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Top Industry News
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Africa: Sales of Guinness are growing in Africa, overtaking Britain and Ireland as the biggest market for the dark Irish brew in the past two years
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Vietnam: Breweries of the Vietnam Alcohol Beer and Beverage Association have decided to pass the tax on to consumers by raising the selling beer prices by 10 % from early 2004
...
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China: Lion Nathan's $10 million acquisition of its third brewery in China earlier this month confirms its plans to expand in the world's largest beer market
...
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In 2003 Russian breweries produced about 73 million hl of beer, according to The Russian Beer Union estimations
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USA: Construction of a huge barley-malting plant north of Great Falls is the first project in what has been dubbed the "value-added commodity park,"
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World Barley Area, Yield and Production
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Australia's 2003/04 barley production is forecast at 8.0 million tonnes up 1.0 million or 14 % from last month and up 4.3 million or 116 % from last year
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More news is available on site www.e-malt.com
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Australian brewer Foster’s has seen its profit forecast cut. Broker ABN Amro has reduced its earlier profit estimate for Foster’s for 2003-2004 from A$558 million to A$549 million
...more info
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Sweden: According to a study released recently by polling institute Sifo, the majority of Swedes are unhappy with the high price of alcohol in their country
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Central European Distribution Corporation (CEDC), the alcohol importer and distributor, should benefit from a cut in Polish corporate income tax and acquisitions in 2004
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The Portuguese soft drink and beer producer, Sumolis, has announced about its plans to invest in Brazil in 2004. The company said on December 29 that its investments for 2003 and 2004 will total €4.7m
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West Australia’s Agriculture Minister Kim Chance's decision to allow an Eastern States grain trader to export malting barley from West Australia (WA) to China has stunned the State's primary exporter
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USA, Pittsburgh: Cutting calories used to be enough for U.S. beer makers to lure Americans watching their waistlines
...more info
Brewery News
Africa: Sales of Guinness are growing in Africa, overtaking Britain and Ireland as the biggest market for the dark Irish brew in the past two years, Bloomberg News reported on December 31. Diageo, the world's largest liquor maker and owner of Guinness, is poised to earn net income of £135 million, or $233 million, from beer sales in Africa compared with £85 million in Ireland and £45 million in Britain, according to forecasts for the year through June by Graeme Eadie, a Deutsche Bank analyst. Profit from sales in Ireland totaled £130 million in 2001 compared with £70 million from sales in Africa, Eadie said.
"Without growth in African volumes, total brand volume would decline," said Nigel Davies, a J.P. Morgan Chase analyst in a report on Guinness in September. Guinness's reliance on developing nations in Africa for its profits, which account for about 17 % of overall Diageo profit, is a cause for investor concern, according to Deutsche Bank and J.P. Morgan.
"We aren't dismissive of the growth in Africa," Davies said. But "an over-reliance on this region for growth in Guinness volumes wouldn't be encouraging for the long-term brand." Africans have been drinking Guinness since the slave-trading era of the 1820's, company documents say. European merchant sailors preferred to load up with Guinness imported from Ireland rather than other beers because a higher concentration of alcohol, at 7.5 %, gave the stout a longer shelf life.
Guinness now employs 5,000 people in Africa in breweries from Lagos to Nairobi and from the Seychelles to Ouagadougou. The company accounts for about a quarter of branded-beer sales Africa, said J.P. Morgan's Davies. African countries - Nigeria, Kenya, Cameroon, Ivory Coast and South Africa - account for 5 of the 10 largest markets by volume in the world for Guinness and 40 % of worldwide profit...more info
Vietnam: Breweries of the Vietnam Alcohol Beer and Beverage Association have decided to pass the tax on to consumers by raising the selling beer prices by 10 % from early 2004, Vietnam News Agency wrote on January 2.
The increased price will help breweries cover the higher production cost when the amended laws on Special Consumption Tax, Value Added Tax (VAT) and Corporate Income Tax take effect on January 1, said Nguyen Van Hung, Deputy General Secretary of the association.
From early 2004, the special consumption tax rate for canned beer will go up ten percentage points to 75 percent, while that for draught beer is down 20 percentage points to 30 %. Bottled beer is entitled to the same tax rate of 75 percent.
The tax rate on alcohol from 40 degrees or above rises by five percentage points to 75 % and for alcohol from 20 to less than 40 degrees at 30 percent compared to the previous levels of 25-55 %.
At present, breweries pay no VAT as they are already subject to the special consumption tax. When the amended laws come into force, they have to pay both the VAT tariff of 10 % and the special consumption tax.
In fact, "breweries still remain the selling prices and just pass the 10 % VAT to consumers," Hung said. This means breweries will not absorb all the taxes and pass on a certain burden to consumers.
They reason that this price hike aims to help them well fulfill their tax obligations and stabilize the consumption markets, and the common voice also aims to prevent undercutting. Breweries under the association hold a dominant share on the market.
Given the new stance by breweries, many agents have rushed to stockpiling beer to earn higher profit from the price hike...more info
China: Lion Nathan's $10 million acquisition of its third brewery in China earlier this month confirms its plans to expand in the world's largest beer market despite $230 million of cumulative losses, according to The Courier Mail News.
The acquisition which will make the Australian brewing force, Lion Nathan, the largest brewer in the town of Changzhou, 90km west of Nanjing, comes as the company has stemmed its losses on its China beer business and is on a focused expansion strategy for the country.
Situated between Nanjing and its existing brewery in Wuxi, the Hua Xia brewery in Changzhou is Lion's latest move in a strategy of expanding its foothold in the rich Yangtze River Delta region. It will not only give Lion access to some 22 million litres of capacity in the city, where the brewery markets the Linkman beer, but will make it easier to sell its other China brands in the region.
Lion's China business broke even for the first time on a cash basis in its financial year to the end of September 2003 and is expected to grow by another 30 per cent in 2004, on the way to overtaking production in Lion's New Zealand home.
While serious profits are still a long way off, the China business is on the look out for more acquisitions in the Yangtze River Delta area and is eyeing the high level alliances being struck with the fast moving consolidation of the Chinese beer market.
"We have definitely turned it around," says Lion Nathan's managing director, China operations, David Carter, who took on the job in August 2000 when losses were running at some $25 million a year. "The (production) volumes could be bigger than New Zealand very quickly...more info
In 2003 Russian breweries produced about 73 million hl of beer, according to The Russian Beer Union estimations, V. Mamontov, the president of Russian Beer Union said at the press conference on December 30. He added that in 2004 beer production in Russia would increase 4% and reach the level of 76-76.5 million hl of beer.
Now Russia has about 300 breweries, 20 of which are major and other are medium and small.
In 2002 beer consumption per capita in Russia reached 47 litres. However in central regions this figure comes to 60-65 litres meanwhile in underdeveloped regions it comes only to 15 litres, Mamontov said.
Malt News
USA: Construction of a huge barley-malting plant north of Great Falls is the first project in what has been dubbed the "value-added commodity park," which Great Falls Development Authority chief John Kramer said puts Great Falls on the map with an asset for the entire state, The Great Falls Tribune said in a report regarding 2003 results. In hopes of attracting other tenants to the park, infrastructure costing $8 million is being built to serve the area.
According to Damien Lesaffre, president of International Malting Co., the $60 million plant is progressing on schedule and may be buying barley from Montana growers next year.
"That's the whole idea," said Kramer. "We're not doing all this for the 45 jobs at International Malting, or for the interim construction jobs. We're doing this to generate a market for Montana commodities."
The company said the plant will consume 11 million bushels of malt barley each year. Annual malt production is expected to be 12 million bushels.
Barley News
World Barley Area, Yield and Production
| Country/Region |
Area |
Yield |
Production |
| 2001/02 |
2002/03 |
2003/04f |
2001/02 |
2002/03 |
2003/04f |
2001/02 |
2002/03 |
2003/04f |
| Million hectares |
Metric tonnes per
hectares |
Million metric tonnes |
| World |
56.82 |
56.15 |
59.45 |
2.50 |
2.37 |
2.31 |
141.79 |
132.79 |
137.25 |
| United States |
1.74 |
1.67 |
1.90 |
3.13 |
2.95 |
3.17 |
5.43 |
4.93 |
6.01 |
| |
|
|
|
|
|
|
|
|
|
| EU |
10.74 |
10.54 |
10.58 |
4.48 |
4.56 |
4.43 |
48.09 |
48.02 |
46.80 |
| Denmark |
0.74 |
0.83 |
0.71 |
5.33 |
5.00 |
5.31 |
3.97 |
4.12 |
3.77 |
| France |
1.71 |
1.64 |
1.75 |
5.75 |
6.69 |
5.66 |
9.81 |
10.99 |
9.87 |
| Germany |
2.11 |
1.97 |
2.09 |
6.39 |
5.55 |
5.12 |
13.50 |
10.93 |
10.67 |
| Italy |
0.33 |
0.34 |
0.31 |
3.38 |
3.47 |
3.48 |
1.13 |
1.19 |
1.08 |
| Spain |
2.99 |
3.10 |
3.09 |
2.09 |
2.69 |
2.82 |
6.25 |
8.33 |
8.70 |
| UK |
1.25 |
1.10 |
1.08 |
5.35 |
5.57 |
6.05 |
6.66 |
6.13 |
6.50 |
| |
|
|
|
|
|
|
|
|
|
| FSU-12 |
17.22 |
17.25 |
18.57 |
2.03 |
1.97 |
1.52 |
34.93 |
33.97 |
28.19 |
| Russia |
10.20 |
10.25 |
10.50 |
1.91 |
1.82 |
1.48 |
19.50 |
18.70 |
15.50 |
| Ukraine |
3.92 |
4.15 |
5.00 |
2.60 |
2.49 |
1.60 |
10.19 |
10.35 |
8.00 |
| Kazakstan |
1.70 |
1.75 |
1.80 |
1.29 |
1.26 |
1.11 |
2.20 |
2.20 |
2.00 |
| Baltic States |
0.60 |
0.63 |
0.60 |
2.19 |
2.11 |
2.13 |
1.32 |
1.34 |
1.28 |
| |
|
|
|
|
|
|
|
|
|
| Centr. Europe |
2.97 |
3.05 |
2.81 |
3.30 |
3.06 |
2.82 |
9.79 |
9.33 |
7.91 |
| Poland |
1.07 |
1.06 |
1.00 |
3.11 |
3.18 |
2.80 |
3.33 |
3.37 |
2.80 |
| Czech Rep. |
0.50 |
0.49 |
0.55 |
3.97 |
3.67 |
3.76 |
1.97 |
1.79 |
2.07 |
| Romania |
0.32 |
0.30 |
0.25 |
3.34 |
2.23 |
1.80 |
1.06 |
0.66 |
0.45 |
| |
|
|
|
|
|
|
|
|
|
| Canada |
4.15 |
3.35 |
4.45 |
2.61 |
2.24 |
2.76 |
10.85 |
7.49 |
12.30 |
| |
|
|
|
|
|
|
|
|
|
| Other W.Europe |
0.22 |
0.22 |
0.22 |
3.98 |
4.32 |
4.32 |
0.86 |
0.95 |
0.95 |
| |
|
|
|
|
|
|
|
|
|
| Norway |
0.17 |
0.18 |
0.18 |
3.54 |
3.71 |
3.71 |
0.61 |
0.65 |
0.65 |
| Turkey |
3.50 |
3.55 |
3.45 |
1.97 |
2.08 |
2.03 |
6.90 |
7.40 |
7.00 |
| Australia |
3.72 |
3.77 |
4.00 |
2.26 |
0.98 |
2.00 |
8.42 |
3.71 |
8.00 |
| China |
0.77 |
0.73 |
0.65 |
3.76 |
3.41 |
3.41 |
2.89 |
2.47 |
2.20 |
| Morocco |
2.13 |
2.00 |
2.15 |
0.54 |
0.83 |
1.30 |
1.16 |
1.67 |
2.80 |
| India |
0.75 |
0.75 |
0.75 |
1.90 |
2.00 |
2.00 |
1.43 |
1.50 |
1.50 |
| |
|
|
|
|
|
|
|
|
|
| Others |
8.31 |
8.64 |
9.33 |
1.17 |
1.16 |
1.32 |
9.71 |
10.02 |
12.31 |
Source: FAS, USDA
Australia's 2003/04 barley production is forecast at 8.0 million tonnes up 1.0 million or 14 % from last month and up 4.3 million or 116 % from last year. This large year-to-year production increase is the result of increased area and yield. The sharp rebound in 2003/04 production is due to the significantly improved growing conditions as compared to last season’s drought devastated winter-crop harvest. The current 2003/04 Australia barley area forecast is 4.0 million hectares up 0.5 million or 14 percent from last month and up 0.3 million or 8 percent from last year. Increases in planted area for barley follow the same trends observed for wheat. The yield forecast of 2.0 tons per hectare is an average barley yield prior to last year’s 100-year drought.
Theoretical malt prices.
| EURO = USD 1.2583 January 04, 2004 |
| Crop year |
2003 |
| Parity |
FOB Antwerp |
| Position |
Jan 2004-Sept 2004 |
| Conditioning |
Bulk |
In bags |
Bulk containers |
In bags in containers |
| Malting barley variety |
EURO |
USD |
EURO |
USD |
EURO |
USD |
EURO |
USD |
| 2RS |
Scarlett |
276.00 |
347.00 |
291.00 |
366.00 |
287.50 |
361.50 |
297.00 |
373.50 |
| 2RS |
Prestige/Cellar |
275.50 |
346.50 |
290.50 |
365.50 |
287.00 |
361.00 |
296.50 |
373.00 |
| 2RS |
Aspen |
274.00 |
344.50 |
289.00 |
364.00 |
285.50 |
359.50 |
295.00 |
371.50 |
| 2RS |
Optic |
274.00 |
344.50 |
289.00 |
364.00 |
285.50 |
359.50 |
295.00 |
371.50 |
| 2RS |
Astoria |
273.00 |
343.50 |
288.00 |
362.50 |
284.50 |
357.50 |
294.00 |
369.50 |
| 2RS |
Cork |
273.00 |
343.50 |
288.00 |
362.50 |
284.50 |
357.50 |
294.00 |
369.50 |
| 2RS |
Average price |
274.50 |
345.50 |
289.50 |
364.50 |
286.00 |
359.50 |
295.50 |
371.50 |
| 2RS |
FAQ |
271.50 |
341.50 |
286.50 |
360.50 |
283.00 |
356.50 |
292.50 |
368.00 |
| 6RW |
Esterel |
269.50 |
339.50 |
285.00 |
358.50 |
281.50 |
354.00 |
291.00 |
366.00 |
| * |
Asia Malt 70/30 |
273.00 |
343.50 |
288.00 |
362.50 |
284.50 |
358.00 |
294.00 |
370.00 |
| ** |
Asia Malt 50/50 |
272.00 |
342.50 |
287.50 |
361.50 |
283.50 |
357.00 |
293.00 |
369.00 |
|
* - 70/30 = 70% Average two Rows Spring and 30% Six Rows Winter
** - 50/50 = 50% Average two Rows Spring and 50% Six Rows Winter
Theoretical malt prices for crop 2004 are available on site
www.e-malt.com/MarketPrices
Malting barley prices. French barley prices.
Nominal prices.
| EURO = USD 1.2583 January 04, 2004 |
| Crop year |
2003 |
2004 |
| Parity |
FOB Creil |
FOB Creil |
| Position |
July 2003 |
July 2004 |
| Type |
Variety |
EURO |
USD |
EURO |
USD |
| 2RS |
Scarlett |
143.50 |
180.50 |
142.00 |
179.00 |
| 2RS |
Prestige/Cellar |
143.00 |
180.00 |
141.00 |
177.50 |
| 2RS |
Aspen |
142.00 |
179.00 |
140.00 |
176.50 |
| 2RS |
Optic |
142.00 |
179.00 |
140.00 |
176.50 |
| 2RS |
Astoria |
141.00 |
177.50 |
139.00 |
175.00 |
| 2RS |
Cork |
141.00 |
177.50 |
139.00 |
175.00 |
| 6RW |
Esterel |
138.50 |
174.50 |
125.00 |
157.50 |
French Malting Barley Price Evolution
Graph of the week
Agenda
January 2004:
INTERNATIONAL FOOD & DRINK EXHIBITION (IFDE 2004);
The 2004 Barley Day;
Pianeta Birra - Beverage & Co. International Show of Beers, Beverages...;
February 2004:
Pianeta Birra - Beverage & Co. International Show of Beers, Beverages;
HOFEX 2004 Food & Drink;
Canadian Food & Beverage Show;
BIEREXPO;
March 2004:
International course - Malting and Brewing Science;
FOODEX Japan 2004;
ANTAD 2004;
2004 BIENNIAL CONVENTION;
Beer Auction 2004, the international exhibition of beer, technology and equipment;
China Drinktec 2004. China International Exhibition on Beverage and Brewing Processing Technology
More events are available on site e-malt.com
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