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• Baltic Beverages Holding AB (BBH), 50:50 owned joint venture between Carlsberg Breweries A/S and Scottish & Newcastle plc, announced on February 10 its full year 2003 and fourth quarter results ...more info



• USA: Pyramid Breweries has announced a slight rise in net revenue for Q4 but an increase in net losses. Net revenue for the quarter to 31 December 2003 increased by 1.5% year-on-year ...more info



• USA: Adolph Coors Company announced on February 5 higher consolidated net sales, net income and earnings per share for 2003, despite declining U.S. beer sales late in the year ...more info



• Serbia: Carlsberg Breweries announced on February 10 that it had appointed Boguslaw Bartczak as Chief Executive Officer of Pivara Celarevo brewery in Serbia ...more info



• Three Scandinavian brewers are teaming up to do battle with Carlsberg, local press reported. In its online edition, Danish newspaper Berlingske Tidende said that Denmark’s Bryggerigruppen ...more info



• Heineken plans to brew China-made, Heineken-branded beer within the next six months, according to press reports ...more info



• Australia: Foster’s Group announced on February 9 that its president and CEO, Ted Kunkel, will step down before the end of the calendar year 2004 ...more info



• Carlsberg’s proposed takeover of Holsten has been delayed, according to press reports ...more info



• Danish brewing force, Carlsberg A/S has plans for further acquisitions worth a total of €1.5 billion. Carlsberg’s supervisory board approved that statement ...more info



• Tibet: Carlsberg and the Danish Industrialization Fund for Developing Countries (IFU) acquire 50 % of the share capital of Lhasa Brewery ...more info



• Chile: SVS, the Chilean securities regulator, is to investigate possible fraudulent trading in shares of Compania Cervecerias Unidas, the Chilean beverage company ...more info



• The Danish Brewery Group A/S (Bryggerigruppen), Denmark's number 2-brewery group in terms of size, expects pretax profit for 2003 to reach between DKK210m (US$35.6m) and DKK235m ...more info



• UK: The price of a pint of bitter went up by 5p on February 6 and lager is set to rise by around 11p a pint over the next couple of weeks ...more info



• Canada: Columbia Brewery, maker of Kokanee beer, has launched a Signature Mountain Series that will feature BC and Alberta ski resorts on 12 million Kokanee bottles ...more info

Brewery News

China: Scottish and Newcastle (S&N) announced on February 11 about its intentions to acquire 19.5% of equity in the Chinese Chongqing Brewery Company (CBC) from CBG, who will remain the largest shareholder with 34.5% of equity. Funds injected will be used by CBG to acquire breweries in the Chongqing and Yangtze River regions. These acquired breweries and those unlisted breweries already owned by CBG will be injected into CBC to create a single listed brewing entity. S&N’s injection of equity will enable CBC to expand its regional leadership in the fast consolidating Chinese market. Emerging markets provide an attractive opportunity for long term growth. S&N has had a ten year relationship with Chongqing and can contribute skills, experience, and brands. Chongqing is a profitable brewer with a strong regional position. Meanwhile Chinese beer market estimated at 240 mhl has excellent growth prospects growing at 6-7% per year. Chinese per capita consumption is about 20 litres with strong prospects for long term growth. Growing consumer prosperity will create the long term requirement for greater brand differentiation amongst domestic brands and some potential for international brands Chongqing Beer Group, a municipal government company owns unlisted breweries with capacity of 4 mhl, and 54% of the listed company Chongqing Brewery Company, has ten-year relationship with S&N. The brewery is situated in Chongqing in South West China. Chongqing population: city 13m, region 30+m. The region is a favoured development region for central government. The brewery is a strong market leader in the region with 80%+ market share in Chongqing. It has a good level of profitability (EBITDA margin c 20%). Brewery’s leading brands are Chongqing beer and Shancheng beer.

Australasian drinks group Lion Nathan Ltd reconfirmed on February 9 its earnings guidance of NPAT (from operations) for the 2004 fiscal year of between $195 and $200 million, following a solid performance from its Australian beer business in the first quarter (ended 31 December 2003). Total beer volumes for the group for the three month period were up 1.8 % to 275.8 million litres. Lion Nathan Australia’s volumes were flat compared with the same period last year, while Lion Nathan China’s volumes grew strongly. Total wine case sales were up 2.8 per cent with solid growth from Wither Hills and Argyle. In Australia, domestic wine volumes were ahead of last year but continuing competitive pressure adversely impacted export sales volumes and margins – particularly to the United Kingdom. In Australia, the overall beer market declined slightly, however cost initiatives, continued positive mix shift and relatively stable pricing has the business on track to deliver EBITA growth for the year of between five and seven per cent – in line with previous guidance. Competitive pricing and slightly lower than expected volumes adversely impacted New Zealand beer margins. Chinese volumes were strong, however margins were impacted by competitive pricing and mix shift as lower margin mainstream beer grew at a faster rate than the premium brand portfolio. Contribution from the wine business was in line with expectation and ahead of the same period last year. Commenting on the first quarter performance, Lion Nathan CEO, Gordon Cairns said: “The year has got off to a solid start although we remain concerned about the impacts of competitive pricing in New Zealand. On the basis of the performance for the first four months of the year, we are comfortable with the earnings guidance that we provided at our Annual General Meeting on 17 December. As disclosed at that time, first half earnings growth will be below the rate implied for the full year and NPAT (from operations) is expected to be flat although underlying business performance remains solid.”

Ukraine: Russia's biggest brewer, Baltic Beverages Holding (BBH), is to launch its new 50 million-euro brewery in Ukraine in June, the Association of Ukrainian Beer Producers said on February 9. BBH is a joint venture between Danish brewer Carlsberg and Finland's Hartwall, which was bought in 2002 by Britain's biggest brewer Scottish & Newcastle. BBH has about an 18 percent market share in Ukraine and is hoping to increase its slice of the 48-million strong market, according to Reuters. "Construction was started about a year ago and today the installation of equipment is being completed. The equipment is being tested right now," the association said in a statement. The plant located in the Ukrainian capital Kiev would have a capacity to produce about 12 million hectolitres of beer a year. BBH already controls two breweries in Ukraine. Ukraine's beer market has grown by about 10 percent annually over the last five years. Beer production grew to 166.4 million hectolitres in 2003 compared with 149.8 million hectolitres in the previous year. BBH was formed in 1991 and was the first western European brewer to invest in the former Soviet Union. It has 10 breweries in Russia and also operates in Kazakhstan and the Baltic states.

Japan: Anheuser-Busch claimed on February 9 it has exclusive rights to the Budweiser trademark in Japan, despite statements made last week by rival Czech brewery Budejovicky Budvar, according to St. Louis Business Journal. Stephen Burrows, president and chief executive of Anheuser-Busch International, said the Japanese court's action last week allows Budvar to continue using the Budejovicky Budvar trademark along with its trade name "Budweiser Budvar N.C.," which is used similar to Anheuser-Busch's name at the bottom of the label. "The Japanese Courts have recognized that our Budweiser trademark is, and has been for years, a well-known and famous trademark," said Burrows, in the statement. "The decision by the Supreme Court of Japan has no effect on Anheuser-Busch's ability to continue selling Budweiser in Japan." Last week, Budejovicky Budvar said Japan's highest court upheld Budvar's rights to the trade name in that country, and gave Budvar's trading company in Japan the right to use the name Budweiser Budvar N.C. The two companies have been in court battles over the Budweiser name for nearly 100 years. A-B has said it has used the Budweiser trademark since 1876, 19 years before Budejovicky Budvar was established. Budvar was founded in a town called Budweis by the German-speaking people that populated the area in Czechoslovakia at the time. St. Louis-based Anheuser-Busch Cos. Inc., the world's largest brewer, manufactures and recycles aluminum cans and operates theme parks. The company has won exclusive rights to the "Bud" and "Budweiser" names in Australia, Denmark, Finland, Italy, Nigeria, New Zealand, Spain and Sweden, but has lost rights to the trademarks in some European countries.

Mexico: Modelo, Mexico's largest brewer, sees local sales volumes up between 2 % and 3 % this year, in tandem with an expected expansion in the economy, a company spokesman told Reuters on February 9. "For domestic sales volumes growth, we have an estimate of between 2 percent and 3 percent which is based on the outlook for GDP (gross domestic product)," Jose Pares, head of Modelo's investor relations, told Reuters. The outlook for 2004 is similar to the increase in domestic sales that Modelo had last year. In the first nine months of the year, Modelo's sales volumes rose 3.3 percent to 31.2 million hectoliters (a hectoliter equals 100 liters). Around 70 % of Modelo's revenues come from domestic sales. Its main rival in the Mexican beer market is Femsa. Mexico's government expects the local economy to expand 3.1 percent this year up from the estimated 1.2 percent growth in 2003. Pares said Modelo, half owned by the world's largest brewer Anheuser-Busch Cos. Inc., did not have a forecasts for how export volumes would turn out this year. "There's no guidance at the moment, there's no number, we still do not have an official export forecast," Pares said.

Malt News

EU malt export licence bookings were only 140,000 tonnes in December and January combined. Total fixations are now 1.46 million tonnes versus 1.3 million tonnes a year ago. The comparison is distorted by the unknown amount of panic bookings in September, when maltsters were scared of an export tax. As sales are definitely lagging behind, it must be feared that final numbers for the crop year will fall behind last year’s 2.04 million tonnes.

(in tonnes)	2000 - 2001	2001 - 2002	2002 - 2003	July 1, 2003 - January 27, 2004
France	523,190	701,134	661,772	442,658
Germany	305,980	468,314	408,063	251,412
Belgium	277,584	296,368	287,850	215,313
U.K.	254,793	350,621	294,995	331,028
Finland	65,550	91,890	100,758	43,959
Denmark	52,326	96,812	94,791	44,910
Sweden	50,847	101,000	76,916	49,569
Netherlands	54,835	51,310	66,219	49,721
Ireland	26,003	35,145	31,140	20,900
Austria	4,850	8,840	8,620	6,136
Spain	3,000	2,400	5,640	10,000
Greece	1,800	1,744	1,306	500
Portugal	340	221	85	355
Italy	-	-	2	-
Total:	1,621,098	2,205,799	2,038,157	1,466,461

	Total Wheat malt, tonnes
Total 2000/2001	4,686
Total 2001/2002	12,805
Total 2002/2003	30,908
July 1/03 – January 27/04	4,655
	Total Roasted malt, tonnes
Total 2000/2001	23,967
Total 2001/2002	23,480
Total 2002/2003	23,603
July 1/03 – January 27/04	13,307

International malt business has been dull in December and January. EU sales to the Western Hemisphere become more and more difficult because of the firm EUR vis-à-vis the U.S. Dollar. A number of businesses were done in Mercosur, at prices of US $ 375-380 ex works Brazil. Mercosur and Chilean malt is not subject to any import tax, and by now the malting industries there are more or less sold out. Canadian malt, which had sold at US $ 320 CFR Brazil last year, is somewhat more expensive now, but still very competitive against European produce.

Barley News

USA: Final barley crop estimate of 6.006 million tonnes is hardly changed from earlier figure. The U.S. sold 472,000 tonnes barley for export to-date including 258,000 tonnes to Japan, but no more than 4,000 tonnes to Mexico. U.S. maltsters estimate that they will import 350,000 tonnes from Canada. New crop acreage is expected lower than last year’s 2.145 million ha.

Taiwan: The TTL purchased 50,000 tonnes of Australian malting barley from ABB, probably at the price of US $ 197 CFR as offered in the tender.

France: The French 2003 harvest was severely affected by a sequence of adverse weather conditions including severe frost and winterkill in the winter followed by dry and extremely hot weather in May, June and July. As a consequence barley production fell by 1.1 million tonnes (10%) to 9.9 million tones, HGCA revealed in a statement on February 9. This year barley domestic usage is expected to go up 0.8 million tonnes to 4.5 million tones, compared to 2002/03. Barley ending stocks are seen down 0.7 million tonnes to 1.1 million tonnes. The main impact of the smaller French harvest has been a sharp reduction in export availability with barley exports seen down 1 million tonnes (20%) to 4.1 million tonnes. Total wheat, maize and barley exports are seen 8.9 million tones (30%) lower to 20 million tonnes.

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 1.2700 February 11, 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	177.50	134.00	170.50
2RS	Prestige/Cellar	139.00	176.50	133.00	169.00
2RS	Aspen	137.00	174.00	132.00	168.00
2RS	Optic	137.00	174.00	132.00	168.00
2RS	Astoria	137.00	174.00	131.00	166.50
2RS	Cork	136.00	173.00	131.00	166.50
6RW	Esterel	135.00	171.50	123.00	156.50

nq - Not quoted

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

Graph of the week

Agenda

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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