2012-09-06 08:19:10 - Qatar Food and Drink Report Q1 2012 - a new market research report on companiesandmarkets.com

We continue to retain our bullish outlook for Qatar owing to its enviable hydrocarbon-based economy. We are pencilling in a 28.0% year-on-year (y-o-y) increase in hydrocarbon revenues through FY2011/12 and, while we acknowledge that oil and gas prices are likely to moderate, we nevertheless expect an expansion of production capacity to translate into continued growth in the value of the countr? s exports over the coming years. This surge in hydrocarbon income has been accompanied by an aggressive ramping up of current expenditure. In early September 2011, the government announced a 60% hike in the wages and social benefits it pays to public-sector employees, as well as an increase in state pensions for civilian and military retirees by the same

 

 

proportion. Qata? s biggest weakness continues to be the size of its population† an expected 1.9mn in 2011. Nevertheless, given that this population is high-spending, there are still opportunities for highmargin, ultra-luxury investors. Developing tastes and preferences, combined with high incomes, will continue to provide an ideal platform for food retailing growth. In addition, the country is expecting continued spending as it prepares to host the FIFA World Cup in 2022.

Headline Industry Data

- 2011 food consumption growth = +11.2%; forecast to 2016 = +28.7%.
- 2011 soft drinks value sales = +14.3%; forecast to 2016 = +33.7%.
- 2011 mass grocery retail sales = +7.6%; forecast to 2016 = +31.4%.
- 2011 supermarket sales = +4.2%; forecast to 2016 = +15.7%

Key Industry Trends And Developments

Coca-Cola Makes Major Investment: In December 2011 it was reported Coca-Cola has acquired a 50% stake in Saudi Arabian beverage manufacturer Aujan Industries. The deal is worth US$980mn and will allow Aujan to pursue its international expansion plans for brands including Barbican and Rani, as well as building upon the regional success of its Vimto brand. The deal is expected to be completed during H112, and will help Coca-Cola make headway in one of the few markets in which its rival PepsiCo leads. The deal represents the largest-ever investment by a multinational firm in the Middles Easts fast-moving consumer goods sector.

Casino Pens Franchise Deal: French retailer Casino in December 2011 signed a franchise arrangement with the domestic company Al Meera. Al Meera will open and operate three hypermarkets in Qatar under the Géant and Géant Easy brands, with the first store opening in Oman in the next 12-18 months. Al Meera is already a major player in the domestic market and currently operates 23 supermarkets in Qatar.

Risks To Outlook Oil Price Stability: Despite the political upheaval throughout the region, the main threat for Qatar remains the fluctuations in global oil prices. Despite the governments efforts to diversify its economy away from the energy sector, non-hydrocarbon sector growth will still not be sufficient to sustain the economy should oil prices collapse. Another major risk comes from the social and political upheaval in the region. Should this turmoil be prolonged, it would likely pose downside risks to our growth outlook and could weigh on consumer spending. The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

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