Mild rise in consumption in 2016

The domestic sector of manufacture & wholesale of alcoholic drinks is examined in a recent study of Infobank Hellastat S.A. According to Alexis Nikolaidis, Economic Research & Sectorial Studies Senior Analyst, the total domestic consumption of alcoholic beverages was formed at 337,930 hectoliters in 2016, recording an increase of 2.6%, compared to the year before, after several years of decline (data from the Federation of Hellenic Distillers and Wine and Alcohol Drinks Producers-SEAOP).

The rise during the last year was fueled by imported beverages, the consumption of which rose by 6.5%, at 196,628 hectoliters. By contrast, the consumption of Greek distillates decreased by 2.3%, at 141,303 hectoliters.

The impact of the recession and taxation on the sector is obvious, since, after 2009, total consumption appears to have decreased by approximately 50%. SEAOP estimates that the rate of decline in actual consumption is lower, since a large part of it resulted from the consumers’ shift to illegally traded, untaxed products.

Based on these shifts, in 2016, imported beverages accounted for 58% of the market, versus 61% in 2011. On the contrary, the corresponding participating share held by domestic products boosted from 39% to 42% during the period in question. Therefore, a gradual return is noticed of consumer tastes to domestically produced goods.

The activity of the domestic beverage manufacturing industry showed a rise for a fourth consecutive year in 2016, with total production output rising by 2.7%, to 457,058 hectoliters, under the favorable influence of exports. The climate continued to be favorable for ouzo manufacturers, as they took advantage of foreign demand. In detail, 292,450 hectoliters of ouzo were produced last year; a quantity that has increased slightly since 2015, due to the further boost in exports, whereas the production output of tsipouro boosted by 11.5%, at 29,723 hectoliters.

Finally, the exports of Greek alcoholic beverages rose further by 5.5% to 314,120 hectoliters, fueling thus an increase in the production output. This change was derived from the ouzo industry, the exports of which, showed an increase of 5,405 hectoliters (+2.5%), amounting to 217,743 hectoliters.

According to Mr. Nicolas Gouzelos, CEO of Infobank Hellastat, “Market players have stressed the importance of the de-escalation of taxation, within a stable economic environment, in order to boost the consumption of legitimate products, as well as the government’s revenues. However, no relief actions are expected in the near future, since the abolition of the discount of 50% applied on Special Consumption Tax has already been decided for the Dodecanese islands as of late this year.”

Financial analysis

In the study conducted by IBHS, an analysis takes place of the financial statements of 21 beverage manufacturers. The key conclusions drawn are summarized as follows:

  • In 2016, Turnover showed a significant rise by 23.6% to €61.42m, mostly due to a large company of the sector.
  • Total EBITDA amounted to €16.3, having increased by 64% since 2015, while EBT nearly doubled, at €13.34m.
  • The EBITDA margin and the EBT margin dropped to 9.5% and 3.1%, respectively.
  • Capital leverage increased to 0.74 over 1.
  • Receivables were collected within a period of 5 months, whereas Inventories were held over an equal period of time.

 

Moreover, IBHS proceeded to the analysis of the financial statements of 51 wholesalers. The key conclusions drawn are summarized as follows:

  • In 2016, Sales rose by 10.9% compared to 2015, amounting to €533.36m.
  • Total EBITDA amounted to €30.6m, showing a marginal rise, while EBT increased by 1.7%, at €20.84m.
  • The EBITDA margin and the EBT margin dropped to 4.8% and 2.6%, respectively.
  • Capital leverage increased to 1.9 over 1, remaining at a high level.
  • Receivables were collected within a period of 3 months, with Inventories being held over a period of 2 months.

 

For the full version of the sectoral studies please contact 210 8939017 or email to This email address is being protected from spambots. You need JavaScript enabled to view it. & This email address is being protected from spambots. You need JavaScript enabled to view it..

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