating more than 2.5 percent absolute ethyl intoxicant as the per centum of the entire weighti??the 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 Canadai??the 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. Howeveri??In some countries such as Ontarioi??Saskatchewani??British Columbiai??Newfoundland and Labradori??Nova Scotiai??Northwest Territoriesi??Yukoni??and Nunavuti??under age imbibing which is supervised by parents is permittedi??however 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 Islandi??British Columbia and Saskatchewan. InBritish Columbiai??only those kids under the parental supervisioni??not any other bush leagues such like guestsi??are 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 Canadai??it had been dominated by merely three major companies at the terminal 1970si??these companies are Molsoni??Labatti??and Carling-O’Keefe. Canadian biggest brewing companies were Labatt ‘s and Molson as we mentioned in the old overview of industry status of both states. In 1995i??Labatt ‘s was purchased by an Belgian company which is called Interbrew which is now portion of Brazilian-Belgian “ AnhEuropean Unionser-Busch InBev ” i??the universe ‘s biggest brewing company and “ Molson ” i??the other biggest beer companyi??which was merged with US company Coors in 2005 and created a new company called Molson Coorsi??and it is the universe ‘s 5th biggest brewing company now. In 2006i??the biggest staying Canadian brewery was purchased by a Nipponese owned company called “ Sapporo Brewery ” i??until so, Canadian beer production has been about controlled by the foreign multinationals.

Until the terminal of 2006i??approximatly 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 instancei??Budweiser is produced under the license in Canada by companies Labatt ‘s and Coors Light. The Canadian beer market is dominated by Labatti??Molson and Sleeman these three companiesi??they are all foreign owned companies. The biggest Canadian owned breweri??Moosehead breweriesi??only controls little per centum of the Canadian market.

Italy hosts a few breweriesi??with 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 Wuhreri??and lesser known Raffo. Heineken Italy brews it ‘s celebrated Heinekeni??but has besides acquired the trade names Morettii??Ichnusai??Birra Messina and Dreher. Carslberg owns a few brewerys in Northern and Central Italy. In Northern Italyi??Forst brews its ain branded beer every bit good as the celebrated Menabrea. In Friuli Venezia Giulia the latest trade name of Italian beer Birra Castelloi??has been active since 1997. Along with these large playersi??there are tonss of microbreweries – little graduated table breweries that produce little measures of beeri??they besides have premium quality.

Major determination of comparing and recommendations

Making a determination in which state to put is non so easyi??because of all those different discrepancies in both of the countiesi??some of the discrepancies are strength for Canadai??howeveri??some of them are favourable for Italy.

In the first placei??the 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 thisi??the Canadian authorities reduced revenue enhancements even more to profit Canadian beer makers.

Secondlyi??when a expression is taken at macroeconomic indexs like GDP per capita we see that Canada is a bit more favourable. Howeveri??since this differences are so smalli??both of the states that we have chosen are developed countriesi??and GDP per capita which above certain degree has a comparatively weak influence on the ingestion of beer. Thereforei??this factor is non likely to hold a important influences on the desicion of investing in the states.

Thirdlyi??the 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 Canadai??because the whole population is larger in Italy than in Canadai??and the population of legal imbibing age are besides higher in Italy than in Canadai??thereforei??the possible market in Italy are larger than in Canada.A A A

Lastlyi??when 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 marketi??Molson 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 abovei??we 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 playersi??gaining or increasing a portion is comparatively easyi??and the market of Italy are more potentiali??because Italy still on the turning stage of beer industry. Moreoveri??since the age allowed to imbibe in Italy get downing from the age of 18 and in some countries are even lower to 16i??and with more population in Italyi??therefore the market is bigger in Italy than in Canada. In additioni??nowadays 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 policy 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.