Base Currency: Euro, EUR on 24-September-2004 1 EUR = 1.2275 USD 1 EUR = 0.6830 GBP 1 EUR = 1.5707 CAD 1 EUR = 1.7204 AUD 1 EUR = 135.89 JPY 1 EUR = 3.5364 BRL 1 EUR = 35.8676 RUB	Base Currency: US Dollar on 24-September-2004 1 USD = 0.8150 EUR 1 USD = 0.5564 GBP 1 USD = 1.2796 CAD 1 USD = 1.4015 AUD 1 USD = 110.73 JPY 1 USD = 2.881 BRL 1 USD = 29.22 RUB
EUR/USD Chart

Singapore: Asia Pacific Breweries Ltd. (APB), the brewer of Tiger Beer, said on Friday, September 24 the number of foreign banks suing its Singapore unit over more than $63 million in loans had risen to three, under the Reuters report. HVB, Germany's second-biggest bank, this week filed a suit against APB to recover $30 million from a loan. Sweden's Skandinaviska Enskilda Banken AB's (SEB) and Japan's Mizuho Corporate Bank Ltd. also filed suit for a total $33 million plus interest and costs, APB said in a statement. Lawyers for the two banks had said they would launch their suit this week. APB is at the centre of a scandal involving a former finance manager who was convicted of fraud in April. Chia Teck Leng was sentenced to 42 years in prison for falsely obtaining around $70 million in loans in the name of Asia Pacific Breweries (Singapore) Pte. Ltd. (APBS) from the Swedish, Japanese and German banks. Skandinaviska Enskilda Banken, Sweden's second-biggest bank, lost $25 million, while Mizuho Corporate Bank lost $8 million in loans to the APB unit, a lawyer at Rajah and Tann, a Singapore law firm acting for both SEB and Mizuho said. APB has rejected all three claims, blaming lapses in the banks' internal controls and accusing them of failing to detect and prevent Chia's acts of fraud. "APBS is confident of its position and will vigorously defend the claims in Court," said APB, which is 42.5 percent-owned by Dutch brewer Heineken NV. and 37.9 percent-owned by Singapore conglomerate Fraser & Neave Ltd. APB operates breweries from New Zealand and Papua New Guinea to China, selling Heineken, Anchor, Baron's and ABC Stout brands. APB shares were unchanged at S$7.45 on Friday morning in very thin volume.

UK: SABMiller PLC has options in mature markets for boosting its global spread, according to analysts. Recent press reports have said SABMiller PLC, the world's second-largest brewer, is in talks to buy Canada's Molson Inc., though both companies have declined to comment. Even if that deal doesn't go ahead, some analysts say SABMiller might still aim to increase its brand exposure in a mature market - rather than the emerging markets with their potential for faster growth, Dow Jones posted on September 23. Lehman Brothers reckons that because SABMiller is still tipped towards emerging markets, the acquisition of a further mature market beer company such as the U.K.'s Scottish & Newcastle PLC "cannot be ruled out." SABMiller, which is listed in Johannesburg and London, has its main operations in South Africa and the U.S. and a presence in other emerging markets, including China and Russia. It was created when South Africa's SAB bought Miller from Altria Group Inc.'s (M) Philip Morris in 2002. The company's only big brand in Western Europe is Italy's Peroni. SABMiller's Chief Executive Graham Mackay said the company isn't in a position where it has to make "a landscape-changing deal," but would evaluate opportunities on their merits. Lehman Brothers believes a deal in a mature market would "reduce the risk factor." Because SABMiller has high exposure in Africa, it's more at risk from currency fluctuations and political instability. "European beer companies have strengthened their growth profile by heavily investing in emerging markets...SABMiller came from the other direction," Lehman Brothers said. It estimates around 80% of SABMiller's earnings before interest and taxes come from emerging markets. "In order to lower the overall risk profile by moving towards a 50/50 mature/emerging balance, we believe the company may need to acquire assets in mature markets," Lehman Brothers said. However, SABMiller said it was "a gross over-simplification" to say that 80% of its earnings come from emerging markets. "You can't suggest that Zimbabwe and Poland display equal political and economic risk characteristics," the company said. Molson and Adolph Coors Co. announced a merger in July, though the deal has faced skepticism from some Molson shareholders. Now SABMiller is reported to be in talks with Ian Molson, a cousin of Molson chairman Eric Molson, and Canada's Onex Corp. about a possible joint offer for the Canadian brewer. However, Molson's existing joint venture with Coors could pose a problem for such a deal. Molson brews and distributes Coors Light in Canada, which is very profitable. Coors has said it will withdraw its brands from Molson if it enters a merger with another company. ...more info

Canada: Caisse de depot et placement du Quebec, Canada's largest institutional investor, denounced a Molson Inc. plan on Wednesday that would allow option holders to vote on its proposed merger with Adolph Coors Co., Reuters revealed on September 22. "Preliminary analysis of the terms of the deal relating to this proposed merger revealed certain elements we find worrying," Caisse chairman and chief executive Henri Paul Rousseau wrote in a letter to Molson's chairman, Eric Molson. Rousseau said he was concerned because the Montreal-based brewer's option holders were mostly company executives or board members, and might vote with their wallet in mind instead of shareholders' interests. The Caisse, which manages Quebec's public pension and insurance funds, was Molson's second largest institutional shareholder as of Dec 31, with 3.2 million Class A shares, or 3 percent of the total. The Caisse joins a growing number of funds that have lashed out at Molson since details of its merger plans were released last Friday. "It's about being fair to shareholders," said a spokeswoman with the Ontario Teachers' Pension Plan, which has a minority stake in Canada's oldest brewer. Another minority stakeholder, Jarislowsky Fraser Ltd., will join Teachers in challenging Molson when the brewer takes its merger plans to the Superior Court of Quebec for approval to proceed. "We really object to allowing the votes of option holders, who are executives of Molson and who have divergent views, to dilute the votes of public shareholders," Claude Lamoureux, the Teachers' Pension Plan chief executive, said in a statement released late Tuesday. "We will ask the court for changes to this scheme to protect the interest of all nonvoting shareholders who actually own over 80 percent of the company." The three funds also object to the "golden parachutes" that will be provided for executives, saying they are exorbitant and unnecessary because the executives will keep their jobs. "Such a dual compensation seems excessive at face value," Rousseau wrote. Teachers are asking other institutional investors to support their court action. Together, the group owned more than 25 percent of Molson's class A shares as of Dec. 31. The Molson-Coors merger requires approval of two-thirds of both Molson's class A nonvoting and class B voting shareholders. Molson class A shares fell 35 Canadian cents, or 1 percent, to C$32.65 on the Toronto Stock Exchange on Wednesday. Shares of Coors, the No. 3 U.S. beer maker, were down 35 cents at $67.31 in New York.

Denmark: Danish beer consumption fell 6.3% in the first half of the year versus the same period last year, Denmark’s media has recently reported. Domestic beer sales peaked in 1994 and have subsequently decreased slightly. However, in the same period border trade at the German/Danish border has dramatically increased. The total consumption of beer is therefore more or less unchanged in the last few years. In 2003 domesti beer sales reached 518.1 million litres versus 520.2 million litres in 2002. In 2003 Denmark exported 353.2 million litres of beer against 271.9 million litres in 2002. The Danish breweries export primarily to the Baltic, Poland, Russia and Italy. The main part of the Danish beer sold abroad is produced under licence, and is therefore not included in the export figures.

Russia: Yarpivo Co.’s volume of investments has exceeded USD 10 million, Russian Beer Union wrote on September 21. The aggregate investments volume of the “Yarpivo” group of companies into development and implementation of long-term ecological and industrial security program is going to exceed USD 10 million. The basic directions of the investments include construction and placing in service of sewage disposal plants and warehouses. Investments into construction of sewage disposal plants make up to USD 9 mln. The equipment of the Turkish Arbiogaz” Co. will be applied to their placing into service (construction of treatment facilities is designed to be completed by the end of 2004). The objective of constructing these sewage disposal plants is a full-scale purification of industrial sewage. The complete sewage cycle completed, the quality of water volumes will match the requirements applied to water quality at fishery water bodies. Placing into service of these facilities will unload the city sewage disposal plants of Moscow Unitary Enterprise “Yarvodocanal”, which are designed for refining of residential waters, but not of industrial wastes. By estimate of the Yarpivo Group of companies experts, no other industrial enterprise has sewage disposal plants of such a level. Another important direction of the investments is building of a depot for kieselgur storage. Investments put into building make up to USD 150 000. Building of a depot will enable to reduce the expenses, thanks to increasing the volume of purchases at lower prices.

Norwegian beer consumption made up of 5.4 million litres of in the first half of this year compared to the same period in 2003, according to new figures released by Statistics Norway (SSB) on September 23. The figures do not include Norwegian citizens' purchases abroad, the SSB said. The total registered consumption was 10.9 million liters of alcohol. Norwegians also consumed 3.3 million liters of wine, 2 million liters of spirits and 0.2 million liters of ' alcopops,' pre-mixed alcoholic soft drinks for the period. The figures are calculated on the basis of registered import and figures reported to the Directorate of Customs and Excise (TAD) by businesses that pay tax on alcohol sales. "Measured in pure alcohol, each person over the age of 14 drank 2.94 liters of alcohol during the first six months of 2004," the SSB said in its report.

Malt News

Belarus is not planning to import malting barley and unroasted malt this year, Belarus authorities announced on September 22. The tender on importing malt and barley was stopped according the regulations issued by the Belarus Council of Ministers. According to experts, this year Belarus prepared enough malting barley, which exceed twice the needs of national breweries. They also said that the quality suits the beer makers. This year up to 20 September there were purchased 154 thousand tonnes of barley (102.7 % of plan) that is 8 times more than in 2003. 13% of this barley is first class quality and about 87% second class. Approx. 91 thousand tonnes of barley was purchased by OAO Belsolod to produce malt. Belsolod is selling about 20 thousand of its malt to national breweries, which don’t have their own malting plants, the rest is exported, ProAgro mentioned in a statement.

Barley News

USA: American Malting Barley Association, Inc. (AMBA) announced on September 23, 2004 that AMBA officials are asking barley producers to closely monitor grain bin conditions over the coming months to help avert potentially costly losses. “The 2004 crop year has been a challenging one for growers in some regions, says AMBA President Michael Davis. “Rainfall during or just prior to harvest has made a substantial portion of the crop unsuitable for malting due to initiation of germination —pre-harvest sprouting— and high grain moisture that leads to heat, mold, or insect damage.” Davis indicated that further quality losses could occur to grain that went into storage with little or no outward appearance of having been adversely affected by late season precipitation. These quality losses nearly always lead to reduced germination levels, however, high germination rates are critical to producing usable barley malt. “It is often not possible to predict when or if these germination losses will occur, but grain that has gone out of condition often exhibits some embryo damage when examined by a simple pearling test,” says AMBA Vice President and Technical Director Scott Heisel, who notes that the test involves the visual examination of pearled grain. “The presence of any loose or missing embryos, or discolored kernels, are signs that the grain could be at increased risk of losing germination in storage,” he added. The AMBA is reminding producers who are storing 2004 crop malting barley that may have been rained on or harvested at higher than optimum moisture levels, to pay close attention to conditions in the grain bin. “Having grain tested for sprout or heat damage and/or periodically checking germination and moisture levels may help avert costly losses in storage,” Heisel says. “Further information and advice can be obtained from your county or state extension staff, or other agricultural specialist. The American Malting Barley Association, Inc. (AMBA) is a nonprofit trade association comprised of seven US brewers - Anheuser-Busch, Inc.; Boston Beer Company; Miller Brewing Company; Sierra Nevada Brewing Company, Inc.; City Brewing Company, LLC; The Gambrinus Company; Summit Brewing Co. and five malting companies - Briess Malt & Ingredients Company; Cargill Malt; GModelo Agriculture, Inc.; International Malting Company - U.S.; Rahr Malting Company. www.AMBAinc.org

Ukraine: Since the beginning of the new market year (July 1) until September 23 Ukraine exported 1.84 million tonnes of barley, according to State Customs Service of Ukraine. In August this year Ukraine exported about 500 thousand tonnes of barley at a value of US$ 43.6 that is three times more than in July. Ukraine shipped barley at a value of US$10.3 million to Saudi Arabia and at US$7.6 million to Israel, ProAgro posted on September 23. In July Ukraine exported 345 thousand of barley. It shipped barley at a value of US$ 4.2 to Saudi Arabia and at a value of US$2.9 to Israel.

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.

Malting barley prices. French barley prices.

Nominal prices.

EURO = USD 1.2275 September 24, 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	136.50
2RS	Prestige	nq	nq	110.00	135.50
2RS	Cellar	nq	nq	110.50	136.00
2RS	Aspen	nq	nq	109.50	134.50
2RS	Optic	nq	nq	109.50	134.50
2RS	Astoria	nq	nq	109.00	134.00
2RS	Cork	nq	nq	109.00	134.00
6RW	Esterel	nq	nq	100.00	123.00

nq - Not quoted Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

Table of the week

Canada: Barley Supply and Disposition   2002-2003  2003-2004 p  2004-2005 f    Harvested area (thousand ha)  3,348  4,446  4,265    Yield (tonne/ha)  2.24  2.77  3.02    Production (thousand tonnes)  7,489  12,328  12,900    Imports (thousand tonnes)  259  45  40    Total Supply (thousand tonnes)  9,795  13,847  15,046    Exports (thousand tonnes)  945  2,400  2,600    Food & Industry Use (thousand tonnes)  175  320  375    Feed, Waste, Dock. (thousand tonnes)  6,755  8,601  9,116    Total Domestic Use (thousand tonnes)  7,376  9,341  9,946    Ending Stocks (thousand tonnes)  1,475  2,106  2,500    Average Price (CA$/tonne)  171.88  136  110-130  p: preliminary estimates f: forecast, Agriculture and Agri-Food Canada, September 10, 2004 Source: Statistics Canada, Cereals and Oilseeds Review Series, Cat. No. 22-007

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