Brewing giant SABMiller Plc reported a below-forecast 1.6 percent fall in first-quarter underlying beer volumes and warned of challenging trading in South Africa, sending its shares lower, Reuters reported on July 31.

The beer volumes for the April-June first quarter were predicted to show between growth of 3.5 percent and a fall of 1.0 percent. A Reuters poll of analysts pointed to an average growth of around 1.3 percent.

Shares in the London-based maker of Miller Lite, Peroni and Pilsner Urquell fell 3.4 percent to 10.66 pounds by 1135 GMT after trading around 10.90 pounds before the trading update.

The brewer reported a 7 percent rise in underlying volumes for its financial year to end-March 2008, but analysts had expected slower growth in the first quarter as beer price rises hit volume growth and it faced tough comparative figures.

Analyst Matthew Webb at Cazenove says he expects to trim his earnings forecasts by around two percent to reflect conditions in South Africa and says the shares trade on 13.1 times his 2009 earnings forecast, against the brewing sector's 12.3 times.

"We believe that SABMiller's organic growth rate will be below the rest of the sector in the short term, which makes it hard to argue ...More Info

German beer sales declined anew in the first half of this year. The country's brewers sold 10.93 billion pints (5.17 billion litres) of beer between January and June. That was a decline of 1.7 percent - 190 million pints, or 90 million litres - from the first half of last year, the Associated Press quoted data provided by Germany’s Federal Statistical Office on July 30.

The decline was caused by a number of factors. Much of Germany had a poor early summer, it is reported. On top of that came higher prices - a result of rising energy costs and higher prices for hops and malt - and partial bans on smoking in bars and restaurants that have gradually been taking effect across the country.

The nation’s increasing health-consciousness is cited as another reason for Germany’s steadily falling beer consumption.

Sales of beer mixed with soft drinks and fruit juices were unchanged in the first half at 486 million pints, or 230 million litres, the statistical office said.

Wednesday's figures did not include alcohol-free beer or imports from outside the European Union. Of the total sales, 85 percent were within Germany.

Exports to other EU countries declined by 2.5 percent in the first half, while ...More Info

China's leading brewers face mounting challenges as they attempt to expand market share while their margins are squeezed by higher input costs and a recent dip in sales, XFN-ASIA quoted Goldman Sachs on July 30.

Goldman Sachs announced it had downgraded Tsingtao's Hong Kong shares to "neutral" from "buy" and its A-shares to "sell" from "neutral" due to likely weak second quarter results and a more challenging competitive landscape.

The brokerage cut its Tsingtao H-share target price to 20 hkd from 27 hkd, and its A-share target to 12.5 yuan from 28.5 yuan.

On July 29, Tsingtao's H-shares were reported to close at 17.1 in Hong Kong, while in the morning of July 30 its A-shares were up 0.04 pct at 24.1 yuan in Shanghai.

Meanwhile, Yanjing Brewery remains "neutral," but its price target has been cut to 17.1 yuan from 18 yuan. The brewer's shares were up 0.96 pct at 16.76 yuan July 30 in the morning.

Goldman Sachs explained the changes in China’s competitive landscape by the merger of InBev and Anheuser-Busch, which will become the country's number two player with significant exposure to both the premium and mass markets.

However, as the integration InBev and A-B will take some time, the immediate ...More Info

Heineken NV, the Dutch brewer that sells beer in more than 170 countries, wants to buy Germany's Krombacher Brauerei GmbH, Bloomberg cited a report by Financial Times Deutschland on July 30.

Without naming the source of its information, the FTD stated that at the moment Heineken is examining how Germany's biggest family-owned brewer could be integrated into the company. One option would be to give Krombacher owners a minority stake in Heineken and allow them to keep running the German business.

A Heineken spokeswoman declined to comment to the FTD, while a Krombacher spokesman said there is ``no truth'' in the speculation, according to the newspaper.

A JPMorgan analyst cut his rating on shares of Molson Coors Brewing Co. on July 30, saying the brewer's joint venture with SABMiller PLC involves some risks, CNN Money quoted the Associated Press.

Analyst Dara Mohsenian lowered his rating to "Neutral" from "Overweight" and dropped his $65 price target. He also removed the company from JPMorgan's U.S. Equity Analysts' Focus List.

A strong rebound in sales trends in the U.S., market share improvement in Canada and cost-cutting is at least partially offset by "higher execution risk" with the joint venture, the analyst said in a note to investors.

Molson Coors is combining its U.S. operations with the U.S. arm of SABMiller PLC, the maker of Miller beers. The brewing operations are expected to be combined in 2009.

Mohsenian called the work of combining the companies "a complex process that involves significant risk."

"Given the large number of breweries (eight) involved in this process, as well as two different types of brewing processes primarily used by each company, we think execution risk is high in this combination," he said. "We also think the joint venture structure adds to risk as two separate management teams try to mesh into one culture."

The analyst acknowledged that the joint venture ...More Info

On July 28, Russian State Duma started considering amendments to the Administrative Codex and to the law of alcohol consumption, RIA Novosty announced. The amendments are to make tougher already existing restriction of alcohol consumption in public places and to rise the fixed fines.

The Duma deputies want to prohibit drinking beer and beer-based beverages not only in streets, parks and public gardens but also in apartment blocks entrances, staircase enclosures and on the beaches.

Besides, the submitted bill prohibits “light” alcohols (less than 12 % ethyl alcohol, such as wine) in any kind of public transport, at tram, trolleybus and bus stations.

Violation fine is to be 500 – 1000 roubles.

The new amendments ban 12% and more alcohol beverages in crowded places and in proximity of sources of increased danger, that is, in railway stations, airports, metro stations and trains, military facilities. Violating the law in such places will cost 1000 – 1500 roubles. At present, alcohol is prohibited on the territory of kindergartens, schools, medical centres, sport facilities and in public transport. Current fines make just 100 – 300 roubles.

According to Anheuser-Busch, investment banking, legal and accounting services connected to the $52 billion transaction will cost the company about $120 million in cash in the second half of 2008, STLToday wrote on July 26. The deal is expected to close this year.

Besides, the company anticipates incurring a $72 million non-cash charge in the fourth quarter because of the accelerated vesting of stock compensation awards. There also will be about $40 million in cash payments under an enhanced officer bonus program and cash payments of $71 million for deferred compensation and retirement plans for officers and directors of the company.

As it was reported, two lawsuits stemming from InBev's takeover proposal have been dropped.

One month ago, InBev filed a lawsuit against Anheuser-Busch in Delaware Chancery Court. InBev asked the court to rule that Anheuser-Busch's stockholders were permitted to remove all of the company's directors without cause. On July 23, InBev dropped the lawsuit.

On July 24, Anheuser-Busch dropped its case against InBev, filed July 7 in federal court in St. Louis. Anheuser-Busch had alleged that InBev made false and misleading statements regarding its nonbinding buyout proposal.

The Canadian Grain Commission (CGC) announced grain grading changes for western Canada's 2008-09 crop year that will come into effect on August 1, 2008, Country Guide reported on July 29.

Malt barley is to be graded separately as either two-row or six-row Select Malt Barley, to reflect the industry's handling and marketing practices.

Tolerances for sclerotinia were revised in specific grades of general purpose barley and rye, which are the same as the tolerances for ergot.

The Commission also released the grade schedule for the new general purpose wheat class as well as a revised grade schedule for Canada Western Red Winter wheat with the aim of enhancing domestic and international marketability.

The CGC is the federal agency responsible for establishing and maintaining Canada’s grain quality standards. Its programs result in shipments of grain that consistently meet contract specifications for quality, safety and quantity. The CGC regulates the grain industry to protect producers’ rights and ensure the integrity of grain transactions.

The situation on the European market as of July 30 with regard to barley is described as follows:

Feed barley

Feed barley in high demand by cattle breeders, as always. The gap between feed wheat and feed barley created more possibilities for fodder producers who proceeded to rebuild their stocks. The market is growing steadily, according to the French La Dépêche.

Malting barley

No interest from buyers. The market shows less activity. Prices fell due to harvest. In France, Germany, and UK, where the harvest just began, the yield reveals good quality and volume. The protein content is 11 – 12% higher in Germany compared to the other two countries. A second period of fall is expected with the beginning of harvest in the Scandinavian region, especially in Denmark.

Since July 29 Australian barley growers were to receive up to AU$220/tonne in second distribution payments for supporting ABB Grains’ 2007 pools, ABB Grain posted this week.

According to managing director Michael Iwaniw, “These substantial distributions range from AU$220/tonne for malting barley and AU$130/tonne for feed barley in the harvest pool, to $5/tonne for malting and feed barley grades in the select pool.”

“Of course, growers who chose ABB’s select barley pool received the bulk of their return in mid- April when the first distribution was sent out.

“These payments demonstrate our pools have performed exceptionally well and ABB has delivered on its commitment to growers to deliver solid returns from our pools,” he added.

ABB’s 2007 barley pools performed exceptionally well despite operating in a difficult market and a below-average harvest. Mr Iwaniw confirmed ABB would be running competitive commercial pool options for growers in the coming harvest and full details would shortly be available.

Tuija Sarlin, A. Vilpola, E. Kotaviita, J. Olkku and A. Haikara

Abstract

J. Inst. Brew. 113(2), 147–153, 2007 Fungal hydrophobins have been shown to induce gushing of beer. In order to study the occurrence and fate of hydrophobins at different stages of the production chain of beer, barley samples artificially infected in the field with Fusarium culmorum, F. graminearum and F. poae were collected during the growing period as well as during various stages of the malting process. In addition, naturally infected malt was brewed in pilot scale and samples were collected throughout the process. The samples were assayed for hydrophobin content using an ELISA method. The results showed that fungi produced hydrophobins that accumulated during barley grain development in the field, but that production was more pronounced during malting. Prolonged storage of barley tended to reduce the ability of fungi to produce hydrophobins in malting. Studies on the fate of hydrophobins during the brewing process revealed that mashing released hydrophobins from the malt into the wort. Some loss of hydrophobins occurred throughout the brewing process with spent grains, cold break (wort boiling) and surplus yeast. In addition, the beer filtration step reduced hydrophobin levels. Despite the substantial loss of hydrophobins during brewing, the level was high enough to induce the gushing detected in the final beer. Key words: Brewing, Fusarium, hydrophobins, malting. Load full article, 7 pages, 534 Kb, PDF file