Anheuser-Busch InBev is seeking binding bids by mid-July for its Central and Eastern European operations, after CVC Capital Management sent the brewer an unsolicited approach for the businesses, Dow Jones cited people familiar with the situation on June, 23.

The London-based buyout shop approached the brewing giant with an offer triggering an auction process to get what the company hopes is a "fair" and "best" price, sources said.

Other sponsors interested in the assets include U.S. private equity firms Kohlberg Kravis Roberts, TPG and Warburg Pincus, along with CVC's local rival Cinven Group Ltd., people said.

The auction is unlikely to attract many strategic buyers, people said.

However, Efes Breweries International N.V. has expressed interest, people said, and SABMiller PLC may also be interested but could have antitrust issues in the Czech Republic.

Other trade players such as Carlsberg A/S and Heineken Holding N.V. are digesting acquisitions and trying to pay down debt, which may prevent them from bidding.

The process is being run under a tight timeframe with information packages due out within the next week or so, the people added.

Analysts said that a sales price of EUR2 billion just for AB InBev's Central European business, excluding Russia and Ukraine, would be reasonable. ...More Info

Molson Coors Brewing Co. President and Chief Executive Officer Peter Swinburn said the company is willing to take on more debt for an acquisition of “reasonable” size, should the opportunity arise, Bloomberg reported on June, 23.

“We’re willing to leverage up on any deal that we think is attractive and gives us a return,” Swinburn said. “We’ve got capacity to make certain acquisitions.”

Molson Coors, which makes Blue Moon beer, could also sell shares to help fund a purchase, he said. The company, which raised its quarterly dividend last month, had $1.57 billion of long-term debt as of March 29 and forecasts free cash flow exceeding $500 million this year. It has $300 million of 4.85 percent bonds coming due in September 2010.

Molson Coors, the biggest brewer based in North America, was created in a $3.4 billion merger between Adolph Coors Co. and Canada’s Molson Inc. in 2005. The brewer’s international expansion has focused on bolstering sales of Coors Light in Asia, Western Europe and Latin America. The brand sells at a higher profit margin in some overseas markets. Swinburn said he’d consider any purchase that reinforces existing operations.

Swinburn declined to specify the size of a potential acquisition, particular companies ...More Info

Danish brewing giant Carlsberg Group is selling its German brewery in Braunschweig, the company’s German communication officer, Udo Dewies, was quoted as saying by the daily Børsen on June, 22.

“We are negotiating with several potential purchasers. The negotiations progressed further last week, but I cannot say how close we may be to a conclusion,” he said.

The announcement came shortly after Carlsberg’s divestiture of its Norwegian brewery Arendal. Carlsberg had earlier said that it intends to shut down breweries at Leeds in UK and at Pori in Finland.

The sale of the German brewery is part of Carlsberg’s adjustment strategy in Europe. Here some breweries are strategically important while others are support breweries which will, in the longer term, be shut down.

The British analyst Mathew Webb at Cazenove has earlier estimated that Carlsberg could save DKK 400-50 million annually if the brewery shuts down seven of its so-called support breweries – including the Braunschweig brewery.

Asahi Breweries Ltd. will expand its Chinese sales force and production capacity dedicated to the Tsingtao Beer brand, the Wall Street Journal cited a Nikkei report on June, 19.

Asahi acquired a roughly 20% stake in China's Tsingtao Brewery Co. from the Belgian AB InBev in April. About 150 salespeople at an Asahi joint venture with Itochu Corp. specializing in Yantai Beer will be transferred to Tsingtao Brewery, bringing the sales force there to 300.

And the Asahi-Itochu venture plans to start producing Tsingtao Beer on a subcontracting basis in addition to its Yantai brand. Asahi will also increase its sales network to a total of 300 firms there by the end of the year.

Asahi entered the Chinese beer market in 1994 and has invested in local brewers because the region holds promise of offsetting the shrinking domestic demand. But Asahi suffered a 2.7 billion yen operating loss on Chinese sales of 13.3 billion yen in 2008. By shifting focus to Tsingtao Beer, Asahi aims to quickly beef up its presence there.

Efes Breweries International N.V. (“EBI”) announced on June, 19 that the General Shareholders' Meeting of Moscow Efes Brewery (“MEB”), EBI’s operating subsidiary in Russia, resolved to increase MEB’s share capital through issuance of additional shares of up to 455,729,167.00, amounting to USD200,000,000.

EBI currently holds directly, indirectly or economically 91.2% of MEB. Remaining shares are owned by the European Bank for Reconstruction and Development (“EBRD”), and both EBI and its subsidiaries as well as EBRD would participate to the capital increase and no change in the shareholding structure is expected post capitalization.

MEB will utilize the main portion of the proceeds of the capital increase to pay down its debt to EBI in the amount of USD148,000,000, stemming from the restructuring in Russia and the balance will be used to pay down some of MEB’s short term bank borrowings in Russia.

With a new South African brewery producing the brands of Heineken NV and Diageo PLC about to come on-stream in the next few months, SABMiller PLC faces a major threat to its long-term sales and profit margins in its home market, particularly in the important premium segment, the Wall Street Journal published on June, 22.

The new brewery will allow Heineken and Diageo to brew, rather than import, brands such as Heineken Pilsner, Guinness and Amstel, cutting costs dramatically and allowing the companies to make a play for serious market share.

SABMiller appears outwardly relaxed about the increased competition, but the fact it's increasing investment in South Africa suggests it's taking the threat seriously.

South Africa is SABMiller's home market, and while it's relatively low-growth, the company's near monopoly position - it still controls almost 90% of the South African market - has made its South African operations a reliable cash generator for the world's number-two brewer, accounting for 25% of total operating profit in the last financial year.

SABMiller's dominance in South Africa first came under threat two years ago when it lost a license to brew Heineken's Amstel brand after a legal dispute. SAB had been brewing and distributing the ...More Info

AB InBev’s Bulgarian brewing subsidiary Kamenitza AD reported a 16.5% increase in sales to BGL117.7 mln in 2008, Investor.bg communicated on June, 22.

The brewer’s net profit dropped by 93% to BGL1.15 mln due to investments amounting to BGL15.1 mln. This year is expected to see about BGL31.4 mln allocated for sales, administration and production needs.

Sales of the flagship Kamenitza beer grew 4% to 932 thousand hl as compared to 2007. The brand’s market share increased by 1.4 percentage points to 18.1%. The Astika brand market share grew by 0.6% to 2.6% last year. AB InBev’s international best seller Stella Artois enjoyed a sales growth of 12.9% over the reporting period.

Kamenitza AD exports around 1% of its production. The company’s exports decreased by 23% in 2008 due to a change of partnership in Macedonia.

Czech state-owned brewer Budejovicky Budvar NP's production rose 4.75% on the year in 2008 to 1.31 million hectolitres, Dow Jones reported on June, 24.

Budejovicky Budvar's 2008 domestic sales rose 9.7% on year to 731,059 hectolitres, the company said, adding Czech brewers overall produced 0.5% less beer in 2008 than a year earlier, while Czech beer sales contracted 1.3% on the year.

The company said exports fell 0.9% on the year to 581,518 hectolitres, though that is still Budejovicky Budvar's second best export volume ever following the 5.8% annual increase to 587,000 hectolitres in 2007.

The brewery is located in Ceske Budejovice, called Budweis in German, and its beer is known in dozens of countries around the world by its Budweiser brand, while in the Czech Republic the beer is sold as "Budvar."

Anheuser-Busch InBev NV holds exclusive rights to the Budweiser trademark in the U.S., though elsewhere around the world the Budweiser trademark belongs to one or the other breweries, depending on local court rulings, dozens of which are ongoing.

The Czech government elected in October will decide whether or not to continue with the planned privatization of the brewery and its trademarks.

World trade in barley malt in 2008/09 (July/June) is estimated at 6.2 mln tons (grain equivalent), 150,000 tons less than previously forecast and 2% below last year’s figure, the International Grain Council communicated in a report on May, 29.

Although trade has been underpinned by rising beer demand in parts of Latin America and Africa, the global economic slowdown, and resulting drop in disposable incomes, has restricted growth in beer demand in some countries. Reduced purchasing power has also prompted a switch to lower-priced beer, often for at-home consumption, which typically has a reduced malt content compared to premium brands. In some instances however, beer sales appear to have risen as a substitute for higher-priced wines and spirits.

Due to a slow pace of purchases to date, the forecast of malt imports by Russia is trimmed to just 100,000 tons, almost half the previous year’s and compared to over 800,000 in 2001/02. Although increased domestic malting capacity has led to a sharp contraction in malt imports in the past seven years, the economic crisis and rising excise duties have further lowered malt demand, with domestic beer production in 2008 reported to have declined for the first time since 1996.

Malt shipments to Far ...More Info

According to IGC’s World Grain report published on May, 29, world barley production in 2009/10 is forecast to fall to 144.6 mln tons despite a 1% increase in area.

World barley production is to fall 7% below last year’s record, when yields were exceptionally high, IGC said.

Due to unfavourable weather, the EU production forecast was reduced by 1.8 mln tons, to 61.1 mln (65.5 mln in 2008/09), but the outturn is still above average. Planted area is forecast to decline by 4%, with lower spring barley sowings in Denmark, Germany and Spain.

Despite some beneficial May rains, prospects in Hungary and Romania worsened after a lengthy warm and dry spell, and production forecasts for both countries are reduced, to 1.1 mln tons (1.5 mln in the current marketing year) and 1.0 mln (1.3 mln), respectively.

Dry conditions also affected yield potential in central regions of Spain, where production is forecast 0.6 mln tons lower than before, at 8.7 mln (11.1 mln). In contrast, a return to dry weather boosted spring barley plantings in the United Kingdom, the crop forecast is placed at 6.5 mln tons (6.1 mln).

Yields in Russia and Ukraine are projected to be well below last year’s exceptional levels. ...More Info

World barley production is forecast to fall by 9 mln tonnes in 2009-10 to 145 mln tonnes, according to the latest Australian Commodities report by ABARE.

The majority of the forecast decline is expected to be in the Russian Federation and the Ukraine. Yields in these two countries in 2008-09 were around 30 per cent higher than the five year averages, ABARE said.

Barley prices in the Russian Federation have fallen significantly throughout 2008-09 because of an increase in supplies. At the beginning of the 2009-10 season, Russian domestic barley stocks were around 4.8 million tonnes, compared with 736,000 tonnes at the start of the 2008-09 season. The lower domestic prices are expected to lead to lower area planted to barley in 2009-10. Assuming a return to average yields in the Russian Federation, barley production is forecast to fall by 31 per cent to be around 16 million tonnes in 2009-10.

Barley production in the Ukraine is forecast to decline by 25 per cent to be 9.5 million tonnes in 2009-10. Despite a forecast increase of 8 per cent in area planted to barley, yields are expected to be significantly lower as the authorities in the Ukraine have reduced support for farm inputs ...More Info

The estimates of France’s barley exports to other EU nations have been revised upwards to more than 3.7 mln tonnes (+ 125,000 tonnes on last month) in 2008/09, FranceArgiMer communicated in its latest report on June, 10.

Estimates of French barley exports to third countries have also been increased to about 1.25 mln tonnes (+50,000 tonnes on last month’s forecast).

Ending barley stocks are not expected to reach 2 mln tonnes in the 2008/09 crop year.

Alsace hops growers will gather in the crops from only 450 hectares this year whereas the region’s 2008 hop acreage was 760 hectares, DNA reported on June, 20.

Local farmers have decided to uproot the plantation on 320 ha, or 42% of the total acreage, due to the loss of their principal customer. As previously reported by E-malt.com, Anheuser-Busch, now part of the Belgium-based world’s leading brewer AB InBev, has terminated its contract with Alsace hops producers.

Junguang Hao, Jianjun Dong, R. Alex. Speers, Wei Shen1, Lianju Shan, Wei Fan, Qi Li, Guoxian Gu and Jian Chen

Abstract:
J. Inst. Brew. 114(4), 322–328, 2008 The secretion of proteinase A (encoded by PEP4) from brewer’s yeast is detrimental to the foam stability of unpasteurized beer. The aim of this study was to construct mutants of the allopolyploid Saccharomyces carlsbergensis strain TT, which were partially or completely deficient in proteinase A activity. Allelic PEP4 genes were consecutively disrupted by using the Cre-loxP recombination system combined with PCR-mediated gene disruption. A single PEP4 deletion mutant TT-M was successfully constructed. However, no viable mutant could be obtained when the second allelic PEP4 gene was deleted. The brewing performances of the parent strain and the modified strain were compared on a 100 L pilot fermenter scale. Proteinase A activity in fermented wort brewed with mutant strain TT-M was significantly lower (p<0.05) than that of the parent strain TT, whereas no significant difference on either maltose or maltotriose assimilation (p>0.05) was found. The mutant TT-M remained genetically stable, as shown by diagnostic PCR, after re-streaking for 20 generations. The flavor and taste of the final fermented wort, brewed with the mutant strain TT-M, was evaluated by the Tsingtao expert sensory panel, and found to be comparable to that of the parent strain and exhibited no distinct defects. The flavor component profiles of these two finished products were also comparable. The study demonstrated allelic genes in polyploid industrial yeasts could be efficiently and consecutively deleted by the retractive primer disruption strategy, and the mutant of Saccharomyces carlsbergensis partially deficient in proteinase A contributed to an improvement in foam stability. Key words: Beer foam stability, gene disruption, PEP4, Proteinase A. Load full article, 7 pages, 1348 Kb, PDF file