The most positive beer results have come so far from Africa (the whole continent), Brazil and China, sources communicated on July, 2.

Brazil has achieved a strong increase of 7 or 8% for the year, it is reported. China’s May output increased by 22% on last year’s level.

However, beer sales in Eastern Europe – CIS and the Eastern EU – are very weak, and the Western EU is not doing well, either. The Japanese output in May declined after two good months in March/April, but is still only 2% below last year’s level.

German beer sales fell by 7.4% in May and by 4% in the first five months of the year. France’s beer sales in January – May amounted to 5.8 mln hl (minus 6.9% yoy). Russian beer sales dropped by 7.4% over the reporting period.

Brewers are very apprehensive of the economic crisis and its consequences for beer markets. General caution plus the need to cut financing cost has led to a strong reduction of beer, malt and all other materials stocks in the breweries, to a point, where some of them could not deliver beer when ordered, industry sources reported.

As for the situation in the malting industry, ...More Info

Spain’s beer consumption decreased last year by 6% to 52 litres per capita, Cerveceros de España advised in its report on the results of 2008.

The drop in consumption is attributed to the impact of the current financial downturn as well as to unusually low temperatures in 2008. The economic crisis especially affected the Spanish beer consumption in bars, restaurants, and hotels, where the decrease was as much as 7.3%.

According to Federación Española de Hostelería (FEHR), beer consumption dropped by 3% in hotels and by 10% in bars and restaurants last year. Non-alcoholic beer accounts for 8.8% of total beer volume consumed in hotels, bars, and restaurants, and for 22% of beer consumed at home.

Total beer sales of the Spanish brewing industry decreased by 2% to 32.6 mln hl in 2008, thus breaking the period of continuous growth during the last several years. The drop in sales is explained by a 10% drop in the number of tourists who visited Spain in 2008, as compared to the previous year.

Sales of non-alcoholic beer registered a minor decrease (minus 0.1% as compared to 2007). In 2008, the Spaniards drank about 3.2 mln hl of non-alcoholic beer (13% of the nation’s total beer ...More Info

Kohlberg Kravis Roberts & Co (KKR) has reached a deal to unload half of the equity in Oriental Brewery to Affinity Equity Partners, two sources with direct knowledge of the process were quoted as saying by Reuters on July, 7.

Previously, KKR agreed to purchase Oriental Brewery, South Korea’s No. 2 beer maker, from the Belgium-based AB InBev for USD1.8 mln.

KKR is planning to complete its acquisition of Oriental Brewery (OB) from AB InBev during the current quarter, the top private equity deal in the first half according to Thomson Reuters data.

KKR and Affinity would become "half-half co-investors," although KKR would be in control of management and operations of the beer company, said one of the sources, who declined to be identified as they were not authorised to speak to the media.

The source said KKR was not short of capital but had agreed to bring in Affinity to jointly strengthen risk management at the brewery.

KKR’s decision to cut a deal with Affinity is likely to surprise the sellers and those dealmakers who expected it to run the company on its own.

However, so-called “club deals” are common in the private equity industry as firms seek to spread the financial burden and pool ...More Info

Carlsberg has temporarily closed one of its breweries in China over safety fears after recent ethnic clashes between the Muslim Uighur minority and Han Chinese majority in the Chinese autonomous province of Xinjiang, The Copenhagen Post reported on July, 8.

The unrest, which began on July 5, has left at least 156 people dead and more than 800 injured.

Sunny Wong, the head of Carlsberg’s China division, said that out of concern for their employees, the brewery in the Xinjiang capital of Urumqi has been closed for three days.

It is standard practice in China that employers provide transport to and from work places and Wong said it had become too dangerous to have employees travelling on buses through the city centre of Urumqi to the brewery.

He said the violence itself has not spread to the brewery and none of the company’s other facilities in China have been affected by the recent public street attacks.

“In addition to the brewery workers, we have also told the sales and logistics people to stay at home and indoors. Among our Urumqi employees, around 30 percent are minorities [Uighur] and the rest are Han Chinese. But we have never had problems between the two groups at the ...More Info

The Netherlands-based Efes Breweries International N.V. (“EBI”) announced on July, 7 that it has successfully closed and signed a US$300 mln (equivalent amount) Term Loan Facility (the “Facility”) to refinance its existing syndicated term loan facility dated 13 September 2006.

The total Facility size was increased by 50% from a launch amount of US$200 mln due to over- subscription and comprises two tranches of US$150.2 mln and EUR107.0 mln.

The Facility was extremely well supported by the company’s existing relationship with lenders, being over-subscribed by more than 2.5 times, and continues to evidence that the right emerging market names continue to have strong bank support in the syndicated loan market.

According to the main terms of the Facility, Anadolu Efes is the guarantor of the three year loan with an interest rate of LIBOR+475 bps per annum for the US$ tranche and EURIBOR+475 bps per annum for the EURO tranche.

Joining HSBC, mandated lead arrangers were National Bank of Greece AS, Akbank TAS Malta Branch, T Halk Bankasi AS Bahrain Branch, WestLB, Yapi Kredi Bank Nederlands NV and lead arrangers were Eurobank EFG Private Bank Luxembourg, ING Bank AS, Turkiye Garanti Bankasi A.S. Luxembourg Branch, Bank of Tokyo Mitsubishi UFJ Ltd., Calyon, Denizbank ...More Info

Japan’s Asahi Breweries is likely to post a pretax profit of more than JPY27 bln for the fiscal first half which ended in June, the Nikkei newspaper reported on July, 6.

The brewer thus beat its previous forecast by about JPY1 bln. Profit was helped by strong sales of bean-based beer, an alcoholic beverage that skirts Japan’s tax on regular brews, and profit from a Chinese venture, according to the report.

Almost all malt (97%) produced by the 7 Spanish maltsters is used in the domestic beer making, Cerveceros de España, Spanish Brewers Association, communicated in its report on 2008.

More than 98% of malting barley used by the nation’s malting industry is grown locally. Total barley acreage amounted to 3,501,000 ha, whereas barley use for malt constituted 650,000 tons in 2008.

According to official statistics, Spanish malt output was 437,000 tons last year, 2.09% less than in 2007 and 4.25% more than in 2002. Total turnover of the Spanish malting industry amounted to EUR194 mln, investments totalled about EUR2 mln.

Scarlett, Pewter and Quench are barley varieties recommended for malting use in Spain, whereas Prestige, Henley and Shakira are approved for specific use. The varieties Braemer and Clairion are now under observation.

As at the beginning of July, barley prices were cheaper from the Black Sea: Russian barley, FOB small vessels from Azov US$ 120,-, Large vessels FOB Novorossiysk 135,- Ukrainian barley FOB small and large ports, 125,- to 135,-, market sources communicated late last week.

Prices had come down sharply during June with large carry-overs of old crop grains, improved crop prospects, but also due to the exit of large speculators from the American commodity markets.

The expected world barley crop is 143 mln tons vs. 154 - 155 mln tons last year (USDA/IGC). Consumption at 145 mln tons is slightly higher so that the carry-over will be reduced from 30 – 31 mln tons this year to 28.5 mln in 2010.

Markets have been dull since months, Saudi Arabia had purchased a few cargoes, prices ranged from US$200,- at the top down to 170,- recently. Jordan booked 100,000 tons of Ukrainian barley for August/September shipment at US$168,- CIF.

EU’s barley crop prospects in the centre of the EU are good to very good, a report showed on July, 2. France reports mostly excellent conditions and early results, the U.K. and Germany predominantly good prospects, Denmark has recovered well from late planting and an early drought. In these four countries the overall result of the EU barley crop and malting barley supply is decided.

It looks much less good in the Mediterranean, Balkan and Central-East EU countries, where dryness at first and heavy precipitation before harvest have affected yields, quality and condition of the barley.

Adding above surplus figures and deducting the combined deficit of Belgium, Germany and the Netherlands of 2 mln tons, the net surplus of spring and winter barley in the centre of the EU is approximately 2.0 mln tons.

The total availability includes 900,000 tons of Cervoise barley, only a part of which will be marketed for malting purposes. Therefore the net total will hardly be more than 1.5 mln tons, experts advise.

Ireland, Finland, Lithuania and Sweden will be self-sufficient, however, no or very small exporters this year. Czech, Slovakia and Hungary will turn from exporters to deficit countries this year. Late planting and a ...More Info

Australia’s largest barley exporter ABB Grain has cut its full-year profit forecast on the back of a slowdown in demand for beer in Asia, Bloomberg reported on July, 6.

“We’ve experienced slower malt deliveries against contracts in the Asian region due to the global financial crisis resulting in lower growth in beer consumption,” Managing Director Michael Iwaniw said in the statement. “In addition, the recent past droughts have dampened rural input sales, including fertilizer, agricultural chemicals and merchandise.”

But he remained upbeat about the outlook.

"We still expect to generate malt earnings equivalent to last year's record and anticipate the growth slowdown to be short-term in nature as longer-term beer consumption projections remain strong," he said.

Malt sales accounted for about 75 per cent of the company’s earnings in 2008.

The company was also being hurt by a 70 per cent plunge in fertiliser prices, which led to an A$14 mln write-down earlier this year.

Net profit after tax will be between A$43 mln ($34.2 mln) and A$53 mln in the year ending Sept. 30, the Adelaide-based company said on July, 6 in a statement to the Australian stock exchange. That compares with a May 19 estimate of A$53 mln to A$63 mln, it said.

The ...More Info

As China finished the harvest of winter barley in the provinces around Shanghai, industry observers reported earlier this month a better than average malting barley crop. Some sources said up to 500,000 tons of malting barley may be available.

In the good spring barley regions of Xinjiang, Gansu, Inner Mongolia and Heilongjiang farmers planted much less barley than last year, but weather conditions are predominantly good.

China may import 1.5 – 1.8 mln tons of malting barley this calendar year, experts forecast.

At present only French barley is of interest, as Canada and Australia are virtually sold out. Quotes of French two-row spring are around US$ 260,- CIF, six-row winter Cervoise is 30 dollars cheaper.

The UK planted 4% less winter and 23% more spring barley this year, which had to do with impossible planting conditions last autumn, sources advised at the beginning of July.

Crops look altogether good, although there is some concern about dryness, particularly in Eastern Anglia. An average crop forecast is 2.2 mln tons of winter barley in England and Wales plus 350,000 tons in Scotland, thus about 2.55 mln tons for Great Britain.

Spring barley is estimated to be 2.2 mln tons in England/Wales and 1.8 mln tons in Scotland, thus total 4.0 mln tons.

The projections of malting barley receivals and even more of exports differ very much some weeks before harvest. There will probably be an export surplus of close one mln tons. The U.K. has never exported quantities of this size to the Continent, mainly because British barley can compete with French barley along the coast of the Continent, but seldom for inland destinations.

The start of the German barley harvest had raised expectations for - at worst - average yields from this year's winter-sown crop, AllAboutFeed.net cited German trading house Toepfer International on July, 7.

According to the trading house, the expected decent harvest means Europe's barley farmers may find it difficult getting decent prices. Experts forecast prices will fall sharply.

World’s largest barley importer, Saudi Arabia, is unlikely to seek more barley in coming weeks, as its stocks are sufficient for the coming three months. This makes it more difficult to market the new crop.

Swiss based commodity trader Glencore noted that traders in France, which is also a big barley producer, started to aggressively sell barley into the Spanish Mediterranean and Irish markets. In the UK prices had dropped below £80 (€89.90) a tonne. Here intervention buying was likely to prevent "further significant falls".

German farm co-operatives association (DRV) estimated Germany's winter barley production will come in at 9.64 mln tonnes, adding up 120,000 tonnes from the May estimate and 280,000 tonnes higher year on year.

In the 2008-09 crop year, Russia’s combined export of barley and wheat amounted to 21.2 mln tons, Interfax cited a research by the Rusagrotrans analytic center on July, 7.

Thus, Russia’s share of the world’s total grain trade reached 14% - the second largest after the US (17%). Ukraine was ranked third (12.4%) and Canada – fourth (12% of the global grain trade).

Russian barley export constituted 3.2 mln tonnes in 2008-09. The nation’s total grain export volume exceeded the previous record of 18 mln tonnes in the 2002-03 crop year.

As forecast by Rusagrotrans, Russia’s total grain production will remain high in the new crop year. Thus, under a favourable state of the market, the nation may increase its share of the world’s total grain market to 15%, experts said.

In 2008, Spain retained its position of Europe’s seventh-largest producer of hops, Spanish Hop Growers Union communicated in its report on the industry performance in 2008.

Last year’s hops crop surpassed 812 tonnes, the area harvested was 465 ha.

The Union of Spanish Hop Growers includes almost 300 companies.

C. Zufall1, and Th. Tyrell

Abstract:
J. Inst. Brew. 114(2), 134–142, 2008 In this study, the importance of iron and copper ions and their radical formation via the respective Fenton and Haber-Weiss reactions was confirmed. Of the other heavy metals present in the brewing process in relevant concentrations, the impact of manganese ions on beer flavour stability has been elucidated. In contrast to iron and copper, manganese ions are not removed from wort or beer to any great extent during the process. Additionally, manganese shows a similar radical-promoting effect to that seen with iron and copper. Its reactivity, and typically higher concentration than the other two metals in beer, appear to make manganese an especially potent pro-oxidant in beer. The results of the investigation clearly indicate that there are other heavy metals influencing the stale flavour characteristics of beer, in addition to the well-known metals, iron and copper. In contrast to the aforementioned ions, manganese does not enter the product by being leached out of a tank or from piping materials, but rather comes from the cereals employed in brewing. This finding, concerning the importance of manganese as a redox system in beer staling, can serve as a basis for a different approach in the choice of raw materials. Key words: chemiluminescence, copper, flavour stability, heavy metal ions, iron, manganese, radical reactions. Load full article, 9 pages, 0.98 MB , PDF file