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• A small US brewer has had to cancel a campaign featuring the images of American explorers Lewis and Clark ...more info



• Following an agency review, Holsten UK has appointed Fallon London as their ad agency in the UK. Fallon London will work on Holsten Pils ...more info



• The Japanese brewery, Kirin, said on February 16 that it would raise its annual dividend payout to 13 yen per share this year ...more info



• Russia: Beer sales for the Baltika Brewing Company, Russia's leading brewery, rose slightly last year. In 2003, Baltika sold 16.17 million hectolitres of beer, 0.7% more ...more info



• USA: The board of directors of Adolph Coors Company declared on February 13 a quarterly dividend of 20.5 cents per share, payable March 15, 2004 ...more info



• USA, California: According to a report compiled by Beer Serves America, the beer industry is healthy economically for California's 1st District ...more info



• Scottish & Newcastle is planning to close the Fountain Brewery in its heartland of Edinburgh as part of a drive to save £25m through rationalisation ...more info



• The German brewery Feldschloesschen Brauerei AG is to invest about EUR 7.0 million (US$8.9 million) into a new filling line for beer in PET plastic bottles ...more info



• India, Mumbai: The visiting global chief executive of SABMiller plc Graham Mackay and the Shaw Wallace top brass led by executive director Komal C Wazir reviewed the progress ...more info



• Brazilian company, Cervejarias Kaiser Brazil, S.A. ("Kaiser"), a subsidiary of Molson Inc., has kicked off the Brazilian Carnaval season with the launch of its newly redeveloped Kaiser beer ...more info

Brewery News

Brazil's AmBev, the world's No. 5 brewer, said on February 16 it had regained a small share of Brazil's beer market in January but had not yet recovered what it lost in the fourth quarter, according to Reuters. Quoting data by market researcher AC Nielsen, Companhia de Bebidas das Americas (AmBev) said it gained 1.1 percentage points of the market share to end January with 64.3 %. But that was still less than the 66.1 % market share it held at the end of September and much less than the 70.1 % share it controlled at the end of June. AmBev has seen its market share squeezed by rivals, particularly local brewer Schincariol, which reinvented itself with the Nova Schin brand last year and won new customers with a hefty marketing drive urging Brazilians to "Try it". Ambev, which makes the lion's share of its revenues from beer sales in Brazil, said the AC Nielsen numbers showed Schincariol's market share had slipped to end January at 14.1 % from 15.2 % at the end of last year. AmBev said each percentage point of market share was equivalent to 100 million reais ($34.4 million) in sales. A press spokeswoman for AmBev said the AC Nielsen data showed Kaiser, the main Brazilian beer brand of Canada's Molson Inc., saw its market share rise to 9.6 % in January from 9.4 % at the end of last year. Shares for AmBev, which posts its first quarter results on March 3, were almost 1 % higher at 730 reais in mid-afternoon trade in Brazil. The country's Bovespa stock index was 1.9 % in the red at the time. The company dominates the Brazilian beer market with brands like Skol, Brahma, Antarctica, and Bohemia.

Scottish Courage Limited, the UK business of Scottish & Newcastle plc, announced on February 17 the closure of the 150-year-old Fountainbridge Brewery in Edinburgh, Scotland, and the acquisition of the smaller production unit of Caledonian Brewery as a dedicated ale brewery for Scotland. Scottish Courage intends to close its Edinburgh Brewery at Fountainbridge, with effect from December 2004. Against a background of the mature and competitive UK beer market, a priority for Scottish Courage in 2004 is to reduce costs in the UK business. There are a number of factors, including the Fountain Brewery’s high fixed operating costs, low capacity utilisation, and City centre location which combine to mean that continued production from the site is no longer commercially viable. Scottish Courage will enter into full consultation with unions and employee representatives. It is anticipated that the closure will result in 170 job losses at the site. Affected employees will be offered retraining, relocation opportunities within the Group or redundancy compensation. Production of the McEwan’s ale brands will remain in Scotland, and will be brewed in Edinburgh at the Caledonian Brewery. Lager production will be transferred to other Scottish Courage breweries in the UK. Scottish Courage has entered into an agreement with the Caledonian Brewery Limited, in which Scottish Courage will acquire the brewery in Slateford Road, Edinburgh. In addition Scottish Courage will use its distribution strengths by selling the Caledonian brands in the UK off-trade as well as taking the rights to sell the brands internationally...more info

Mexico's Modelo, the country's largest brewer and maker of the Corona brand, plans to expand a plant in the south of the country to add beer capacity by 2006. Chief Executive Officer Carlos Fernandez Gonzalez told a news conference Modelo was to beef up its Tuxtepec brewery in the state of Oaxaca by 9 million hectoliters (100 liters) per year to supply beer to southern Mexico and to export to Central and South America, Reuters revealed on February 16. "We are making an important investment in Tuxtepec in Oaxaca state where the brewery that today produces 7 million hectoliters will be expended to produce 16 million hectoliters," Fernandez said. Tuxtepec, which will be expanded by the end of 2006 to meet a long held goal of Modelo to reach a total capacity of 60 million hectoliters, will become the company's second largest brewery after its 20 million hectoliter Zacatecas plant. Jose Pares, Modelo's head of investor relations, told Reuters Modelo reached 91 % capacity usage at the end of last year up from 86 percent in 2002. Part of Modelo's business modelo is to expand ahead of increasing demand so as never to be in short supply which would hand market share to its main competitor, the beer arm of beverage giant Femsa. Pares said capacity usage at Modelo, half owned by U.S. based Anheuser Busch the world's No. 1 brewer, will drop again in 2004 because a fourth upgrade at its Zacatecas plant has been completed and there will be extra unused capacity. CEO Fernandez said growth for domestic sales volumes this year would be in line with earlier guidance given by Modelo of between 2 percent and 3 percent but he also said it could turn out higher. "The reality is that things are going very much in line with what we announced a few weeks ago," Fernandez said. "Let's remember that (growth) goes very much hand in hand with our economy and where we have a presence, but I'd say the figure of 3 percent is conservative," he added.

Singapore: Asia-Pacific Breweries Limited, jointly owned by Heineken and Fraser & Neave Ltd (F&N), revealed on February 13 that its first quarter group revenue grew 33% over the same period last year to S$431.3 million, with growth across all markets, helped by an early Chinese New Year and Tet. Group profit before interest, taxation and exceptional items (PBIT) increased 52% to US$64.6 million while attributable net profit before exceptional items rose 43% to US$28.9 million. Group operating expenses increased 27% due to higher volumes, impact of exchange and start-up costs of the Hatay brewery in North Vietnam. Share of joint venture and associated companies' profits rose 23%, primarily due to better performance from Malaysia. Profit attributable to outside shareholders increased 61% due to the strong performance from New Zealand and Vietnam. PBIT in Singapore declined by 5% due to lower domestic sales, which were offset by higher exports. Meanwhile PBIT grew 69% in Malaysia as a result of higher sales and by 19% in Papua New Guinea thanks to a stronger currency. In New Zealand PBIT grew by 33% as a result of higher sales driven by December festive promotions and increases in on-premise consumption. Indochina saw an earlier build-up for the Tet festive season and stronger demand, before the implementation of VAT in Vietnam in January 2004, boost December sales. In Cambodia, wedding promotions lifted Tiger and Anchor volumes. PBIT for the region improved 79% over last year. Total China sales volume increased by 38% resulting in a reduction of losses by 14%. In Thailand although revenue grew 9%, PBIT declined 14% due to higher marketing and overhead costs...more info

The UK top four brewers hold a market share of almost 80% of all British beer market. 10% of the market share is in the hands of three leading companies, each with a leading single brand, namely Guinness, Budweiser and Heineken. The other sector can be divided between two of the leading regional brewers, The Wolverhampton & Dudley Breweries Plc and Green King Plc that have a value share of around 5% and the other smaller breweries as well as importers have a value share of 5%.

Company	Market share, %
Scottish Courage Ltd.	26.4
Interbrew UK Ltd.	21.3
Coors Brewers Ltd.	20.1
Carlsberg Tetley Brewing Ltd.	12.0
Diageo, Anheuser-Busch, Heineken	10.2
Others	10.0

Malt News

EU: The new campaign of domestic malt sales is just beginning: crop 2004, malt delivery during the year 2005. The present new crop barley market would require malt prices of EUR 290 to 300, average price, delivered breweries in Central/Western Europe, according to analysts. The reality is different, as offers are available at least EUR 20 lower. And the large brewing concerns have not even started to bid yet.

Barley News

Australian barley production in 2003-2004 is estimated to be up 130 % on the 2002-03 harvest to 8.5 million tonnes, according to a report released by Australian Bureau of Agricultural and Resource Economics (ABARE) on February 17. Barley production is estimated to have more than doubled to 2.95 million tones in Western Australia - well above the previous largest harvest of 2.26 million tonnes in 2001-02. The increase in production reflects an expansion in the area sown combined with well above average yields. Generally there has been some downgrading of the barley crop from malt to feed quality reflecting high screenings (high proportion of small grain) and cleaving (where the grain splits open because of wet weather). While the area planted to barley in Victoria is estimated to have been 4 % lower at around 740 000 hectares in 2003-04, production is estimated to have more than tripled or up by 268 % to 1.65 million tonnes. In South Australia barley production nearly doubled in 2003-04 to 2.55 million tonnes, the second largest barley crop on record. Production was 8 % lower than the record crop in 2001-02. Overall the quality of the crop was good, although there were high levels of screening in some areas and the protein levels were variable. In New South Wales barley production is estimated to have increased by 187 % to over 1.14 million tones in 2003-2004. Grain quality was variable across the state, with high levels of screenings in the north. A significant proportion of the crop is of malting quality. In the south of the state, the grain was of below average quality, with much of the crop going to the domestic feed grain market. In Queensland Barley harvest is estimated to be 38 % higher at just over 0.2 million tonnes.

China barley imports are estimated at 2.023 million tonnes for 2002/2003 crop year (July/June). It looks almost impossible that the totals for 2003/2004 will reach 2 million tonnes again, analysts revealed. Anyway, stocks in China must have run down to bare minima. It is said that Chinese barley and adjuncts have gained to the detriment of imported barley, but on the other hand the Chinese beer output is also rising constantly, last year by 5,6 million hl in spite of the SARS disease early in the year. Since 2000 beer output went up by 18 million HL. In theory that required additional barley imports of 350,000 tonnes, which, of course, were never realized. During the past months shipments of Australian and Canadian malting barley to China were done by container, as it was cheaper than bulk freight. Reported prices CIF China were around US $ 190.

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 1.2838 February 18, 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	179.50	134.00	172.50
2RS	Prestige/Cellar	139.00	178.50	133.00	171.00
2RS	Aspen	137.00	176.00	132.00	169.50
2RS	Optic	137.00	176.00	132.00	169.50
2RS	Astoria	137.00	176.00	131.00	168.50
2RS	Cork	136.00	174.50	131.00	168.50
6RW	Esterel	135.00	173.50	123.00	158.00

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: New York City Real Beer Festival; Real Ale Festival; The Night of Large Thirst; Zythos Beer Festival; 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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