Alcoholic Drinks in The Philippines: Euromonitor International September 2020

Alcoholic Drinks in the
Philippines
Euromonitor International
September 2020
ALCOHOLIC DRINKS IN THE PHILIPPINES Passport i
LIST OF CONTENTS AND TABLES

EXECUTIVE SUMMARY .............................................................................................................. 1
Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-
2024 ............................................................................................................. 2
Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-
2024 ............................................................................................................. 3
Chart 3 Alcoholic Drinks Impact of Soft Drivers on Off-Trade Volume Sales:
2016-2024 .................................................................................................... 3
Chart 4 Alcoholic Drinks Impact of Soft Drivers on On-Trade Volume Sales:
2016-2024 .................................................................................................... 4
MARKET BACKGROUND ............................................................................................................ 4
Table 1 Number of On-trade Establishments by Type 2014-2019 ............................ 6
TAXATION AND DUTY LEVIES ................................................................................................... 6
Summary 1 Taxation and Duty Levies on Alcoholic Drinks 2019 .................................... 6
OPERATING ENVIRONMENT ..................................................................................................... 7
Contraband/parallel trade ......................................................................................................... 7
Duty free ................................................................................................................................... 7
Cross-border/private imports .................................................................................................... 7
KEY NEW PRODUCT LAUNCHES .............................................................................................. 8
Outlook ..................................................................................................................................... 8
MARKET INDICATORS ............................................................................................................... 8
Table 2 Retail Consumer Expenditure on Alcoholic Drinks 2014-2019 ..................... 8
MARKET DATA ............................................................................................................................ 8
Table 3 Sales of Alcoholic Drinks by Category: Total Volume 2014-2019 ................ 8
Table 4 Sales of Alcoholic Drinks by Category: Total Value 2014-2019 ................... 8
Table 5 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-
2019 ............................................................................................................. 9
Table 6 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-
2019 ............................................................................................................. 9
Table 7 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade:
Volume 2019 ................................................................................................ 9
Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value
2019 ............................................................................................................. 9
Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: %
Volume 2019 .............................................................................................. 10
Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: %
Value 2019 ................................................................................................. 10
Table 11 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-
2019 ........................................................................................................... 10
Table 12 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-
2019 ........................................................................................................... 11
Table 13 Distribution of Alcoholic Drinks by Format and by Category: % Off-
trade Volume 2019 ..................................................................................... 11
Table 14 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2019-
2024 ........................................................................................................... 12
© Euromonitor International
ALCOHOLIC DRINKS IN THE PHILIPPINES Passport ii
Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-

2024 ........................................................................................................... 12
Table 16 Forecast Sales of Alcoholic Drinks by Category: % Total Volume
Growth 2019-2024 ..................................................................................... 12
Table 17 Forecast Sales of Alcoholic Drinks by Category: % Total Value
Growth 2019-2024 ..................................................................................... 13
GLOBAL MACROECONOMIC ENVIRONMENT ........................................................................ 13
GLOBAL INDUSTRY ENVIRONMENT ...................................................................................... 13
DISCLAIMER ............................................................................................................................. 14
SOURCES.................................................................................................................................. 14
Summary 2 Research Sources ...................................................................................... 14
ALCOHOLIC DRINKS IN THE PHILIPPINES Passport 1
ALCOHOLIC DRINKS IN THE

PHILIPPINES
EXECUTIVE SUMMARY
COVID-19 impact on alcoholic drinks
The Philippines has taken several measures to control the spread of COVID-19 which have
had a significant impact on sales of alcoholic drinks in the country. Firstly, the country imposed a
lockdown in much of the country in mid-March which resulted in the closure of foodservice
outlets including bars and restaurants, as well as a ban on public gatherings. With drinking
alcohol often seen as a social occasion, sales have not simply shifted to the off-trade, albeit
retail sales are expected to fare somewhat better. Another obstacle has been the introduction of
restrictions on the sale of alcohol in some parts of the country. These measures were taken to
discourage consumers from gathering in groups and holding celebrations and events. Another
factor has been the impact of COVID-19 on tourism, with the significant drop in inbound arrivals
providing another blow to on-trade sales. Even as restrictions are lifted concerns over social
distancing are likely to limit footfall in on-trade establishments, at least in the short term.
COVID-19 country impact

For the period between 12 March and 15 May, the government in the Philippines introduced a
nationwide lockdown, albeit with some provinces without COVID-19 cases able to operate under
differing local community quarantine regulations. The national regulations called for only one
person being allowed to leave the home to buy food or medicines between 06.00hrs and
11.00hrs or between 15.00hrs and 18.00hrs. All non-essential establishments were closed, with
only supermarkets and markets open for food in retail and foodservice outlets allowed to offer
only takeaway and delivery services. The operating hours of essential stores varied in different
locations according to the lockdown measures implemented by their local authorities. Schools in
the country were shut and public gatherings were prohibited. While the government gradually
started to relax the rules from 1 May, it was then forced to reintroduce lockdowns in some parts
of the country, including Manila and surrounding districts, in early August due to fast-rising case
numbers.
Companies focus on millennials to help drive sales in 2019

The Philippines has a low median age with a large population of young adults of a legal
drinking age. As disposable incomes and living standards have improved these consumers have
shown a growing thirst for a greater variety of alcoholic drinks. In the past, domestic mid-priced
lager and brandy were two of the most popular options, but now other products such as craft
beer, cider/perry, English gin and whiskies are all growing in popularity, with leading companies
targeting millennials with these products. Millennials have shown a greater appetite for new
experiences than some other demographics, while they also show a strong desire to socialise in
foodservice outlets. As such, players such as San Miguel Brewery Inc and Emperador Distillers
Inc continued to target their marketing towards these consumers in 2019, with the use of social
media being a key strategy. Companies also used tasting and pairing events and bar
promotions to encourage consumers to try new products and to build awareness about products
such as wine and whiskies. Furthermore, there was a growing variety of bars continuing to open
in 2019, including pop-up bars, which specialise in specific drinks such as cocktails, gin, and
craft beer and which have helped to build interest in these drinks and the brands that sell them.
San Miguel Brewery remains in control in 2019 with its large portfolio of affordably priced beer
Despite the growing variety of alcoholic drinks in the market, beer remains the overwhelming
alcoholic drink of choice in the Philippines. This favours San Miguel Brewery Inc, which
accounted for almost three-quarters of total volume sales of alcoholic drinks in 2019. The
company’s domestic mid-priced lager brands Red Horse and San Miguel Pale Pilsen remain
hugely popular due to their affordable pricing, while it has also found some success with its
domestic premium lager brands San Miguel Super Dry and San Miguel Premium All Malt. The
company enjoys a strong distribution network while it continues to invest in both above- and
below-the-line marketing activities. It also continued to launch new products in 2019, such as its
new lychee flavour for its San Miguel Flavored Beer. While there are a growing number of
imported brands infiltrating the market, these generally only appeal to wealthier consumers,
expats and tourists, with many locals unable to afford their higher price tag.
The Philippines’ young population provides hope for a recovery in alcoholic drinks
COVID-19 is likely to have a strong impact on sales of alcoholic drinks in the Philippines in the
short term, but as restrictions are lifted the country is well positioned to recover. The country’s
large population of young adults of a legal drinking age means there is a large audience for
these products. Furthermore, thanks to the marketing and promotional efforts of both local and
international brands interest and awareness in a wider variety of products is growing, with
consumers keen to try new taste experiences. Social media is likely to play an increasing role
with this being an effective way of targeting different consumer profiles while also building brand
awareness and engagement. There is still plenty of room for development in terms of increasing
knowledge about products such as wine and whiskies, while it is hoped that the thriving bar
scene will return as concerns over social distancing soften. Nevertheless, the economic impact
of COVID-19 looms heavy and this could result in growth slowing through the on-trade towards
the end of the forecast period if consumers are forced to economise. This would likely result in
more consumers drinking and holding gatherings at home, rather than paying out to visit bars
and restaurants, which in turn could benefit off-trade sales.
Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-2024
Source: Euromonitor International Industry Forecast Model
Note: C19 Pessimistic 1 represents a modelled scenario with an estimated probability of 25-35% over a 1-year
horizon, factoring in macro drivers including GDP, stock prices, business and consumer confidence rates
alongside infection rates, supply chain and labour supply disruption rates
Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-2024

Note: C19 Pessimistic 1 represents a modelled scenario with an estimated probability of 25-35% over a 1-year
horizon, factoring in macro drivers including GDP, stock prices, business and consumer confidence rates
alongside infection rates, supply chain and labour supply disruption rates
Chart 3 Alcoholic Drinks Impact of Soft Drivers on Off-Trade Volume Sales: 2016-2024

Note: The above chart shows the growth decomposition split by macro drivers such as GDP per capita and
population alongside soft drivers listed as having a positive (+) or negative (-) impact on the total growth
rate
Chart 4 Alcoholic Drinks Impact of Soft Drivers on On-Trade Volume Sales: 2016-2024

Note: The above chart shows the growth decomposition split by macro drivers such as GDP per capita and
population alongside soft drivers listed as having a positive (+) or negative (-) impact on the total growth
rate
MARKET BACKGROUND
Legislation
Legal purchasing age and legal drinking age

▪ The legal drinking and purchasing age in the Philippines is 18 years old, as stated in the Anti-
Underage Drinking Act. Even so, some establishments, particularly small independent
grocers, still continue selling to minors as they benefit from lenient monitoring of the legal
purchasing and drinking age. In a bill entitled “Safe Hours for Children Act”, parents or
guardians are prohibited from letting their children be in a public space from 22.00hrs to
05.00hrs without a valid reason. Passing this bill into law may help curb underage drinking.
Drink driving
▪ Drink driving is punishable by law under the Anti-Drunk and Drugged Driving Act of 2013
which gives authority to traffic enforcers to conduct sobriety tests for drivers who seem to be
under the influence of alcohol.
▪ In 2015, the Land Transportation Office (LTO) started to use breath alcohol analysers to test
drivers who traffic enforcers suspected of driving under the influence of alcohol (DUI). Even if
they did not cause any accidents, motorists who are proven to have been DUI will be
imprisoned for three months, subject to a fine of at least PHP20,000, have their licence
suspended for 12 months and their vehicle impounded.
Advertising
▪ The Advertising Standards Council (ASC) regulates the advertising of alcoholic drinks in the
Philippines. The Advertising Code of Ethics, which was first released in 2008, sets out
advertising rules that are intended to protect consumers from false or inaccurate messages,
serves as the basis for its screening and regulation of advertising. This code is updated as the
ASC deems fit to keep up with the changing expectations of consumers and society. The
ASC’s Advertising Code of Ethics does not prohibit the use of celebrities in alcoholic drinks
advertising, which makes the practice common.
▪ Advertisements for alcoholic drinks should not: (1) imply that the consumption of
alcoholicdrinks leads to social acceptance; (2) depict refusing to drink as a foolish or negative
act; (3)depict the act of drinking itself; (4) promote excessive or heavy drinking; (5) claim
medical ortherapeutic benefits; or (5) be aimed or directed at minors. A “Drink Responsibly”
message isalso required to be displayed in advertising materials, particularly for television.
Otherstipulations can be found in the ASC’s Advertising Code of Ethics.
▪ Users must be required to confirm their age to prevent a minor from accessing brand
websites. They should also contain a social responsibility statement and links to social
organisations.
▪ There were no recent changes in advertising guidelines on alcoholic drinks in 2019.
Smoking ban
▪ Following President Rodrigo Duterte’s signing of Executive Number 26 in May 2017, the
nationwide smoking ban on public places was implemented in 2017. Specifically, the law
imposes a smoking ban on the following: In selected public places, which include schools,
youth hostels and other centres for youth activities; places in which fire hazards are present;
hospitals and clinics; public facilities such as airports and terminals; and food preparation
areas.
▪ The nationwide smoking ban did not change in 2019.
Opening hours
▪ Retail establishments such as hypermarkets and supermarkets typically operate from
09.00hrs to 21.00hrs, with earlier opening and later closing times at weekends. Convenience
stores, on the other hand, are open 24 hours a day. However, variety stores or sari-sari stores
open for different hours, depending on the preferences of the owner.
▪ While some on-trade establishments are open 24 hours a day, most, such as bars and clubs,
are open from 17.00hrs to 24.00hrs. However, restaurants that sell alcohol in key cities in
Metro Manila and Cebu are mostly open from 11.00hrs to 22.00hrs.
On-trade establishments
▪ The rise in the eating-out culture and the strengthening cocktail culture has made on-trade
establishments even more relevant, albeit off-trade establishments contribute the bulk of
alcoholic drinks volume sales. The industry is benefiting from the rise in consumer foodservice
establishments, particularly cafés/bars and full-service restaurants, where diners are more
willing to pay for wine and spirits on a per glass basis.
▪ Brands are investing on creating bars to promote their brands. Craft brewers such as Pedro
Brewcrafters, Wicked Elias, and Joe’s Brew have their respective bars. Heineken, Johnnie
Walker, and Jose Cuervo are international brands that invested on a bar centred on their
brands.
Table 1 Number of On-trade Establishments by Type 2014-2019
2014 2015 2016 2017 2018 2019
Cafés/Bars 15,659 15,669 15,730 15,861 15,993 16,135

Full-Service Restaurants 18,401 18,520 18,652 18,958 19,193 19,457
Limited-Service 12,220 13,614 15,154 16,317 17,602 18,907
Restaurants
Self-Service Cafeterias - - - - - -
Street Stalls/Kiosks 37,788 38,345 38,971 39,695 40,402 41,209
TOTAL 83,534 85,442 87,472 89,725 92,012 95,708
Source: Euromonitor International
TAXATION AND DUTY LEVIES

▪ First implemented in 2013, the Sin Tax Law laid down guidelines on the new taxation
structure for alcoholic drinks, based on their type, selling price and alcohol content.
Incremental increases in the excise tax of alcoholic drinks have been enforced since 2013.
▪ Across the board, the specific tax on beer, wine, and spirits rose by 4%.
Summary 1 Taxation and Duty Levies on Alcoholic Drinks 2019

Excise Tax VAT (%)
Distilled Spirits
(a) Ad valorem tax rate Based 20.0% 12.0%

on the net retail price per
proof (excluding excise and
value-added taxes)
(b) Specific tax per proof litre PHP23.40 12.0%
Wine
(a) Sparkling
wine/Champagne, where the
net retail price (excluding
excise and value-added
taxes) per 750ml bottle,
regardless of proof is:
(1) PHP500.00 or less PHP316.33 per litre 12.0%
(2) More than PHP500.00 PHP885.72 per litre 12.0%
(b) Still and carbonated wines PHP37.96 per litre 12.0%

containing 14% alcohol by
volume or less
(c) Still and carbonated wines PHP75.92 per litre 12.0%

containing more than 14% of
alcohol by volume but not
more than 25% of alcohol by

volume
(d) Fortified wines containing Taxed as distilled spirits 12.0%

more than 25% of alcohol by
volume shall be taxed as
distilled spirits
Fermented Liquors
Includes beer, lager, ale,

porter, and other fermented
liquors, except tuba, basi,
tapuy and similar fermented
liquors
where the net retail price

(excluding excise and value-
added taxes) per litre of
volume capacity is:
(a) PHP50.60 or less PHP25.42 per litre 12.0%
(b) More than PHP50.60 PHP25.42 per litre 12.0%
OPERATING ENVIRONMENT
Contraband/parallel trade
Imported products continue to account for a small percentage of the total volume of alcoholic
drinks consumed in the country. With strong domestic players in beer and spirits that indulge in
fierce price competition, contraband products have no room in the Philippines. However, some
importers have alternative trade channels that allow them to avoid taxes, thereby making
parallel trade an issue. Some off-trade and on-trade establishments use importers located in
free-port zones to maximise savings.
Duty free
Duty free continues to be an important channel for imported alcoholic drinks. Consumers on
the look-out for lower prices compared with off-trade establishments prefer duty-free shops,
especially since these shops are more generous in terms of product bundling promotions. Duty-
free shops can be found in international airports and malls with high tourist traffic, such as
Manila and Cebu, as well as free-port zones, such as Subic and Clark.
Cross-border/private imports
Cross-border/private imports remained negligible in the Philippines in 2019 and during the
review period.
KEY NEW PRODUCT LAUNCHES

▪ San Miguel Flavoured Beer extended its product line with the introduction of lychee flavour.
This should allow flavoured/mixed lager to gain further momentum with it appealing to
younger adults.
▪ Elsewhere, Zafiro Premium Gin entered English gin in the Philippines, with this offering a
PHP199 price point, which is way below that of Pernod Ricard’s Beefeater.
Outlook
▪ Alongside the rapid rise of craft beer, flavoured/mixed lager and English gin are two other
areas which saw huge growth potential at the end of the review period and as such are likely
to attract more investment and further product launches.
MARKET INDICATORS
Table 2 Retail Consumer Expenditure on Alcoholic Drinks 2014-2019
PHP million
2014 2015 2016 2017 2018 2019
Total 67,626.8 69,804.9 80,830.2 87,822.3 97,219.4 110,971.8

Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: 2019 data is forecast
MARKET DATA
Table 3 Sales of Alcoholic Drinks by Category: Total Volume 2014-2019
2014 2015 2016 2017 2018 2019
Beer (million litres) 1,571.9 1,616.4 1,877.0 2,159.5 2,381.2 2,612.6

Cider/Perry ('000 litres) 81.9 117.1 146.3 172.7 184.7 196.7
RTDs ('000 litres) 2,513.1 2,427.3 2,407.7 2,413.2 2,424.7 2,437.8
Spirits ('000 litres) 673,144.9 648,610.8 645,537.6 689,723.0 711,219.7 735,921.5
Wine (million litres) 15.5 16.9 18.5 20.2 22.1 24.1
Alcoholic Drinks 2,263.2 2,284.5 2,543.6 2,871.9 3,117.1 3,375.3
(million litres)
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 4 Sales of Alcoholic Drinks by Category: Total Value 2014-2019
PHP million
2014 2015 2016 2017 2018 2019
Beer 150,277.9 158,659.9 187,812.4 226,045.7 257,539.7 301,425.8

Cider/Perry 32.0 50.7 69.6 88.3 99.7 116.3
RTDs 460.0 440.9 433.0 445.4 463.1 489.8
Spirits 97,102.2 103,450.4 107,041.5 124,266.3 139,657.5 155,976.5
Wine 9,432.4 10,339.9 11,459.4 12,826.9 14,750.2 16,833.7

Table 5 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-2019
% total volume growth

2018/19 2014-19 CAGR 2014/19 Total
Beer 9.7 10.7 66.2

Cider/Perry 6.5 19.1 140.1
RTDs 0.5 -0.6 -3.0
Spirits 3.5 1.8 9.3
Wine 9.1 9.3 56.0
Alcoholic Drinks 8.3 8.3 49.1
Table 6 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-2019
% local currency, current value growth
2018/19 2014-19 CAGR 2014/19 Total
Beer 17.0 14.9 100.6

Cider/Perry 16.6 29.5 264.0
RTDs 5.8 1.3 6.5
Spirits 11.7 9.9 60.6
Wine 14.1 12.3 78.5
Table 7 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Volume 2019
Off-trade On-trade Total
Beer (million litres) 2,038.0 574.5 2,612.6

Cider/Perry ('000 litres) 50.2 146.6 196.7
RTDs ('000 litres) 1,556.7 881.1 2,437.8
Spirits ('000 litres) 644,578.4 91,343.1 735,921.5
Wine (million litres) 19.2 4.9 24.1
Alcoholic Drinks (million litres) 2,703.4 671.9 3,375.3
Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value 2019
PHP million
Beer 209,922.7 91,503.1 301,425.8

Cider/Perry 19.1 97.2 116.3
RTDs 295.2 194.7 489.8

Spirits 112,291.5 43,685.0 155,976.5
Wine 8,949.6 7,884.0 16,833.7
Alcoholic Drinks 331,478.2 143,363.9 474,842.1
Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Volume 2019
% volume analysis
Beer 78.0 22.0 100.0

Cider/Perry 25.5 74.5 100.0
RTDs 63.9 36.1 100.0
Spirits 87.6 12.4 100.0
Wine 79.5 20.5 100.0
Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Value 2019
% value analysis
Beer 69.6 30.4 100.0

Cider/Perry 16.5 83.5 100.0
RTDs 60.3 39.7 100.0
Spirits 72.0 28.0 100.0
Wine 53.2 46.8 100.0
Table 11 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-2019
% total volume
Company 2015 2016 2017 2018 2019
San Miguel Corp 74.0 77.0 78.6 80.3 82.0

Alliance Global Group Inc 12.0 9.9 8.4 7.2 6.1
Tanduay Distillers Inc 6.2 5.6 6.0 5.7 5.4
Asia Brewery Inc 5.2 4.9 4.5 4.3 4.1
AR Valdespino SA 0.2 0.2 0.2 0.3 0.4
Bel Mondo Italia Corp 0.2 0.2 0.2 0.3 0.3
Suntory Holdings Ltd 0.1 0.1 0.1 0.2 0.2
Diageo Plc 0.1 0.1 0.1 0.1 0.1
Emperador Distillers Inc 0.1 0.1 0.1 0.1 0.1
E&J Gallo Winery Inc 0.1 0.1 0.1 0.1 0.1
Others 1.8 1.7 1.5 1.5 1.3
Total 100.0 100.0 100.0 100.0 100.0
Table 12 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-2019
% off-trade
2014 2015 2016 2017 2018 2019
Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0
-- Discounters - - - - - -
-- Food/drink/tobacco 27.5 28.1 28.4 25.3 23.7 22.1
specialists
-- Hypermarkets 4.1 4.3 4.2 3.8 3.6 3.4
--- Convenience Stores 2.1 2.5 2.7 2.5 2.5 2.4
--- Forecourt Retailers - - - - - -
--- Independent Small 9.1 9.2 9.1 8.1 7.5 7.0
Grocers
-- Supermarkets 23.9 24.2 24.2 21.7 20.5 19.2
-- Other Grocery 33.3 31.7 31.4 38.6 42.1 45.9
Retailers
- Non-Grocery Specialists - - - - - -
-- Drugstores/ - - - - - -
parapharmacies
-- Other Non-Grocery - - - - - -
Alcoholic Drinks
Specialists
- Mixed Retailers - - - - - -
-- Department Stores - - - - - -
-- Mass Merchandisers - - - - - -
-- Variety Stores - - - - - -
-- Warehouse Clubs - - - - - -
Non-Store Retailing - - - - - -
- Direct Selling - - - - - -
- Homeshopping - - - - - -
- E-Commerce - - - - - -
- Vending - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 13 Distribution of Alcoholic Drinks by Format and by Category: % Off-trade Volume

2019
% off-trade
Beer Cider/Perry RTDs Spirits Wine
Store-Based Retailing 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0 100.0 100.0
-- Discounters 0.0 0.0 0.0 0.0 0.0
-- Food/drink/tobacco 1.3 43.5 13.4 13.5 41.2
specialists
-- Hypermarkets 2.4 7.5 7.4 3.3 6.6
--- Convenience Stores 2.4 0.8 16.1 0.4 1.3
--- Forecourt Retailers 0.0 0.0 0.0 0.0 0.0
--- Independent Small 12.6 0.0 7.9 9.2 0.0
Grocers
-- Supermarkets 19.8 47.7 54.0 26.5 50.2
-- Other Grocery 61.4 0.5 1.4 47.2 0.7
Retailers
- Non-Grocery Specialists 0.0 0.0 0.0 0.0 0.0

-- Drugstores/ 0.0 0.0 0.0 0.0 0.0
parapharmacies
-- Other Non-Grocery 0.0 0.0 0.0 0.0 0.0
Alcoholic Drinks
Specialists
- Mixed Retailers 0.0 0.0 0.0 0.0 0.0
-- Department Stores 0.0 0.0 0.0 0.0 0.0
-- Mass Merchandisers 0.0 0.0 0.0 0.0 0.0
-- Variety Stores 0.0 0.0 0.0 0.0 0.0
-- Warehouse Clubs 0.0 0.0 0.0 0.0 0.0
Non-Store Retailing 0.0 0.0 0.0 0.0 0.0
- Direct Selling 0.0 0.0 0.0 0.0 0.0
- Homeshopping 0.0 0.0 0.0 0.0 0.0
- E-Commerce 0.0 0.0 0.0 0.0 0.0
- Vending 0.0 0.0 0.0 0.0 0.0
Total 100.0 100.0 100.0 100.0 100.0
Table 14 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2019-2024
Million litres
2019 2020 2021 2022 2023 2024
Beer 2,612.6 2,443.1 2,372.0 2,558.4 2,750.1 2,946.2

Cider/Perry 0.2 0.2 0.2 0.2 0.2 0.2
RTDs 2.4 2.2 2.2 2.3 2.4 2.4
Spirits 735.9 699.8 659.1 680.7 699.8 719.9
Wine 24.1 22.7 22.0 23.7 25.4 27.1
trade sources
Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-2024
PHP million
2019 2020 2021 2022 2023 2024
Beer 301,425.8 284,617.8 290,690.8 326,203.1 364,620.7 406,058.4

Cider/Perry 116.3 95.8 111.1 127.7 143.9 159.8
RTDs 489.8 454.5 471.4 499.1 522.2 544.5
Spirits 155,976.5 148,821.7 148,700.5 160,331.2 170,460.4 181,512.9
Wine 16,833.7 14,972.6 15,611.0 17,308.6 19,063.1 20,817.8
trade sources
Table 16 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2019-
2024
% total volume growth

2019/20 2019-24 CAGR 2019/24 Total
Beer -6.5 2.4 12.8
Cider/Perry -18.1 0.9 4.7

RTDs -8.4 -0.4 -2.1
Spirits -4.9 -0.4 -2.2
Wine -5.9 2.3 12.2
Alcoholic Drinks -6.1 1.8 9.5
trade sources
Table 17 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2019-
2024
% local currency, constant value growth
2019/2020 2019-24 CAGR 2019/24 Total
Beer -5.6 6.1 34.7

Cider/Perry -17.6 6.6 37.4
RTDs -7.2 2.1 11.2
Spirits -4.6 3.1 16.4
Wine -11.1 4.3 23.7
Alcoholic Drinks -5.5 5.1 28.3
trade sources
GLOBAL MACROECONOMIC ENVIRONMENT

▪ The COVID-19 pandemic has forced governments to quarantine entire countries, disrupted
global supply chains, slashed business and consumer confidence and affected financial
markets. The effects on the global economy are already being felt, and will be substantial, but
the exact magnitude will depend on the length of COVID-19 restrictions.
▪ COVID-19 will severely impact both the supply and demand sides of the economy. At the
same time, monetary policy tools are almost exhausted due to the slow recovery from the
Global Financial Crisis. Interest rates have not recovered, so central banks have to resort to
Quantitative Easing programmes (QEs), but QEs have limited effect on labour markets,
consumer spending and other aspects of the real economy.
▪ Thus, countries have to turn to fiscal stimulus. However, the response to fiscal stimulus will be
limited too as long as people are quarantined in their homes. In the meantime, governments
are helping businesses and citizens by providing emergency loans to cover expenses and
lower the spillover effects through economies, but uncertainty surrounding the pandemic limits
economic activity.
GLOBAL INDUSTRY ENVIRONMENT

▪ COVID-19 will herald a fundamental paradigm shift for the alcoholic drinks industry. While
already facing demographic and saturation induced pressure in mature Western markets and
trade dispute-driven disruption, underlying themes provided many reasons to be positive in
2019.
▪ From the seemingly unstoppable momentum of the premiumisation narrative to the rise of
non-alcoholic adult beverages, themes that have become synonymous with the industry will
need to be reassessed and repositioned into a radically different context.
▪ On the other hand, themes such as the largely complacent and hesitant shift towards online
purchases – an area where the alcoholic drinks industry has historically lagged way behind
most other fmcg industries – will witness a huge acceleration at the same time that entirely
new occasions bridging the gap between the collapsing on-trade and globally quarantined off-
trade underscore the continued relevance of the industry regardless of circumstances.
▪ To better understand the impact of COVID-19 on the industry and what the crisis could mean
for near- and mid-term forecasts, please read the report, The Impact of Coronavirus on
Alcoholic Drinks (April 2020), which serves as an early guide to forecasting the crisis, with
insights on current results, lessons from impacted areas, and scenarios for understanding the
virus’ future impact.
DISCLAIMER
Forecast and scenario closing date: 10 August 2020
Report closing date: 26 August 2020
Analysis and data in this report give full consideration to the impact of COVID-19 on
consumer behaviour and market performance in 2020 and beyond. However, the situation
continues to develop rapidly, and the influence and severity of the pandemic are constantly
evolving. For the very latest insight on COVID-19 and its impact on industries and consumers, at
both global and national level, readers can access strategic analysis and updates on
www.euromonitor.com and via the Passport system, where new content is being added on a
systematic basis.
SOURCES
Sources used during the research included the following:
Summary 2 Research Sources

Official Sources Agriculture & Agri-Food Canada
Australian Trade Commission (Austrade)
Bureau of Customs
Bureau of Internal Revenue
Department of Trade & Industry
National Statistic Office
USDA Foreign Agricultural Service
Trade Associations Bureau National Interprofessionnel du Cognac

(BNIC)
Cámara Nacional de la Industria Tequilera
Comité Interprofessionnel du Vin de

Champagne (CIVC)
Confraria Del Cava Sant Sadurni
International Wines & Spirits Association
Office International de la Vigne et du Vin
Scotch Whisky Association
Trade Press Beverage World
Business World
Drinks International
Just Drinks
Wine & Spirits International
World Drink Trends

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Alcoholic Drinks in The Philippines: Euromonitor International September 2020

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Alcoholic Drinks in the

LIST OF CONTENTS AND TABLES

Table 15 Forecast Sales of Alcoholic Drinks by Category: Total Value 2019-

ALCOHOLIC DRINKS IN THE

COVID-19 country impact

Companies focus on millennials to help drive sales in 2019

Chart 1 Alcoholic Drinks Off-Trade Volume Sales Growth Scenarios: 2017-2024

Source: Euromonitor International Industry Forecast Model

Chart 2 Alcoholic Drinks On-Trade Volume Sales Growth Scenarios: 2017-2024

Source: Euromonitor International Industry Forecast Model

Source: Euromonitor International Industry Forecast Model

Source: Euromonitor International Industry Forecast Model

Legal purchasing age and legal drinking age

Table 1 Number of On-trade Establishments by Type 2014-2019

2014 2015 2016 2017 2018 2019

Cafés/Bars 15,659 15,669 15,730 15,861 15,993 16,135

TAXATION AND DUTY LEVIES

Summary 1 Taxation and Duty Levies on Alcoholic Drinks 2019

(a) Ad valorem tax rate Based 20.0% 12.0%

(b) Specific tax per proof litre PHP23.40 12.0%

(1) PHP500.00 or less PHP316.33 per litre 12.0%

(2) More than PHP500.00 PHP885.72 per litre 12.0%

(b) Still and carbonated wines PHP37.96 per litre 12.0%

(c) Still and carbonated wines PHP75.92 per litre 12.0%

more than 25% of alcohol by

(d) Fortified wines containing Taxed as distilled spirits 12.0%

Includes beer, lager, ale,

where the net retail price

(a) PHP50.60 or less PHP25.42 per litre 12.0%

(b) More than PHP50.60 PHP25.42 per litre 12.0%

Source: Euromonitor International

KEY NEW PRODUCT LAUNCHES

Total 67,626.8 69,804.9 80,830.2 87,822.3 97,219.4 110,971.8

2014 2015 2016 2017 2018 2019

Beer (million litres) 1,571.9 1,616.4 1,877.0 2,159.5 2,381.2 2,612.6

Table 4 Sales of Alcoholic Drinks by Category: Total Value 2014-2019

Beer 150,277.9 158,659.9 187,812.4 226,045.7 257,539.7 301,425.8

Alcoholic Drinks 257,304.4 272,941.7 306,815.9 363,672.6 412,510.2 474,842.1

Table 5 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2014-2019

% total volume growth

Beer 9.7 10.7 66.2

Table 6 Sales of Alcoholic Drinks by Category: % Total Value Growth 2014-2019

% local currency, current value growth

2018/19 2014-19 CAGR 2014/19 Total

Beer 17.0 14.9 100.6

Table 7 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Volume 2019

Off-trade On-trade Total

Beer (million litres) 2,038.0 574.5 2,612.6

Table 8 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: Value 2019

Beer 209,922.7 91,503.1 301,425.8

RTDs 295.2 194.7 489.8

Table 9 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Volume 2019

Beer 78.0 22.0 100.0

Table 10 Sales of Alcoholic Drinks by Category by Off-trade vs On-trade: % Value 2019

Beer 69.6 30.4 100.0

Table 11 GBO Company Shares of Alcoholic Drinks: % Total Volume 2015-2019

San Miguel Corp 74.0 77.0 78.6 80.3 82.0

Table 12 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2014-2019