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• Canada: Molson Inc. announced on January 28 its intention to make a Normal Course Issuer Bid, pursuant to which Molson may purchase for cancellation up to 3,145,000 of its Class "A" ...more info



• Britain's biggest brewer Scottish and Newcastle and Denmark's Carlsberg (Carlsberg-Tetley) are joining forces in the UK to supply pubs with equipment to bring beer from the cellar to the glass ...more info



• Molson Inc., Canada's oldest brewer, posted a lower third-quarter profit on January 28, sapped by weaker sales in Brazil and at home, its two largest markets ...more info



• Czech Republic: Plzenský Prazdroj, a.s., the Czech beer industry leader, achieved total beer sales of 9.5 million hectolitres in calendar year 2003, a year-on-year increase of 6 % ...more info



• Slovakia: In spite of higher excise taxes on beer, 2003 saw record sales from the Saris Brewery in Slovakia, its parent company ...
  
  
• Russia: Beer consumption in Russia will rise steadily according to Jan Vesely, president of the European Brewery Convention and chairman of the Czech Brewers' Union ...
  
  
• USA: Anheuser-Busch is changing one of its brand beers, according to press reports. The Washington Post said yesterday that the brewer has said it intends to reduce the carbohydrate ...
  
  
• UK: Scottish & Newcastle PLC could close two of its five UK breweries over the next two years, the Financial Times reported on January 27 citing research by analysts ...
  
  
• Latvian brewery, Kimmels Riga, has recently revealed that it plans to increase its turnover in 2004 by 7% to 10% to exceed LVL2m (US$3.75m) ...
  
  

Brewery News

Russia: British brewery, Scottish & Newcastle, has confirmed that it will launch two of its existing beer brands into the Russian beer market this year in an effort to tap in on the premium market, Beverage Daily reported on January 29. The two brands are Kronenberg 1664 and Foster’s, which are currently two of its leading brands in the western European market. Scottish & Newcastle spokesperson Bridget Walker said, “The launches are aimed at feeding demand in the small but growing premium and super-premium sectors. Currently Kronenberg 1664 is marketed as a premium beer in western European markets, however Foster’s is more of a mainstream brand there. What we will be doing is re-branding it for the Russian market as a premium beer alongside the Kronenberg brand.” Walker confirmed that the launches were scheduled for the second half of this year and that the brands would be produced under license by the Baltic Beverage Holding (BBH) company, which is a joint venture between Scottish & Newcastle and Denmark’s Carlsberg group. “We see both of these brands as having huge potential on the Russian market place,” said Walker. “Although sales of Russian beer have shown signs of levelling off, it is the niche premium sectors that now have the most room for development.” The UK brewer has enjoyed huge success in Russia on the back of its investment in BBH. Although the Scottish & Newcastle only bought into BBH 2 years ago, the investment rapidly increasing turnover and profits from the Russian division have helped to boost results for the group as a whole. Last month the brewer reported that turnover for the six months to October 2003 had increased 17 per cent to just over £3bn, whilst profits had increased 16 per cent to £510 million.

The Philippines: San Miguel Corporation (SMC), Southeast Asia's largest food and beverage group, driven by strong revenue growth across all its businesses, posted on January 29 consolidated operating income of P14.4 billion in 2003, 13% higher than the P12.7 billion registered in 2002. Consolidated net sales revenue grew 9% to P148.6 billion last year from P136.1 billion in 2002, with strong volume growth of 14% in beverage, 10% in packaging and 4% in the food group. Consolidated net income reached P7.37 billion ($132.8 million), up 7% following robust growth in domestic beer, improved performance of the food group and strong fourth quarter gains in international beer particularly J. Boag and South China. SMC’s EBITDA (earnings before interest, taxes, depreciation and amortization) for 2003 reached P20.3 billion, 8% better than 2002, while earnings per share last year improved at P2.60 compared to the 2002 level of P2.49. San Miguel Beer Philippines sustained its sales momentum of the past seven quarters, resulting in a 13% increase in 2003 revenues to P30.6 billion, and a 12% improvement in volume that reached its highest level since 1997. Operating income grew by 20% to P5.5 billion. Beer international recovered from SARS-related difficulties in the first half and posted an operating income of US$10.27 million in the second semester, 24% better than 2002. Consolidated operating income in 2003 amounted to US$ 1.46 million. Volume in the second half of last year grew by 12%, while total-year volume posted a 4% improvement...more info

US beer maker, Pyramid Breweries, agreed to buy Portland Brewing for $4.2 million on January 27, a deal that would make the Seattle-based craft brewery the third-largest on the US West Coast, The Seattle Times reported on January 28. The deal, expected to close in the second quarter, would give Pyramid a foothold in Oregon, a stronger brand portfolio, a 100,000-barrel facility and a brewery-restaurant in Portland. It would produce more beer than all West Coast microbreweries except Sierra Nevada Brewing and Woodinville, WA-based Redhook Ale Brewery. Pyramid agreed to give Portland Brewing cash and stock and to assume debt. The deal is subject to approval by Pyramid shareholders. "The craft-brewing business is very competitive and changes daily," Pyramid CEO Martin Kelly said. "To stay ahead, breweries must keep moving forward. "Some breweries have chosen to go the route of aligning themselves with large, multinational, industrial brewers. We believe that approach can stifle creativity and lead to less choice for consumers." Portland Brewing, whose signature product is MacTarnahan's, is a good fit for Pyramid. The Seattle brewery runs four ale houses -- in Seattle and in Walnut Creek, Berkeley and Sacramento, Calif. -- and has been looking for new locations on the West Coast. The ale houses have allowed Pyramid to introduce the brand to consumers. "What's significant is Pyramid is playing to its strengths," said Thomas Dalldorf, editor and publisher of Celebrator Beer News, a newspaper based in San Leandro, Calif. "It saw a good opportunity at a good price, and MacTarnahan's was struggling for a while."...more info

Brazilian company, Cervejarias Kaiser Brazil, S.A. ("Kaiser") has started rolling out its direct sales activities throughout the Sao Paulo region as a result of a recently concluded agreement with FEMSA, the Coca-Cola franchisee that operates in Sao Paulo state, the parent company, Molson Inc. posted on January 28. The sales activities will be driven by approximately 600 newly recruited sales employees dedicated exclusively to the Kaiser beer portfolio. As a result of the recent agreement with FEMSA, Kaiser takes on the responsibility of training and managing these sales people who for the most part have beer sales experience. These people will cover more than 100,000 points of sales throughout most of the Sao Paulo region. FEMSA, the Coca-Cola franchisee, will continue to be responsible for the logistics and distribution of the Kaiser products. "Historically, the Sao Paulo region has been important for both the Kaiser and Bavaria brands and the region represents approximately 30% of the brewer's sales volume. Therefore, this agreement with FEMSA is key to Kaiser rebuilding its brand presence and market share in the region," explained Robert Coallier, President and CEO of Cervejarias Kaiser. Over the recent months, Kaiser has implemented sales organizations in six regions: Campinas, Recife, Salvador, Fortaleza and Goiania and Rio de Janeiro. Through these sales efforts, Kaiser now manages approximately 1,200 experienced sales people dedicated to its beer portfolio. These agreements demonstrate the evolution of Kaiser's relationship with the Coca-Cola bottlers and are designed to strengthen the value of the beer proposition within the Coca-Cola distribution system. Cervejarias Kaiser Brazil, S.A. is a subsidiary of Molson Inc., one of the world's largest brewers of quality beer with perations in Canada, Brazil and the United States. A global brewer with $3.5 billion in gross annual sales, Molson traces its roots back to 1786 making it North America's oldest beer brand. Committed to brewing excellence, Molson combines the finest natural ingredients with the highest standards of quality to produce an award-winning portfolio of beers including Molson Canadian, Molson Export, Molson Dry, Rickard's, Marca Bavaria, Kaiser and Bavaria.

Malt News

USA, Great Falls: John Kramer, president of the Great Falls Development Authority, briefly outlined at a seminar on January 29 the impact of the International Malting Co. malt barley plant under construction north of Great Falls and noted that the city may have opportunities to gain military jobs in coming years. Additionally, he said his agency's efforts to lure new employers are getting a warmer reception these days. "All indications are, we will do well" in 2004 and beyond, Kramer said. While the outlook for Great Falls and Cascade County appears glum, Kramer said the malt plant will prompt area farmers to switch from wheat to barley. Because malt barley typically brings a better price, the switch could bring $10 to $15 million more per year to the local economy, he said.

Barley News

In 2004-2005 world barley production is expected to increase from 2003-2004, as higher production in Europe and Canada more than offsets reduced production in the US and Australia, according to Agriculture and Agri-Food Canada. Production in the Middle East, except for Saudi Arabia, and North Africa is forecast to decrease from 2003-2004 when very good crops were harvested in these regions. With much of the reduced carry-in stocks offset by higher production, world barley supplies are expected to be close to 2003-2004. However, exportable supplies are forecast to increase from 2003-2004, due to reduced feed demand for barley in Europe. Higher import demand for feed barley in the Middle East and stronger import demand for malting barley in China and, to a lesser degree, in the US are expected to drive world trade up. Carry-out stocks are expected to increase slightly. In 2004-2005 in Europe, EU barley production is expected to increase by about 7% to 50 Mt due to increased area seeded to barley, as a result of the decrease in the set-aside requirements from 10% to 5% to boost EU grain production. Barley production in the FSU and Eastern Europe is forecast to recover from the weather-affected 2003-2004 to about 35 Mt and 9 Mt, respectively. Increased production in Europe is expected to more than offset lower carry-in stocks of 7.7 Mt for 2004-2005 versus 16.2 Mt for 2003-2004. As a result, barley supplies in Europe are forecast to increase. Demand in Europe is expected to decrease as barley is replaced by other feed grains, such as wheat and corn, which experienced a significant decrease in production in 2003-2004. Barley exports from Europe, especially feed barley exports from the FSU, are forecast to increase, which is expected to pressure world feed barley prices significantly. The EU is expected to compete more aggressively with Australia and Canada in the world malting barley market, such as China, which depresses two row malting barley prices. EU barley subsidies are not expected to play a major role in the world barley market in 2004-2005...more info

UK: The total barley area now stands at 1.1 million ha, marginally down on the provisional number. Winter barley accounts for 0.5 million ha and spring barley 0.6 million ha, HGCA released on January 26. However, the lower area has been exacerbated by lower yields for both winter and spring barley. The net result is for the total barley crop to be placed at 6.4 million tonnes, down 0.2 million tonnes on the provisional estimate. Of this, winter barley accounts for 2.9 million and spring barley 3.5 million tonnes. Defra have revised down both the winter and spring production by 0.1 million tonnes. Of the winter crop, England accounts for 2.4 million tonnes and Scotland 0.4 million tonnes, while spring production is at 1.7 million tonnes and 1.6 million tonnes respectively. Based on a total barley crop of 6.4 million tonnes, the UK exportable barley surplus should be in the region of just under 1 million tonnes. By the end of October 2003 the UK had exported 0.47 million tonnes. In the Scottish context, HGCA point out that almost 30% of the spring barley crop is destined for the malting barley market. Prices for malting barley, however, have been largely unrewarding for farmers since 1996, when the market hit a peak of £150 per tonne before sliding down progressively to little better than £70 per tonne in 2002. The 2003 harvest saw prices improve significantly, though grain was traded at little better than £80 per tonne.


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 2004 are available on site www.e-malt.com/MarketPrices

Malting barley prices. French barley prices. Nominal prices.

EURO = USD 1.2416 January 30, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	140.50	174.50	135.00	168.00
2RS	Prestige/Cellar	140.00	174.00	134.00	166.50
2RS	Aspen	138.00	171.50	133.00	165.50
2RS	Optic	138.00	171.50	133.00	165.50
2RS	Astoria	138.00	171.50	132.00	164.00
2RS	Cork	137.00	170.50	132.00	164.00
6RW	Esterel	nq	nq	122.00	151.50

nq - Not quoted

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

Graph of the week

Agenda

January 2004: INTERNATIONAL FOOD & DRINK EXHIBITION (IFDE 2004); The 2004 Barley Day; VLB Symposium Information Technology; Pianeta Birra - Beverage & Co. International Show of Beers, Beverages...;
February 2004: Pianeta Birra - Beverage & Co. International Show of Beers, Beverages; Orges brassicoles 2004: Des perspectives nouvelles de marchés; HOFEX 2004 Food & Drink; Canadian Food & Beverage Show; BIEREXPO;
March 2004: International course - Malting and Brewing Science; FOODEX Japan 2004; ANTAD 2004; 2004 BIENNIAL CONVENTION; Beer Auction 2004, the international exhibition of beer, technology and equipment; China Drinktec 2004. China International Exhibition on Beverage and Brewing Processing Technology

More events are available on site e-malt.com

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