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• Russian brewing force, Baltika is looking to issue a three-year bond, Russian newspaper Kommersant revealed ...more info



• Danish beer maker, Bryggerigruppen, announced on February 2 is to produce Coop beer brands for the retail store chain Coop Danmark ...more info



• Colombia: Grupo Empresarial Bavaria, the Columbian beer company, has closed its five-year, syndicated $150 million loan, led by the Andean Development Corp. (CAF) and ABN AMRO ...more info



• Dutch brewing giant, Heineken, has seen its recommendation downgraded. Panmure, part of investment bank Lazard, dropped on January 28 the Dutch brewer’s ratings to “sell” from “hold” ...more info



• Belgian brewing force, Interbrew, which produces Stella Artois, has announced that it will launch its own record label this month. Beer brand Stella Artois is to start a music label ...
  
  
• The Danish Brewery Group A/S (Bryggerigruppen) announced on February 3 that in 2003 it launched its V8 Strategic Plan establishing the following overall financial targets ...
  
  
• Italy: Exports of Italian beer in 2003 increased by 38% up to 951 thousand hl of beer versus 2002 when Italy exported 689 thousand hl of beer ...
  
  
• British brewing and pubs group Greene King's flagship ale Old Speckled Hen has helped to boost sales by 5% in the run-up to Christmas ...
  
  
• Guangdong Brewery has seen its rating downgraded by DBS Vickers Securities who shifted its rating for the company from “buy” to “hold” on January 30 ...
  
  
• Czech beer maker Budweiser Budvar announced on January 29 that its beer production in 2003 fell by 3.5% year-on-year to 1.171 million hectoliters while revenue increased ...more info



• China: Major brewers are pouring a new pint of beer in China these days-premium draft, Asahi Breweries said on January 31 ...more info

Brewery News

Dutch brewing force, Heineken N.V. said on February 2 it expects to produce China-made, Heineken-branded beer in the coming six months, but its Chinese partner Guangdong Brewery Holdings isn't guaranteed a role in this initial plan. Still, with the forthcoming consolidation of operations between the two and expected production cost advantages over domestic rivals, the Guangdong Brewery management believes the cooperation will help boost the market share of its domestic-branded beer products in the next five years. The Dutch company, the world's third-largest brewer, said last week its China associated company, Heineken Asia Pacific Breweries China Pte, will take a 21% stake in the Guangdong province-based beermaker for EUR57 million. Before that, the world's largest brewer, Anheuser-Busch Cos., bought a stake in China market leader Tsingtao Brewery Co. Other major players like SABMiller PLC and Interbrew SA have also linked up with other leading local firms. "It doesn't matter if we come in one or two years later," Heineken N.V. Chairman Thony Ruys said in a media briefing. "We're entering a market that is the largest in the world...China is a country of countries." Currently, Heineken beer is imported into China. When local production starts, it will be marketed as a premier beer in China, posing no direct threat to Guangdong Brewery's domestic Kingway beer. Rick Linck, managing director of Heineken's Shanghai operations, said the company is finalizing its production plan for Heineken beer in China. It will likely see its first output at the Shanghai plant, now running at a utilization rate of 50%-60%, within six months. Heineken APB China owns breweries in Shanghai and Hainan, which together can produce about 3.5 million hectoliters at full capacity...more info

New Zealand, Wellington: Heineken-controlled DB Group said on February 3 its first-quarter sales had performed strongly while sales margins were in line with budget and ahead of last year. "The targets we have set for 2004 are contingent upon achieving growth in both volume and margin," managing director Brian Blake told shareholders at the annual meeting. "Looking ahead, we will continue to grow the company, with a constant focus on our 10% ebit [earnings before interest and tax] growth target. "We recognise this is ambitious in a mature market but we are well placed to achieve this figure through our strong brand equity, the pursuit of new distribution opportunities, an ongoing focus on effectiveness and efficiency and the constant upskilling of our people." DB's performance in 2003 was assisted by beer market growth of 2.4% that has signalled a significant turnaround for the New Zealand market. DB's ebit was up 13% on the previous year at $34 million, with a 10.7% lift in sales, which included the additional retail sales achieved from the purchased NZ Liquorland stores. Beer revenue was up 6.3%, underlining DB's shift towards premium products.

Germany: Beer consumption in Germany fell by 3.4 % in 2003 in spite of an exceptionally hot summer. Some 9.32 billion liters of beer were sold in Germany in 2003, down from 9.65 billion liters in 2002, the Federal Statistics Office said. The introduction of a complicated system of deposits on cans and bottles in the first half of last year exacerbated the downward trend of German beer consumption over recent years. Deposits are only paid back to customers at the point of initial purchase. An increase in health awareness and a slow economy are also blamed for the decline. An 11 % rise in exports to other European Union countries helped offset some of the downturn, the Federal Statistics Office said. Germans remain among the heaviest beer-drinkers in Europe - with only the Czechs and Irish downing more. In 2002 the average German was getting through 125 litres a year - more than 220 pints - well ahead of the average Briton on 100 litres a year (177 pints). "What has happened across Europe is that in big beer-drinking countries consumption has come down, while wine consumption has increased," a spokesman for the British Beer and Pub Association told BBC News Online. "In more traditional wine-drinking countries it's been the other way round, and wine consumption has fallen while beer consumption has increased. "It's as if... drinking habits are becoming more similar across Europe." Germany still has 1,280 breweries, but the home market has been steadily shrinking since the mid-1990s. The statistics exclude malt drinks, alcohol-free beer and beer imported from countries outside the European Union.

MEXICO: Grupo Modelo, Mexico's top brewer and maker of the popular Corona beer, is expected to report a 20 % leap in fourth-quarter net profit, driven by strong U.S. sales, analysts said on February 3. Five analysts surveyed by Reuters forecast, on average, sales for the October-December period would rise 6 percent from a year earlier because beer distributors of Modelo brands in the United States bought heavily ahead of a price hike. Modelo, half owned by Anheuser Busch, the world's No. 1 brewer, said in November it planned to increase prices for brands such as Corona and Corona Light in the United States from the start of 2004. "Volumes (of exports) should be very good, up 16 percent year on year, supported by an inventory build-up" ahead of the January price rise, Credit Suisse First Boston said in a recent research report. About 90 percent of Modelo's exports go to the United States. Sales abroad represent about 30 percent of company revenue. Domestic sales in the fourth quarter are expected to be up 2 percent to 3 percent. A local price freeze helped support volume sales as Mexico's economy remained sluggish and Mexicans were careful about their spending. Earnings before interest, taxes, depreciation and amortization (EBITDA) -- a key indicator of profitability for Mexican companies -- are seen growing 8.4 percent in the quarter, according to the Reuters survey of analysts.

Malt News

Canada: Domestic malting capacity (the process of converting malting barley to malt for use in brewing) has also grown in the west. As one of the world's major malt barley exporting countries, Canada has experienced the world's greatest increase in malt capacity over the last 15 years, adding over 350 000 tonnes of capacity for an annual total of 1.2 million tonnes. In contrast, U.S. malting capacity has actually declined over the same period, CWB has recently posted. Canada malts four times more barley per capita than the United States. The malting industry in Western Canada has shown tremendous growth in the face of free trade. In 1980 only 55 % of total Canadian malting capacity was located in the west. Now in 2003, 75 % of domestic malting capacity is located on the Prairies, a result of increased demand from international markets that have nearly doubled to 700 000 tonnes (in barley equivalent) annually; a demand that western Canadian maltsters are helping to meet through increased exports. Increased exports of malting barley and market diversification by the CWB and its Accredited Exporters have been an ongoing trend. CWB exports of malting barley have gone from 335 000 tonnes in 1991-92 to an expected 1.3 million tonnes in 2003-2004. The CWB Long-Term Plan calls for malting selections to increase to 3.4 million tonnes, a million tonnes more than current selections, according to The Canadian Wheat Board presentation to The Standing Senate Committee on Agriculture and Forestry...more info

Belarus’ brewers are to import about 50 thousand tonnes of malt and malting barley till the beginning of new 2004 (August) harvest, the local authorities has recently posted. To this purpose the government decided to organize tenders. According to analysts, Belarus processed only 19 thousand tones of malting barley instead of 2003 planned 70 thousand tonnes. The fail was attributed to the fact that Belarus barley does not suit the quality standards regarding colour and protein content.

Barley News

South America: Mercosur harvested a very good crop of malting barley: Brazil 300 thousand tonnes, Uruguay 300 thousand tonnes, Argentina 7-800 thousand tonnes. Quality is the best since years, except some very low protein in Argentina. Barley needs for malting are 360 thousand tonnes in Brazil, 270 thousand tonnes in Uruguay and 470 thousand tonnes in Argentina, which leaves a surplus of 2-300 thousand tonnes for the region. Exports abroad are unlikely due to high freight cost and the handicap of too low protein for customers abroad.

Barley in Canada

	2002-2003	2003-2004 f	2004-2005 f
Harvested area (thousand ha)	3,348	4,446	4,366
Yield (tonne/ha)	2.24	2.77	3.03
Production (thousand tonnes)	7,489	12,328	13,247
Imports (thousand tonnes)	259	50	50
Total Supply (thousand tonnes)	9,795	13,819	14,897
Exports (thousand tonnes)	939	2,800	2,750
Food & Industry Use (thousand tonnes)	181	320	375
Feed, Waste, Dock. (thousand tonnes)	6,796	8,664	9,517
Total Domestic Use (thousand tonnes)	7,415	9,419	10,347
Ending Stocks (thousand tonnes)	1,441	1,600	1,800
Average Price (CA$/tonne)	171.88	115-135	110-140

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 1.2535 February 04, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	139.50	175.00	134.00	168.00
2RS	Prestige/Cellar	139.00	174.50	133.00	167.00
2RS	Aspen	137.00	172.00	132.00	165.50
2RS	Optic	137.00	172.00	132.00	165.50
2RS	Astoria	137.00	172.00	131.00	164.50
2RS	Cork	136.00	170.50	131.00	164.50
6RW	Esterel	nq	nq	121.00	152.00

nq - Not quoted

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

French Malting Barley Price Evolution

	Maximum average price for 2RS Malting Barley, Crop 2003: 148.50 EUR/tonne - in November 2002
	Minimum average price for 2RS Malting Barley, Crop 2003: 124.00 EUR/tonne - in June 2003
	Maximum average price for 6RW Malting Barley, Crop 2003: 129.00 EUR/tonne - in November 2003
	Minimum average price for 6RW Malting Barley, Crop 2003: 115.00 EUR/tonne - in June 2003

Graph of the week

Agenda

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; GrainWorld 2004;
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
April 2004: World Beer Cup; 2004 National Craft Brewers Conference and trade show BrewExpo America;

More events are available on site e-malt.com

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