Abstract
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
Estonia Experiences a Peak in Economic Activity
Consumer confidence in Estonia is strong due to low unemployment levels and
the favourable general economic situation. Low interest rates have facilitated
growth in domestic demand based on bank loans in recent years. Rapid income
growth resulted in growing demand for alcoholic drinks. 2006 was a year of
record growth rates for retailers in Estonia as well as the whole economy.
Stable economic growth will continue in 2007, according to leading Estonian
economic analysts, although the pace of growth will slow down slightly.
Alcohol Sales Regulations Becoming Stricter
From August 2007, off-trade sales of alcoholic beverages were banned between
20.00hrs and 08.00hrs in Tallinn, the country' s capital. The existence and
scope of such regulations vary in the other Estonian cities, but they were
becoming more numerous and stricter in 2007. This has boosted multipack sales
in beer, RTDs and cider. Specialist stores are negatively influenced by these
bans because they used to make most of their sales at night when the
supermarkets are closed.
Competition Is Intense in the Alcoholic Drinks Market
The competition in the Estonian market for alcoholic drinks has been very
strong in recent years. There is a very wide choice available in the market
and consumers pay more attention to the brands that are aggressively
advertised. Promotional activities, such as offering free samples and price
concessions, became more popular over the review period and are expected to
gain more importance in the forecast period. According to company sources,
Estonians prefer domestic brands and it is hard for newcomers to enter the
market. To gain share in Estonia, companies entering the market advertise
aggressively or supply low-priced products to the price-sensitive part of the
population.
Supermarkets Continued to Increase Its Market Share
The changes in distribution patterns in Estonia in the 2000-2007 period had an
increasing effect on alcoholic drinks sales in Estonia. The most important
change was an increase in the share held by supermarkets, while the shares
held by independent food stores declined. The number of supermarkets increased
considerably in 2006-2007. Supermarket outlets tend to offer a wide variety of
alcoholic drinks and are convenient because people can buy all the products
they want in one place. Estonians also like to buy large quantities in one go
and the value economy packs of beer and cider offered in supermarkets are
proving extremely popular in this regard.
Optimistic Economic Forecasts
According to economic analysts in Estonia, economic growth reached its peak in
2006 and the pace of growth will probably slow down during the coming years.
According to economic forecasts by the Bank of Estonia (Eesti Pank), GDP
growth in 2007 will be about 8.4%, falling to 6.5% in 2008, and a still strong
5.6% in 2009. Estonia' s economic growth is one of the strongest in the EU. In
the long run, Estonia' s living standards will converge with those of the
European leading industrialised countries. Strong economic growth will also
have a positive effect on the local alcoholic drinks market.
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