De-globalisation? Let’s have a beer…

Geneva based Decalia Asset Management assesses the beer industry is an example of changes occurring in globalisation.

The current collapse in global trade is widely seen as a cyclical phenomenon linked to the Chinese slowdown and transition.

However, this view is challenged by a new perspective, which suggests a different explanation: could this downturn signal a reversal of globalisation? Some analysts connect this trend to the rise of populist parties and laws curbing immigration in advanced economies, and interpret it as a sign that a structural de-globalisation may be underway.

Another way of looking at the situation is that every structural trend leads to a reaction – often a very visible and brutal one, which is suddenly released after years of accumulated pressure.

The side-effects of globalisation, the dominant trend for decades, are numerous: cumbersome supra-national regulations, massive cultural standardisation, industrial excesses, a rise in economic migration, and mounting popular resentment in many places.

In our view, globalisation is taking a step backwards, but it is not over yet. It will certainly continue to evolve – indeed, it must evolve.

Nothing like a cold beer to clear the mind and gain a better perspective ! The beer market, historically a harbinger of global trends, offers some valuable insights today.

In 1850, at the eve of the Industrial Revolution, there were thousands of independent breweries across Europe. A century later, massive concentration had reduced their number to less than a hundred.

European integration was just beginning. During the following 50 years, global champions such as Heineken, Budweiser or Guinness turned national brands into international ones, entering Asia even before China’s emergence.

A handful of global brands now dominate the world market. In the 90s, the industry started changing again.

Thousands of independent micro-breweries were launched, most of them successfully and profitably.

Changes in regulations and technologies have enabled small-scale operations, and consumers are now willing to pay more for an attractive local product.

The beer industry already demonstrates how globalisation is turning into “Glocalisation”: simultaneously global and local.



(graph : credit Decalia Asset Management)

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