Base Currency: Euro, EUR on 17-September-2004 1 EUR = 1.2195 USD 1 EUR = 0.6797 GBP 1 EUR = 1.5744 CAD 1 EUR = 1.7450 AUD 1 EUR = 133.55 JPY 1 EUR = 3.5183 BRL 1 EUR = 35.646 RUB	Base Currency: US Dollar on 17-September-2004 1 USD = 0.8204 EUR 1 USD = 0.5574 GBP 1 USD = 1.2910 CAD 1 USD = 1.4309 AUD 1 USD = 109.55 JPY 1 USD = 2.885 BRL 1 USD = 29.23 RUB
EUR/USD Chart

Canada, Montreal: Adolph Coors Company and Molson Inc. announced on Friday September 17 that Coors has filed a preliminary proxy statement pursuant to U.S. securities regulations with the Securities and Exchange Commission (SEC) in connection with the companies' previously announced merger of equals. Molson will file the final proxy statement with Canadian securities regulators at a later date, once the SEC has approved the Coors filing. On July 22, 2004, Molson and Coors announced a definitive agreement to combine in a merger of equals. The company will be called Molson Coors Brewing Company and will be the world's fifth-largest brewing company by volume, with combined beer sales of 60 million hectoliters, or 51 million barrels, and a strong foundation of established brands in four of the world's top eight beer markets. The combination is expected to unlock significant value for shareholders. From the outset, value creation will come from both the ability to focus marketing investments on core brands to grow revenues and the ability to capture an expected US$175 million in annualized synergies, half of which are expected to be realized within the first 18 months following completion of the merger. Secondly, a stronger overall financial platform will lead to deeper support of core brands and key markets to drive revenue, share and volume growth. Finally, the merger will create the scale and balance sheet strength to allow Molson Coors Brewing Company to compete more effectively in the increasingly global and highly dynamic brewing industry long-term. Leo Kiely, chief executive officer of Coors, stated, "Today's filing of the preliminary proxy is an important step in the merger process. We look forward to continuing to demonstrate to our shareholders the compelling nature of this transaction, notably its ability to create shareholder value on a sustained basis. I'm confident in our ability to achieve our goals for the new organization, and I am excited to work with a strong management team that represents a balanced combination of talent from both organizations." Daniel J. O'Neill, chief executive officer of Molson, stated, "Through the capture of US$175 million in synergies, all of which will be taken to the bottom line in the first three years, this transaction will result in a 24 percent increase in pro forma profitability above current base-line trends. Given the combined company's significant cash flow and strong balance sheet with relatively low debt levels, we will also have the financial resources to make the investments necessary to ensure the ongoing strength of our brands." The Molson Coors Brewing Company will apply to list its shares on the New York Stock Exchange and the Toronto Stock Exchange. The proposed combination is a merger of equals as reflected in the combined company's board and share structure, management and dual headquarters. ...more info

Russia: SUN Interbrew Limited, a leading brewer in Russia and Ukraine, announced on September 16 its financial results for the second quarter and first half ended June 30, 2004. The successful results of the second quarter and first half 2004 reconfirm the strong momentum of the Company in both countries - Russia and Ukraine, the company said in a statement. Below are the key achievements, which strongly support the growth trend over the last several quarters: In the second quarter 2004 beer volumes were up 17.5% compared with the second quarter last year and reached 5.8 m hl. Over the first half 2004, beer volume grew by 28.3% versus the first half 2003. Second quarter Net Sales increased by 47.8% versus the second quarter 2003 and first half 2004 Net Sales 52.5% against the first half 2003. EBITDA increased by €14.3m or 37.9% in the second quarter 2004 versus the same period in 2003 and reached €51.9m. Excluding the negative currency impact, organic second quarter EBITDA was €54.0m. EBITDA for the first half 2004 was €69.1m, or 52.8% higher than in the first half 2003. EBIT for the second quarter 2004 increased by 56.7% versus the second quarter last year. For the first half 2004 EBIT increased by 93.8% compared with the first half 2003. Net Income comprised €21.8m in the second quarter, 88.7% higher than in the same period last year, which represents the highest result in the history of the Company. Over the first half 2004 Net Income was €20.0m, an increase of €15.5m versus the first half 2003. “We continue to successfully implement our growth strategy based on the following key drivers: highly efficient distribution, focus on higher margin brands, operational excellence, brand and packaging innovations. All these factors made significant contributions to the strong performance in the second quarter and over the first half 2004,” the company said. “We have also continued to pick up further market share. In the second quarter 2004 we increased beer sales in Russia by 23.7%, which resulted in an increased market share of 16.7% in the second quarter 2004 compared to 14.8% in the second quarter last year. Market share for the first half 2004 increased to 16.4%, versus 14.0% for the first half last year.” ...more info

Japan: Asahi Breweries. Ltd., which makes Japan's best-selling Super Dry Beer, expects record profit in the current year and may raise its dividend from 2005, Shigeo Fukuchi, company chairman, said, according to Bloomberg. “We will surely exceed our full-year profit target,'' Fukuchi said during an interview for Bloomberg Television on September 16. The company's profit is nearly six times higher than in 1999, and its August forecast for the year ending Dec. 31 was for 28 billion yen profit, up 7.7 percent from an earlier forecast of 26 billion yen, on sales of 1.44 trillion yen. “The company, especially the beverage segment, is becoming more profitable,'' Fukuchi said. The company's profit margin, which divides profit by sales to measure profitability, grew almost six times to 1.7 in the past five years. Asahi Breweries said in August that it may generate 200 billion yen ($1.8 billion) in cash flow over the next three years from this year, and Fukuchi said the money will be used on expansion and higher dividend payments for the year ending December 2005 and again in 2006. The current dividend is 15 yen a share. “My company said earlier we will spend 60 billion yen on dividend payments over three years starting this year, and that plan has not changed much since then,'' Fukuchi said. Taizo Demura at Morgan Stanley Japan Ltd. is among analysts who said Asahi Breweries is likely to spend 20 billion yen a year from 2004 to pay. “We predicted that the company will pay 15 yen full-year dividend for the three years starting this year, but now we estimate that it will pay 17 yen next year and 20 yen in the year ending December 2006,'' Demura said in a report on Asahi Breweries. Demura raised his rating of the company to overweight from equal-weight earlier.

Hong Kong: SABMiller Plc, the world’s second-largest brewer, said its Chinese venture bought three unprofitable breweries in China from Lion Nathan Ltd for US$71mil in cash. SABMiller said China Resources Breweries Ltd would assume about US$83mil of debt. The London-based brewer is pursuing acquisitions in China and rolling out its brands there after losing a bid for China’s Harbin Brewery Group to larger rival Anheuser-Busch Cos. in the biggest beer-producing nation, according to Bloomberg’s report from September 16. “Foreign brewers are going more for market share than profit in China,” said Jason Cheung, an analyst at Nomura International Hong Kong Ltd. “The Chinese market is largest but fragmented, making it hard for brewers to make money.” Overseas brewers face about 500 local rivals in China’s market, which is divided by cultures, tastes and incomes. The 10 biggest brewers controlled 53% of the market last year, compared with 22% in 1996, according to Canadean Ltd, a beverage research company based in Basingstoke, England. Lion Nathan, Australia’s second-largest brewer, put its Chinese business up for sale in July after seven years of losses in a market that’s tripled in size since 1992. “Once you’ve decided that there are no prospects for making money in China, that there are no prospects for earning your cost of capital in the medium to long term, you should exit,” chief executive Gordon Cairns said in a telephone interview in Sydney. Overseas brewers have been battling for market share, betting Chinese consumption averaging 19 litres a person will rise along with incomes in the fastest-growing of the world’s top 10 economies. Lion Nathan has never made a profit in China, where the company’s three Yangtze River Delta brewers had less than 1% of the market.

UK: The Boddingtons Action Group is being resurrected as trade groups attempt to save the Strangeways Brewery in Manchester. Brewing giant Interbrew’s announcement of the closure of the brewery after 250 years has led to outcry from industry groups and trade unions, The Publican posted on September 16. Now the Campaign for Real Ale (CAMRA) has confirmed it will be looking to resurrect the Boddingtons Action Group. A spokesman said: “Our main mission is to prevent the brewery from closing. We want to link up with different organisations including local media and the unions.” The group was first formed in 1989 when Whitbread bought Boddingtons, which was still a family brewery. It then played a major role in thwarting Interbrew’s plans to close the Strangeways Brewery in 2002. Last Tuesday workers at the brewery went on a 24-hour strike after Interbrew reiterated plans to shut it down, hitting 55 jobs. Steve Cahillane, chief executive of Interbrew UK and Ireland, said the decision to close the Boddingtons brewery had been “extremely difficult”. Mike Benner, chief executive of CAMRA said: “We’re app-alled at this decision. Despite claims to be ‘the world’s local brewer’, Interbrew is riding rough- shod over British brewing.” The Transport & General Workers Union (T&G) has also voiced its alarm at the decision. Brian Revell, the T&G’s nat-ional organiser for food and agriculture, said: “Closure of smaller breweries counts for nothing as Interbrew concentrates production in ever-larger breweries. “This is all about the maximisation of profits.”

Germany: Inbev may become number one beer producer in Germany by purchasing more breweries in the country. That was the announcement made by CEO John Brock to WirtschaftsWoche magazine. He said: "If we find a strong brand that suits us, I will not rule out another acquisition.” Brock said the new brewing conglomerate born out of the merger between Interbrew SA and Brazil's Ambev aims to catch up with its US competitor Anheuser-Busch in terms of efficiency, AFX News said on September 15. "I see no reason why we cannot reach return on sales of 28 or even 30 pct over the next few years," he added. Inbev may find a second location to brew its Bremen-based premium brand Becks, possibly in Bavaria, he told the magazine.

Malt News

USA: Finding success in the export market will be a key to expansion of the International Malting Co. plant, a top official of the Milwaukee-based company said Thursday, September 16. While the beer market in the U.S. and Canada is growing slowly, markets in Russia, China, Mexico and Japan are expanding 5 to 10 percent annually. IMC's Great Falls plant, now under construction north of town, will play a big role in serving those markets, said Dale West, chief operating officer for IMC's North American operations, The Great Falls Tribune revealed. "We can grow from 12 million bushels to 16 million bushels very easily," West said, referring to the plant's projected production. An expanded plant could mean more jobs and, more importantly, added demand for malt barley grown in Montana, West noted. Employment at the $70 million plant is projected to peak at about 35 workers. West spoke to more than 100 people at a Great Falls Area Chamber of Commerce luncheon at the Heritage Inn. The gathering appeared to include a mix of area business people and agricultural producers. The IMC facility will be the first plant built by the company, which is part of the France-based Lesaffre Group. Being new should help the plant compete in world markets. "This will be the most efficient plant in the world; there is no question about it," West said. The IMC official said his company hopes to link Montana farmers with new customers, including brewers, distillers and food product makers. The company sells malt to Anheuser Busch, which also contracts with area barley growers. However, SAB Miller, another very large brewer, will become more involved in the Montana barley marketplace, West noted. "With a facility out here, you will meet the Miller people," West said. "We supply about 60 percent of their malt needs." IMC hopes, he said, to be able to buy all of the barley it needs to operate the plant in Montana. The plant will require about 11 million bushels of barley each year and will produce about 12 million bushels of malt. Responding to a question, West said if the plant has to resort to bringing barley from southern Idaho to Great Falls "that means we've got a big problem at the plant. The intent is to use North Dakota only as a secondary supply." ...more info

Barley News

United States Department of Agriculture (USDA) posted on September 13 world barley trade changes in 2004/2005. According to USDA Australia barley export is down 200,000 tonnes to 4.3 million tonnes as a result of increased competition from Ukraine. Canada barley export is down 200,000 tonnes to 1.9 million tonnes due to a diminished crop. Ukraine barley export expands by 500,000 tonnes to 3.3 million tonnes based on a larger crop. USDA also posted world barley trade changes in 2003/2004. According to USDA, Australia barley export in 2003/2004 is up 200,000 tonnes to 5.0 million tonnes based on a strong shipment pace. Russia barley export drops by 400,000 tonnes to 2.6 million tonnes as shipments slowed significantly in recent months. Ukraine barley exports increases by 300,000 tonnes to 1.6 million tonnes due to a strong pace and aggressive sales.

EBRD allotted EUR20 million loan to Soufflet’s branches in Russia, Ukraine, Romania and Kazakhstan for barley purchasing. Agro Perspectiva posted on September 17 that European Bank for Reconstruction and Development has decided to allot a short-term EUR20 million loan to company Soufflet’s branches situated in Russia, Ukraine, Romania and Kazakhstan for production development as well as barley purchasing, reports EBRD. Loan has been granted in frameworks of EUR65 million total project, targeted at financing of Soufflet Group’s programs. Soufflet is going to use obtained money for enhancing of its flour milling and beer production capacities as well as for barley growing in Central and Eastern Europe. Reportedly, Soufflet Group is one of biggest agrarian companies, owning 24 malthouses in France, Poland, Check Republic, Hungary, Romania, Kazakhstan and Russia. Soufflet Group has acquired Slavutskiy malting plant (Khmelnytska region) from Scandinavian company BBH. Slavutskiy malting plant is biggest in Ukraine; its production facilities are calculated upon yearly 120,000 tonnes barley processing and 70,000 tonnes malt output.

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 2003 are not quoted.

Malt Price Evolution

	Maximum average price for 2RS Malt, crop 2004: 270.50 EUR/tonne - in December 2003
	Minimum average price for 2RS Malt, crop 2004: 238.50 EUR/tonne - in August-September 2004
	Maximum average price for 6RW Malt, crop 2004: 252.50 EUR/tonne - in December 2003
	Minimum average price for 6RW Malt, crop 2004: 226.50 EUR/tonne - in August-September 2004

Source: E-malt.com

Malting barley prices. French barley prices.

Nominal prices.

EURO = USD 1.2195 September 17, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	nq	nq	111.00	135.50
2RS	Prestige	nq	nq	110.00	134.50
2RS	Cellar	nq	nq	110.50	135.00
2RS	Aspen	nq	nq	109.50	133.50
2RS	Optic	nq	nq	109.50	133.50
2RS	Astoria	nq	nq	109.00	133.00
2RS	Cork	nq	nq	109.00	133.00
6RW	Esterel	nq	nq	100.00	122.00

nq - Not quoted

Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

Table of the week

Estimate of EU Barley Crops (in thousand metric tonnes)   in '000 tonnes  WINTER  SPRING  TOTAL  Acreage Crop Acreage Crop Acreage Crop 2003  2004  2003  2004  2003  2004  2003  2004  2003  2004  2003  2004   EU Members  Austria  73  80  341  480  139  111  541  612  212  191  882  1,092   Belgium  30  34  205  245  11  6  66  37  41  40  271  282   Denmark   130  130  776  845  580  550  3,000  3,025  710  680  3,776  3,870   Deutschland   1,323  1,360  6,979  9,548  751  613  3,617  3,373  2,074  1,973  10,596  12,921   Spain  744  790  2,022  2,373  2,345  2,367  6,676  7,449  3,089  3,157  8,698  9,822   France   1,053  1,051  5,878  7,277  697  581  3,990  3,566  1,750  1,632  9,868  10,843   Greece  105  112  242  298  -  -  -  -  105  112  242  298   Ireland  17  13  131  95  169  161  1,022  1,058  186  174  1,153  1,153   Italy   310  310  1,009  1,130  -  -  -  -  310  310  1,009  1,130   Luxembourg 5  5  28  38  5  4  27  25  10  9  55  63   Netherlands 3  3  20  21  53  53  352  329  56  56  372  350   Portugal  10  11  12  18  -  -  -  -  10  11  12  18   Finland   -  -  -  -  530  564  1,697  1,813  530  564  1,697  1,813   Sweden   7  6  40  30  356  393  1,502  1,772  363  399  1,542  1,802   United Kingdom  456  422  2,851  2,659  622  612  3,518  3,550  1,078  1,034  6,369  6,209   Total old EU members 4,266  4,327  20,534  25,057  6,258  6,015  26,008  26,609  10,525  10,342  46,542  51,666   New EU Members  Estonia          132  135  263  256  132  135  263  256   Latvia          139  140  247  273  139  140  247  273   Lithuania          309  292  900  875  309  292  900  875   Poland  106  142  228  728  910  926  2,603  2,680  1,016  1,068  2,831  3,408   Cyprus 50  50  100  127          50  50  100  127   Czech Republic 86  116  440  594  464  353  1,628  1,862  550  469  2,068  2,456   Slovakia  20  19  150  86  220  205  682  834  240  224  832  920   Slovenia  14  16  39  68          14  16  39  68   Hungary  181  189  445  873  168  147  380  600  349  336  825  1,473   Total new EU members 457  532  1,402  2,476  2,342  2,198  6,703  7,380  2,799  2,730  8,105  9,856    TOTAL EU 4,723  4,859  21,936  27,533  8,600  8,213  32,711  33,989  13,323  13,072  54,647  61,522  Graph of the week Agenda September 2004: 6th BELGIAN BEER WEEKEND; China Brew 2004 / China Beverage 2004; International Brewery and Soft Drinks Industry Exhibition; FOOD & BEVERAGE PROCESSING & PACKAGING INDONESIA 2004; Pivoindustria International Beer Industry Exhibition; National Beer Wholesalers Show 2004; PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004; Barley Malt Quality Evaluation Short Course; EUROMALT BARLEY SEMINAR 2004; OCTOBERFEST Famous German Beer Festival; Agro + Food + Drink + Tech Expo Georgia Food, Beverages and Processing Equipment Trade Fair; bevex Beverage Trade Fair; InterBev 2004; YUGOSLAVIA INTERNATIONAL FAIR OF FOOD & BEVERAGES 2004; BevExpo 2004; Great American Beer Festival; October 2004: OCTOBERFEST Famous German Beer Festival; Great American Beer Festival; bevex Beverage Trade Fair. Germany; Great Welsh Beer & Cider Festival; ST. PETERSBURG FOOD SALON 2004; Beer Fair. Spain; Expo Bebidas Beverage Exhibition. Mexico; EXPOALIMENTOS Y BEBIDAS 2004. Panama; Fall Eastern PA Breweriana; Knoxville Brewer's Jam - A Memorial to Tom Rutledge; INTERPRODTECH Food and Beverages Processing Exhibition. Russia; Alko and Drinks Show Alcoholic Beverages and Non-alcoholic Drinks Exhibition. Russia; WORLD FOOD KAZAKHSTAN 2004; PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004. Canada; More events are available on site e-malt.com