United Romanian Breweries Bereprod (URBB), the bottler of Tuborg and Carlsberg beer brands on the Romanian market, is expected to make investments worth between 60 and 90 million euros, in order to double the production capacity of its plant, to 4 million hectolitres per year, i.e. just under a quarter of the total capacity of the Romanian beer market (20 million hectolitres), Ziarul Financiar published October 29.

The company made this decision after the beer market experienced growth in the first 9 months of the year, which was strongly boosted by recent high temperatures, and exceeded major players' expectations.

Company representatives have not decided on the location of the new production facility, which could be connected to the Bucharest-based plant, entailing the relocation of the distribution centre, or built in the Western part of the country, enabling better market coverage. "If the investment is made at the Bucharest plant, its value will stand at around 40 euros per hectolitre, i.e. approximately 60 million euros, but if we decide to build outside the Capital, i.e. in the Western part of the country, investments could reach as much as 60 euros per hectolitre, i.e. 90 million euros," said Shane Shachar, president of URBB.

The ...More Info

Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) announced its operational and financial results for the third quarter of 2007, in a press release, October 26.

“As the months have gone by, the trends that were established in our businesses during the first half of the year have continued to develop, and generally conditions today have improved relative to the earlier periods. During the third quarter Coca-Cola FEMSA continued to build on the profitability of its all-important Mexico operation, achieving real growth in operating income for the first time in four quarters, while the rest of the territories continued their strong pace of earnings growth. Oxxo once again delivered a stellar quarter with solid revenue growth and remarkable margin expansion. At FEMSA Cerveza, we continued to experience a tough raw materials environment that, together with increased promotional activity in Mexico, put pressure on our profits in the short term even as we continued to make significant progress in the United States and Brazil. And yet, our consolidated results for the quarter show robust growth in revenues and operating income above 7 percent in real terms. In a challenging year, we are being able to deliver results even as we continue to develop ...More Info

German beer sales dropped in the third quarter of 2007, after poor summer weather, official figures from the Federal Statistics Office suggest, according to BBC News, October 29.

In the three months to September, 2.74 billion litres (5.8 billion pints) of beer were sold, marking a drop of 210 million litres or 7.2% year-on-year.

Poor weather dented sales, as people spent less time in beer gardens, the German Brewers' Federation said.

The drop also came after strong sales in 2006, boosted by the World Cup.

Year-on-year, sales of beer are estimated to have been around 2.3% lower for the first nine months of 2007.

Peter Hahn, head of the Brewers' Federation, expressed hopes that sales would be better in 2008, notably if Germany's football team performs well in the European Championships.

In a statement, Mr Hahn said: "The god of weather is still one of the best beer salesmen".

Asahi Breweries Ltd and Kirin Holdings Co Inc will both expand their beer output in China in order to take advantage of the rapidly growing market, the Nikkei reported, according to Thomson Financial, October 29.

Asahi Breweries, Japan's largest brewer, will spend about 2.23 billion yen to double production capacity at its Shenzhen joint venture, the business daily said. The venture was set up with China's Tsingtao Brewery Group and trading house Itochu Corp.

Output at the venture will reach 210,000 kilolitres a year by next March and 330,000 kilolitres in 2010, up from the current 160,000 kilolitres, the report said.

Asahi Breweries is also considering raising capacity at its Hangzhou subsidiary to 300,000 kilolitres a year from 100,000 kilolitres at present, it said.

Kirin has secured land for expanding its new factory in Zhuhai opened last month, so that capacity could be raised to as much as 400,000 kilolitres annually, the report said. The Zhuhai plant is now capable of turning out 200,000 kilolitres a year.

(1 US dollar=114.21 yen)

The Taiwan Tobacco and Liquor Corp. plans to sell its star product, Taiwan Beer, to the U.S. and Canadian markets and will set up a liaison office in China to promote it, the company's star product, TTLC Chairman Martin Tsai said, according to Taiwan News, October 29.

In the face of stiff competition from imported beer, Taiwan Beer nonetheless maintains a domestic market share of approximately 80 percent thanks to the development of new product lines and successful marketing strategies, according to Tsai.

Tsai made the remarks while addressing the Branding Taiwan Forum 2007 held in Taipei, which also featured speeches by Chunghwa Telecom Chairman Hochen Tan and ZyXEL Communications Corp. Chairman Chu Shun-i, who shared their experiences in brand building. Noting the significance of marketing tactics, Tsai said that when the government opened the market to imported beer in 1987, Taiwan Beer's market share dropped sharply to 72 percent from 99 percent during the initial period.

However, the company then developed the new Gold Medal Taiwan Beer brand in 2003 and later hired entertainers and baseball players to tout the brand name among young people, Tsai said. He added that the marketing strategy proved successful, as the new ...More Info

Mexican beer maker Grupo Modelo SAB said that Danish brewer Carlsberg AS will distribute several Modelo brands in a number of European and Asian countries starting next year, Dow Jones Newswires reported October 29.

Modelo, which began distributing Carlsberg beers in Mexico this year, said in a press release that under the agreement, Carlsberg will sell Modelo brands in Switzerland, Italy, Malaysia and Singapore.

Modelo, in which Anheuser-Busch (BUD) has about a 50% stake, is the brewer of top U.S. import Corona and other brands.

Scottish & Newcastle is plotting to fund a solo bid for Carlsberg's stake in the two companies' Russian joint venture through a massive rights issue, The Telegraph published October 29. Under the plan, the British brewer would also borrow against the future cashflow of the venture.

The audacious proposal is among a number of options being studied by the board of S&N as a way of fending off an unsolicited takeover bid from rivals Carlsberg and Heineken. The duo last week tabled a 720p-a-share bid, valuing S&N at £6.8bn. The offer was immediately rejected by the board, with chairman Sir Brian Stewart describing it as "derisory". The board of S&N has discussed various funding options to buy Baltic Beverages Holding

When news of Carlsberg and Heineken's intentions first broke, S&N considered joining forces with other global brewers that could provide the financial muscle needed to gain control of Carlsberg's share of the venture – Baltic Beverages Holding (BBH) – which could cost up to £4.5bn.

SABMiller, which produces its eponymous Lite, and Budweiser brewer Anheuser-Busch are both understood to be watching the situation closely.

But the S&N board is now considering how it could seize control of BBH without compromising its independence. There is ...More Info

Kirin Holdings Co., Japan's biggest brewer, will raise beer prices for the first time in 17 years to cover the higher cost of brewing malt and aluminum cans, Bloomberg reported October 31.

Prices will rise for regular, low-malt and other beer products on Feb. 1, the company said in a statement to the Tokyo Stock Exchange today, without specifying the increase.

The price of malt has more than doubled and aluminum has risen about 30 percent in the past year, according to the Tokyo- based brewer.

Kirin follows Japanese noodle, bread and mayonnaise makers in announcing price increases after a decade of deflation in the world's second-biggest economy. Summer bonuses fell last month for the first time in three years, raising concerns household spending may falter.

Kirin's rivals Sapporo Holdings Ltd. and Asahi Breweries Ltd. said in the past week they may also increase beer prices.

“We are in a severe situation with rising costs and tough competition,'' Sapporo President Takao Murakami said yesterday.

Japan's producers of food and beverages have struggled to pass rising energy and materials costs to consumers as falling wages and an aging of the population cut demand.

Beer production fell in the first half this ...More Info

With lessening export demand, barley prices pulled back from their record high prices set in early October, according to Farm & Ranch Guide, October 26.

According to Larry Raap, grain merchandiser for Sun Prairie Grain in Minot, N.D., both Japan and Saudi Arabia have their barley needs filled at this time, although they may be back in the market later this year.

“They have got their belly full for the time being, but two months from now are they going to need more?” he questioned referring to the fact that earlier this fall they delayed tenders on feed barley purchases until December of this year.

With his location in the northern part of the region, Raap said he is getting a lot of calls from Canadians wanting to buy all of the corn they can get. This would free up their barley stocks for sale.

“And why wouldn't they buy corn at these prices and sell barley for six bucks?” he asked.

The export market has been the only action as far as feed barley is concerned, Raap noted, since corn is a far better value for feeders in this country. He attributes the strong demand for feed barley in Japan to the GMO issues ...More Info

As seasonal conditions deteriorated over the critical September–October period, with little or no worthwhile rain and continued above average temperatures, the forecast size of the major winter grain crops in 2007-08 has been further reduced from the forecasts released in September, according to ABARE, October 30.

Areas particularly affected have been parts of South Australia, northern Victoria and New South Wales.

Compared with ABARE’s September crop forecast, output of the winter barley is now forecast to be 5 million tonnes (previously 5.9 million tonnes).

Australia, the driest continent after Antarctica, is suffering its worst drought in a century.

Small brewers from Australia to the U.S. face the daunting prospect of tweaking their recipes or experimenting less with new brews thanks to a worldwide shortage of one key beer ingredient and rising prices for others, Canadian Press reported October 30.

Oh, and one other thing: beer prices are likely to climb. How high is anybody's guess. Craft brewers don't have the means to hedge against rising prices, like their industrial rivals.

"I'm guessing, at a minimum, at least a 10-per-cent jump in beer prices for the average consumer before the end of the year," said Terry Butler, brewmaster at central Washington's Snipes Mountain.

Sales have been relatively flat in recent years among the U.S. big three brewers - Anheuser-Busch, Molson Coors Brewing Co. and SABMiller PLC. unit Miller Brewing Co - while small, independent brewers have experienced tremendous growth. The craft brewing industry experienced a 12-per-cent increase by volume in 2006, with 6.7 million barrels of beer. Sales among microbreweries, which produce less than 15,000 barrels a year, grew 16 per cent in 2006.

Now the bright spot in the brewing industry is facing mounting costs on nearly every front. Fuel, aluminum and glass prices have been going up quickly over a period ...More Info