Diageo plc and Kirin Brewery Co., Ltd. announced on April, 6 an agreement to form a joint venture in Japan to expand distribution of Diageo products and contribute to the growth objectives of both companies.

According to an official statement, the joint venture company, to be named Diageo Kirin Company, Limited, will be 51% owned by Diageo and 49% by Kirin, and is expected to begin operations in June, 2009.

Combining the capabilities and expertise of both companies, the new firm will develop the overall business strategy for Diageo premium brands to be sold by Kirin in Japan. It will also provide nationwide brand marketing support to both companies, and modern on-trade sales support in the Tokyo, Osaka and Nagoya metropolitan areas.

The Diageo premium brands to be sold by Kirin and distributed through Kirin's nationwide distributor network will include Guinness, Kilkenny and Smirnoff Ice, plus brands already handled by Kirin, namely Captain Morgan rum, Crown Royal, Gilbey's Gin, Gilbey's Vodka, Godiva, Myers's rum, Seagram's Seven Crown and Seagram VO.

Diageo noted that Kirin has a sophisticated distribution network that extends nationwide, and has a strong sales pedigree in the Japanese beer market. This provides an optimal platform from which to expand Diageo's premium ...More Info

Tsingtao Brewery Co. said its 2008 net profit rose 25.3% as higher sales more than offset rising raw material costs, Dow Jones reported on April, 8.

Net profit for the 12 months ended Dec. 31 was 699.55 million yuan, up from CNY558.14 million recorded the previous year, according to Chinese accounting standards.

The Hong Kong- and Shanghai-listed brewer said its 2008 revenue rose to CNY16.02 billion from CNY13.71 billion in 2007.

According to international accounting standards, Tsingtao Brewery's 2008 net profit totaled CNY699.55 million, up 29.8% from CNY538.91 million in 2007.

Tsingtao Brewery is China's second-largest beer maker by sales volume after China Resources Snow Breweries Co.

Efes Breweries International N.V. (“EBI”) announced on April, 3 its consolidated audited financial results for the year ended 31 December 2008 in accordance with IFRS.

In 2008 the brewer’s consolidated sales volume reached 14.05 mln hl recording a growth of 5.5% over the previous year.

Sales volume growth on an organic basis* was 4.6% in the year. Fourth quarter sales volume was down slightly compared to a year ago, due to the effects of a sharp economic slowdown in the region of Efes’ activities combined with the strong base of last year.

In 2008, EBI’s consolidated net sales revenue increased by 24.1% year on year and reached US$1,038.0 million. Net revenue per hl increased by 17.7% on the back of local currency price increases.

On an organic basis (by excluding the effect of Georgia and Serbia), EBI’s consolidated net revenue growth was 20.8% in the year.

The negative impact of commodity price inflation (especially malt and PET packages) combined with the slowing sales volume growth in the second half of the year resulted in EBI’s cost of sales per hl in 2008 to increase 25.9% over the previous year. Accordingly gross profit margin contracted to 40.9% from 44.7% in 2007.

EBI’s general & administrative expenses ...More Info

Anheuser-Busch InBev, the world’s largest brewer, will spend initial US$40 million this year to complete the first phase of a new brewery project in China, China Knowledge cited a local Commercial Bureau on April, 8.

The Belgian brewer has chosen as site for its new unit Fengnan District, Tangshan City, Hebei Province, it is reported.

According to sources, when the first phase of construction is complete, the facility will have a beer production capacity of 310,000 tons.

The company plans to invest a total of US$80 million in the project, which will cover 160,000 square meters.

The new facility will replace the downtown brewery, which AB InBev has agreed to close in accordance with the local government's plans to develop the city's downtown as a primarily commercial and residential area.

San Miguel Brewery said its first-quarter net profit rose 8 percent from a year earlier to 2.66 billion pesos ($55.5 million), aided by cost cuts and stable raw material prices, Reuters reported on April, 8.

The beermaking unit of San Miguel Corp, Southeast Asia's biggest food and drinks firm, said January-March net sales revenue stood at 12.43 billion pesos, marginally higher than the same period last year.

Despite weak economic conditions, operating income during the first quarter amounted to P3.80 billion ($79.17 million), a slight increase from the same period last year.

SMB recently completed a record-breaking P38.8-billion ($808-million) bond offering — the largest debt ever offered by a corporate issuer in the Philippines — to purchase the domestic beer brands and lands assets from its parent company SMC.

"As brand owner, SMB would be able to maximize the use of existing brands, at the same time, develop its own brands that would cater to varied customer needs," the beer unit said.

The opening ceremony of SUN InBev’s Angarsk brewery has taken place on April, 7, the company reported on the same day.

The Protocol to the Agreement on social and economic cooperation with the Government of Irkutsk region was signed during the ceremony. The document sets cornerstone principles of mutually beneficial cooperation of both parties in the field of realization of investment, production and social projects.

The Company started construction of Angarsk brewery in 2006. Since then the investments to the project exceeded 150 mln euro. Actual capacity of the plant is 1.8 mln hl and it is already producing such brands as Sibirskaya Korona, Klinskoye, Tolstyak, Zolotaya Angara.

Speaking at the press-conference during the ceremony, the head of SUN InBev Mr TunÇ Cerrahoğlu stated: “Angarsk brewery is the eastern outpost of SUN InBev in Russia. The new enterprise is mainly focused on meeting the demand for high quality beer in Central, Eastern Siberia and Far East. And it is a huge region with prospective opportunities.”

SUN InBev OJSC is the Russian subsidiary of the Belgium-based world’s largest brewer Anheuser-Busch InBev.

According to media reports, the world’s largest brewer, Anheuser-Busch InBev is in talks with Heineken to sell its Czech unit, Pivovary Staropramen, Trading Markets posted on April, 6.

The companies declined any comment on the report.

The Belgian brewer needs to raise proceeds in order to repay debt related to the acquisition of Anheuser.

Pivovary Staropramen, which is the second-biggest brewery in the Czech Republic, has been valued at CZK5 bln - 6 bln (USD255 mln -306 mln; EUR189 mln – 226 mln).

Almost exactly a year ago, Heineken’s takeover of the Czech Drinks Union brands was given the green light. That move pushed Heineken into third place on the Czech market, just ahead of the legendary Budweiser Budvar, but still lower than Heineken’s traditional market share. At the time, analysts sagely noted that Heineken doesn’t enter a market to take third place.

By purchasing Staropramen — and thus the group’s other brands Braník, Měšťan, Ostravar, Kelt, Velvet and Vratislav — Heineken would move to a very solid second place behind SAB Miller’s Pilsner Urquell group, standing roughly three times larger than still-state-owned Budweiser Budvar in third place (with around 30% of the Czech market vs. about 10%). It would combine the ...More Info

Compania Cervecerias Unidas SA (CCU), Chile’s largest brewer, reported on April, 7 its preliminary first quarter consolidated volumes.

In Chile, beer sales fell 4.0% on the year to about 1.5 mln hl, CCU said.

Argentina, which accounts for about a quarter of consolidated volumes, saw a 31.5% jump in beer sales during the period (to about 1.12 mln hl).

The company said it plans to release its consolidated first quarter results by the last week of April.

CCU is a diversified beverage company operating principally in Chile and Argentina. CCU is the largest Chilean brewer and the second-largest Argentine brewer.

The company has licensing agreements with Heineken Brouwerijen B.V., Anheuser-Busch Incorporated, Paulaner Brauerei AG, Guinness Brewing Worldwide Limited, and other beverage companies.

Earlier this week, market observers said they could not report any market action concerning malt.

According to sources, malt prices for 2009 are somewhere between EUR 300,- and 330,-, depending on location and sales book of the offering party.

Russia would certainly sell well below EUR 300,-, FOB Baltic Sea ports, in bulk in vessel. This price, however, is meaningless, as there are no buyers, experts state.

New crop prices for delivery in 2010 are around EUR 340,- and 350,- in domestic markets, and somewhere around 350,-, FOB in bulk in container.

Most brewers will not buy yet, because they fear the effects of the recession. However, the above prices will probably prove to be very attractive in retrospect, they can hardly be lower, but certainly higher in case of an improved economy, good summer beer sales or crop problems, analysts said.

Obolon, one of Ukraine’s leading brewers, may start to export malt produced at its Khmelnitsk malthouse next year, Valentina Mikusevich, Obolon’s quality assurance director, was quoted as saying by RBC-Ukraine on April, 6.

“At the moment we produce high-quality malt just for our needs. In future, we plan to procure more barley and sell our malt abroad. We have received several proposals to export our malt to Slovenia, Germany, and Russia,” Ms Mikusevich said.

She noted that Obolon’s malting capacity is about 120 thousand tonnes per year. Thus, subject to its own malt needs, the company may export about 30 thousand tonnes.

The malthouse in Khmelnitsk region was launched in 2008. Obolon’s total investments in the plant amounted to UAH500 mln.

According to the latest estimates, EU’s barley surplus is to amount to 23.8 mln tonnes in the crop year 2008/2009, analysts communicated earlier this month.

The exports of barley and malt in the current season are expected to amount to 6.5 mln tonnes. About 1.0 mln tonnes of barley are forecast to be purchased for intervention stocks. The carryover stocks are expected to amount to 8.0 mln tonnes, leaving an unaccounted surplus of 8.3 mln tonnes.

As reported by industry participants, markets of feed and malting barley reacted to the unsaleable oversupply; feed barley is either tendered to intervention, so far close to half a million tons, or is marketed at prices between EUR 95,- and 100,-, which is at or below the intervention price.

EU feed barley is not competitive in world markets, because intervention protects EU markets from dropping much below the 100 Euro level.

As from the marketing year of 2010/11, barley intervention will cease to exist.

Export licences of 130,000 tons in March were booked – to a large part – for malting barley shipments to China. Feed compounders purchased very small quantities in March, they are running down their stocks as consequence of the economic crisis and a difficult credit situation.

Only 30% of the intended spring barley acres have been planted in Ukraine, industry sources informed at the end of last month.

In the black soil area of Russia, seeding just started, it is reported.

Lower yields than last year are likely, because of later planting dates, less usage of certified seed, less fertilizer and other input.

The carry-over of old crop barley will be substantial so that the Black Sea countries will remain aggressive exporters, experts state.

EU’s malting barley market is plunged into depression, market sources reported this week.

Analysts expect an unsold carry-over above 1 mln tonnes by the end of the crop year, which represents an additional one to one and a half months supply beyond the normal carry-over stocks.

Relief came from exports of an estimated 600,000 tons to third countries, two thirds of it to China. Nevertheless prices dropped to unrewarding levels, endangering the production of malting barley in 2009 and beyond, it is reported.

Old crop markets are (for small volumes only) French barley, basis July, FOB Moselle: 6rw EUR 105,-, 2rs 112,-, German 2rs, April, delivered maltings EUR 130,- to 135,-.

New crop prices have also come under much pressure during the month, as industry and trade abstained from buying. Price levels are: French, basis July 2009, FOB Creil 6row Esterel/Aruzel EUR 120,- Cervoise 110,-, 2rs Sebastian 137,-.

The premium for the parity Moselle is only EUR 6,-/7,-, for delivery in Jan/June EUR 2,- (apart from the carrying charge). Danish 2rs, Oct 2009, FOB seaport, is quoted at EUR 145,-, U.K. 2rs, same position, 143,-. German 2rs, delivered maltings, ex harvest, EUR 145,-, Oct 160,-.

China’s barley imports totalled about 203,000 tonnes in January – February this year, industry observers communicated earlier this month.

According to sources, China imported 103,000 tonnes of barley from Canada, 64,000 tonnes – from France, and 36,000 tonnes - from Australia.

As Chinese farmers were disappointed by malting barley markets, a smaller barley acreage seems possible for 2009, experts inform.

Croatia and Serbia have undertaken to respect the requirements established by the European Commission regarding trade in hops and hop products, the executive body reported on April, 1.

The two nations agreed to create each an authority of which the principal function will be dealing with certification issues.

Stephen T. Russell, R. Paul Singh and Charles W. Bamforth

Abstract:
J. Inst. Brew. 114(4), 349–356, 2008 Without consideration of feasibility from perspectives of quality, acceptability to producer or consumer or legal and taxation implications, we have explored the relative cost and environmental implications of new paradigms for the production of beer. An approach based on the flavouring of a purchased bland alcohol source is the most advantageous from this perspective, followed by one based on the in-house fermentation of a sugar syrup. When compared to the conventional process, these processes provide a range of 2.8 to 73.1% savings for the parameters analysed, which were energy and water usage, carbon dioxide production and effluent production. The largest savings are observed for the water usage parameter, while the smallest difference is seen for specific energy consumption. Key words: Brewing, carbon dioxide, comparison, cost, effluent, energy, new paradigms, water. Load full article, 8 pages, 1121 Kb, PDF file