Base Currency: Euro, EUR on 12-May-2004 1 EUR = 1.1867 USD 1 EUR = 0.6764 GBP 1 EUR = 1.6470 CAD 1 EUR = 1.7043 AUD 1 EUR = 134.36 JPY 1 EUR = 3.6503 BRL 1 EUR = 34.3431 RUB	Base Currency: US Dollar on 12-May-2004 1 USD = 0.8429 EUR 1 USD = 0.5699 GBP 1 USD = 1.3879 CAD 1 USD = 1.4362 AUD 1 USD = 113.24 JPY 1 USD = 3.076 BRL 1 USD = 28.94 RUB
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Romania: SABMiller Plc, one of the world's largest brewers, has purchased an 81.1 % stake in Romanian brewer Aurora S.A. at a cost of $16.2 million (R114 million). The expected purchase of additional shares prior to closing will increase SABMiller’s share holding to at least 90%, SABMiller announced on May 10. The acquisition is conditional upon Romanian Competition Council approval and the fulfillment of certain technical requirements. The move is part of the group's aim to stay ahead of other international brewers, including Brau, Interbrew and Carlsberg, who all have a significant presence in the market, the press said. Aurora has one brewery, located in the city of Brasov in central Romania, and a national market share of 5.2%, which put it in the top five players in the country. The brewery has an annual capacity of 680,000 hectolitres and annual sales of 659,000 hectolitres. The value of the net assets to be acquired is approximately US$16.2 million and the purchase consideration implies a 2003 EBITDA multiple of less than 5.0 times. Aurora brewery will become SABMiller’s fourth in Romania, joining its other operations in Cluj-Napoca, Buzau, and Timisoara. Aurora’s main brands are Ciucas and a recently launched PET brand Cerbul, both of which have a strong regional presence. The acquisition offers the opportunity to grow these brands via SABMiller’s existing distribution platform. Following the transaction SABMiller will have a market share in Romania of approximately 20%, a strong number two position in the market...more info

Hong Kong: U.S. brewing giant Anheuser-Busch, challenging SABMiller for China's Harbin Brewery, is "the right strategic partner" for the beer maker, a mainland paper quoted a top government official as saying. A report in Chinese language Harbin Daily dated May 8 said Anheuser-Busch International President Stephen Burrows met Harbin city government officials last week. "A-B is a big corporate with influence in the global beer market. It is the right strategic partner that we have long been seeking," the daily quoted Harbin city Mayor Shi Zhongxing as saying. Anheuser has agreed with Harbin's management to buy a 29 % stake in the firm for HK$1.08 billion (US$138.5 million) or HK$3.70 per share and looks set to win support from local government for the country's fourth-largest beer maker. SABMiller, which already owns a 29.4 5 stake in Harbin, has launched a hostile US$553 million takeover offer following the news of Anheuser-Busch's investment, Reuters said on May 10. Anheuser, maker of Budweiser beer, is still waiting for government approval for its plan to buy a stake in Harbin, which dominates China's northeastern market. "The possible cooperation with A-B would benefit the development of Harbin...it would help the (beer) market consolidation in the northeast and boost profit," Mayor Shi Zhongxing was also quoted as saying...more info

Canada, Vancouver: Microbreweries in British Columbia are straining to meet demand during a strike that has halted distribution of major brands across most of the province, The Associated Press revealed on May 10. About 300 workers hit the bricks May 1 in a wage dispute at Brewers Distributor Ltd. in New Westminster, halting deliveries of Canada's two leading brands of beer, Molson and Labatt, and of many imports, including Miller, Coors and Budweiser from the United States. At the Labatt brewery in New Westminster, about 100 employees have been temporarily laid off and operations have been shut down since May 4. Some stores and bars have run out of Labatt and Molson products and stocks are rapidly disappearing from others. The Picadilly Pub in Vancouver ran out of Labatt and Molson late May 5 and sales declined by 15 % to 20 %, general manager David Kim said. "It's definitely affected business because we don't have any more cheap beers here," Kim said. Meanwhile, at some provincial liquor stores, orders for more expensive microbrewery product such as Granville Island and Sleemans have nearly doubled. Granville Island Brewing has doubled production and tripled distribution, and about 100 employees at Vernon's Okanagan Spring brewery have had to work overtime on weekends to keep up with demand...more info

Japan: Kirin Brewery Company, Limited announced on May 11, 2004 the summary of consolidated financial results for the first quarter of 2004 (January 1, 2004 - March 31, 2004). During the first quarter of 2004 (January 1, 2004 - March 31, 2004), sales in the alcohol beverages category were fairly steady, the company said. As a result, consolidated net sales were ¥326.4 billion, an increase of 3.6% compared with the same period in the previous fiscal year. Consolidated operating income increased 46.2% to ¥14.5 billion, and consolidated ordinary income increased 54.4% to ¥13.1 billion. Consolidated net income was ¥3.5 billion (US$31.3m), an increase of 341.3%. Amid the changing environment within the alcohol business, Kirin continued to improve its earning capacity, focused on strengthening core brands to increase the value of the Kirin brand, and the value offered to consumers, primarily through its beer, happo-shu and chu-hi drink brands. In the happo-shu (low-malt beer) category, Kirin concentrated mainly on strengthening its key Kirin Tanrei brand, including Tanrei Green Label and Tanrei Alpha for health-conscious consumers, and Gokunama and Namakuro brands, featuring quaffable and cost saving concepts. New market-creating products were also launched, such as Kirin Honey Brown, a happo-shu that offers a unique taste by using honey as an ingredient. Kirin Honey Brown was released nationwide in February. “In the beer category, which makes the largest contribution to increasing its corporate brand value, the Company maximized product brands by substantializing the value that consumers expect from beer.”...more info

Peru, Lima: Peru's only brewer, Union de Cervecerias Backus & Johnston, has proposed a swap of its investment shares and B-class shares for a new class of non-voting preference shares in a deal worth up to $244 million, Reuters said on May 10. The company said in a statement on May 10 that the share swap was designed to establish "a share with a stable yield that can be very attractive for investors." It will have a fixed dividend, and investors will be offered a 30 percent premium for the voluntary swap, it added. The board of Backus, which is controlled by Colombian brewer Bavaria, the fourth biggest brewer in Latin America, approved the proposal last Friday and it will be put to a shareholders meeting on June 7. Backus makes the Cusquena, Cristal and Pilsen brands. Backus said the terms of the offer implied a value of 1.2 soles (34 cents) per investment share and 13.2 soles ($3.8) per B-class share. Neither share had traded by late morning in Lima. The investment shares closed on Friday at 0.91 soles and the B-shares at 10.01 soles. "This implies a premium of more than 30 percent compared with the investment share and B-class share prices on the stock exchange (on Friday)," the company said in a statement...more info

Malt News

EU malt export licence bookings from July 1, 2003, until April 27, 2004 were 2.013 million tonnes. The figure is close to the total bookings of 2.038 million tonnes last year. If licence fixations continued at an unchanged pace, then totals for this year could be 2.4 million tonnes, a plus of 350-400 thousand tonnes as compared to 2002/2003, market analysts revealed in a statement. Although the final figure may not be as high, two facts are fairly obvious already now: - 1) Last year’s low figure must have been caused by technical factors, viz slow deliveries during one or two months. As physical exports were 2.373 million tonnes in 2002 (figures for 2003 are not available yet), one can assume a rather steady export pace between 2.2 and 2.4 million tonnes from the year 2000 till today. – 2) It is also obvious that losses of sales to South America, Japan and Russia have not yet led to an overall loss of exports, but have been compensated by gains to other destinations.

EU malt export licence fixations:

(in tonnes)	2000 - 2001	2001 - 2002	2002 - 2003	July 1, 2003 - April 27, 2004
France	523,190	701,134	661,772	626,530
Germany	305,980	468,314	408,063	355,800
Belgium	277,584	296,368	287,850	287,070
U.K.	254,793	350,621	294,995	389,852
Finland	65,550	91,890	100,758	86,110
Denmark	52,326	96,812	94,791	67,677
Sweden	50,847	101,000	76,916	65,869
Netherlands	54,835	51,310	66,219	77,421
Ireland	26,003	35,145	31,140	32,900
Austria	4,850	8,840	8,620	12,286
Spain	3,000	2,400	5,640	10,000
Greece	1,800	1,744	1,306	840
Portugal	340	221	85	525
Italy	-	-	2	-
Total:	1,621,098	2,205,799	2,038,157	2,012,880

	Total Wheat malt, tonnes
Total 2000/2001	4,686
Total 2001/2002	12,805
Total 2002/2003	30,908
July 1/2003 – April 27/2004	11,382
	Total Roasted malt, tonnes
Total 2000/2001	23,967
Total 2001/2002	23,480
Total 2002/2003	23,603
July 1/2003 – April 27/2004	20,221

Barley News

Australia's second-biggest listed grain company will be created with market capitalization of about $A850 million ($US594.87 million) after an announcement made on May 10 that ABB Grain Ltd will merge with fellow South Australian-based company AusBulk Ltd. Under the terms of the deal, shareholders of Ausbulk and its majority owner United Grower Holdings (UGH) will be issued with ABB shares, according to Asia Pulse. The company will trade under the name ABB Grain, with AusBulk and UGH, becoming wholly-owned subsidiaries. The announcement from May 10 ended a month of renewed merger discussions after previous talks broke down in March when ABB and AusBulk cited differences in corporate culture and disagreements over valuations as the reason for an impasse. Shares in ABB, the world's biggest exporter of malting barley, ended the day steady at $6.13. The number of shares in ABB will double from 48 million to between 90-94 million and a system of grower-owned A-class and B-class shares will be retained. Growers will have access to untraded A-class shares and be responsible for electing the board, which will be shrunk from 13 directors to nine after the 2006. Ninety per cent of B-class shares will also be owned by growers...more info

USA barley acres will drop by almost 250,000 ha from last year’s 2.145 million ha to 1.897 million ha in 2004. U.S. grain acreage forecasts for 2004 show impressive gains for soybeans, but losses for wheat and coarse grains. Canada expects the barley acreage down by 10-15 % from 5.046 million ha in 2003 to 4.732 million ha in 2004. Grain areas all over Australia have turned too dry in recent months. Barley planting should commence soon, but farmers need rain.

Theoretical malt prices.

* - 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 online www.e-malt.com/MarketPrices

Malting barley prices. French barley prices.

Graph of the week

Agenda

May 2004:
EBC SYMPOSIUM 'FOOD SAFETY & TRACEABILITY'
CANADEAN'S 4th INTERNATIONAL BEER CONFERENCE
CITBUSMED 2004
PIVO, GASTRO, BAKERY / Bulgaria
ALCO + SOFT 2004 / Ukraine
FOOD & DRINKS/FOOD TECHNOLOGY 2004 / Moldova
Beer International Brewing Technology Exhibition / Russia

June 2004:
ALIMENTARIA MEXICO International Food and Beverages Exhibition
Hotelympia
10th international symposium on pre-harvest sprouting in cereals;
BevTek / BrewTek
IGC GRAINS CONFERENCE 2004
26th Annual National Homebrewers Conference
Coceral Congress 2004
The 9th International Barley Genetics Symposium
Little Oktoberfest

July 2004:
VI Moscow Beer Festival;
Lucky Baldwin's IPA Festival
BevTek / BrewTek China
Vermont Brewers Festival
World Brewing Congress 2004
Hop, malt and beer of Russia Exhibition

More events are available on site e-malt.com