Mexican beverage company Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”) announced on January, 11 that its Board of Directors has unanimously approved a definitive agreement under which FEMSA will exchange its FEMSA Cerveza (beer) business unit for a 20% economic interest in Heineken.

Under the terms of the agreement, FEMSA will receive 43,018,320 shares of Heineken Holding N.V. and 72,182,201 shares of Heineken N.V., of which 29,172,502 will be delivered pursuant to an allotted share delivery instrument.

It is expected that the allotted shares will be acquired by Heineken in the secondary market for delivery to FEMSA over a term not to exceed five years.

Heineken also will assume US$ 2.1 billion of indebtedness including FEMSA Cerveza’s unfunded pension obligations. The total transaction is valued at approximately US$ 7.347 billion, based on closing prices of € 32.92 for Heineken N.V. and € 29.38 for Heineken Holding N.V. on January 8, 2010, including the assumed debt.

José Antonio Fernández Carbajal, Chairman of the Board and Chief Executive Officer of FEMSA, will join Heineken N.V.’s Supervisory Board as a Vice Chairman. Mr. Fernández will also serve as Chairman of the newly-formed Americas Committee and will be a member of the Heineken Holding N.V. ...More Info

Vietnamese brewers will produce about 2.7 bln litres of beer this year to meet the rising demands of local consumers, Viet Nam News cited an estimate by the Sai Gon Alcohol, Beer and Beverage Corporation (Sabeco) on January, 13.

Sabeco, which currently accounts for roughly 35 per cent of the domestic beer market, also anticipated that the consumption of beer in Vietnam would have a growth rate of roughly 15 per cent in 2010 and in the next few years.

However, it also warned that the next three years would be hard for domestic beer producers as special consumption tax on beers, excluding draught beer, would decline from 75 per cent to 45 per cent. The tax on draught beer, meanwhile, would increase to 45 per cent from the current 40 per cent.

"This will be a chance for high-quality beer products brewed by foreign beer producers to enlarge their market share," Sabeco said.

Currently, local beer producers mainly concentrate on the draught beer market.

Viet Nam has a lot of potential for beer producers as consumption in the country currently averages out at 14 litres per capita a year, much lower than around 40 litres in Indonesia and 160 litres in Germany, experts ...More Info

Analysts do not expect the mergers and acquisitions trend in the brewing industry to stop, but the complexion of future deals is forecast to change, MarketWatch communicated on January, 11.

Heineken's acquisition of FEMSA Cerveza is only the lip of the mug when it comes to mergers and acquisitions in the global beer industry.

The biggest was the 2008 deal that saw Belgian InBev take over Anheuser-Busch for more than $50 billion, as well as Heineken and Carlsberg's joint acquisition of Scottish & Newcastle for $15 billion.

In 2005, a deal worth $3.3 billion created Molson Coors through the merger of Molson and Coors.

And Molson Coors got together with SABMiller to form MillerCoors, which is a conglomeration of their U.S. interests.

Currently, the four top players control about 50% of the global market. And in his remarks, Heineken CEO Francois van Boxmeer said it is likely they will soon gobble up another 25% between them.

"The trend toward global consolidation is continuing and there is a significant amount more of it that will happen," said Benj Steinman, editor of Beer Marketer's Insights.

FEMSA accounts for only a couple of percentage points in the global market, he noted, so there is plenty of ...More Info

Belgium-based world’s No. 1 brewer AB InBev may consider sale of shares in its standalone brewery Crown Beers India Pvt Ltd, Reuters cited on January, 12 sources directly familiar with the situation.

AB InBev, which is exploring an exit or a significant stake sale, is seeking a valuation of $30 mln for the brewery, sources claim.

The global giant has been open to either a total sale or a majority divestment in the fully-owned manufacturing unit, which is currently parked outside its marketing and distribution joint venture with New Delhi-based RJ Corp, a diversified conglomerate owned by serial entrepreneur Ravi Jaipuria, which is also India's largest bottler for PepsiCo.

AB InBev, which has a minority stake in this with RJ Corp, may not play an aggressive India game in the next 2-3 years, said one source in direct contact with the company, who confirmed that sale of shares in Crown Beers was a possibility if attractive suitors emerged. Any deal will have a clause for a long-term brewing of Budweiser and other AB InBev beers at Crown.

Crown Beers, which used to be the Indian arm of Anheuser Busch, came to the fold as part of the US brewer’s takeover by InBev in 2008. ...More Info

As Idaho's barley producers begin planning for the 2010 crop, they are facing a much changed economic environment than just two years ago, AG Weekly communicated on January, 8.

Crop failures in key barley producing areas coupled with surging wheat prices, forced malting barley buyers to significantly increase contracts to compete. But good yields across all growing regions - even worldwide - have left elevators full of 2009 barley. Add to less demand for malting barley, and not only have contract prices been cut, but some growers are finding their acres cut as well.

"There is no signal to grow open market acres," said Kelly Olson, executive administrator of the Idaho Barley Commission.

Beer sales began to pick up in the third quarter of 2009 and that has brewers hoping that demand will continue to rebound as the economy picks up.

However, more brewers worldwide are releasing light beers, even those in Latin American countries that don't traditionally drink light beers.

Light beers require less malt and that will keep demand for malt lower even as beer consumption increases as the economy improves, Olson said.

To compete, growers will need to watch for opportunities to increase yields and cut costs.

IBC is also working with brewers ...More Info

Michal Kurec, Martin Baszczynski, Radek Lehnert, André Mota, José A. Teixeira and Tomáš Brányik

J. Inst. Brew. 115(3), 253–258, 2009 ABSTRACT
An expeditious method of yeast age estimation was developed based on selective bud scar staining (Alexa Fluor 488-labelled wheat-germ agglutinin) and subsequent fluorescence intensity measurement by flow cytometry. The calibration curve resulting from the cytometric determination of average bud scar fluorescence intensities vs. microscopically counted average bud scar numbers of the same cell populations showed a good correlation and allowed routine cell age estimation by flow cytometry. The developed method was applied for yeast age control in traditional batch and continuous beer fermentations. At the pitching rates used in industrial beer fermentations, our results support former findings by locating a gradient of increasing yeast age from the top to the bottom zone of the fermenter cone. The results also indicate that in continuous beer fermentation, the increasing bud scar fluorescence of immobilized cells could help to schedule the replacement of aged biomass, prior to loss of viability or deterioration of process performance and product quality. Key words: aging, beer, bud scar, flow cytometry, staining, yeast.
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