More news is available on site www.e-malt.com  

• Belgian brewing giant, Interbrew S.A., confirmed on March 2 that it is in continuing discussions with AmBev regarding a possible significant transaction ...more info



• Canada: The Labatt Brewing Co. was fined C$50,000 on March 1, 2004 after pleading guilty to discharging a lubricant into the Canadian river, London's Thames River ...more info



• Denmark: The Danish Brewery Group A/S announced on 1 March 2004 that the Supervisory Board of AB Kalnapilio-Tauro Grupé, a subsidiary of The Danish Brewery Group, had decided to ...more info



• Danish beer giant Carlsberg plans to reduce debt before completing further acquisitions ...more info



• German brewery, Krombacher has not ruled out buying other breweries in the country as consolidation in the industry heats up ...more info



• UK: SABMiller believes that the low-carbohydrate beer market is set for strong growth, and suggests that Miller Lite — which already has about 20 % of that niche ...more info



• Brazil, São Paulo: Companhia de Bebidas das Americas – AmBev, the world’s fifth largest brewer and Brazil’s leading beverage company, announced on March 1 that its Board of Directors approved ...more info



• Fomento Economico Mexicano, S.A. de C.V. (FEMSA), began raising its beer prices in Mexico by around 5% earlier in February and will complete the price increase by the first week ...more info



• Brazilian brewing force, AmBev, and Belgian brewing giant, Interbrew, confirm that they are in discussions, which may lead to a significant transaction ...more info



• Australia: ABB Grain's chairman Trevor Day told on February 26 shareholders that merger talks with AusBulk were an exciting opportunity ...more info

Brewery News

Belgian brewing giant, Interbrew, and Companhia de Bebidas das Américas (AmBev) agreed on March 3 to a combination establishing InterbrewAmBev, the world's largest brewer with an unparalleled global platform that captures leadership positions in many of the world's most attractive markets, Interbrew posted on March 3. InterbrewAmBev will, on a 2003 pro forma basis, have a global market share of approximately 14%, combined revenue of ?9.5 billion (US$11.9 billion) and EBITDA of ?2.4 billion (US$3.0 billion). This platform, together with the combined group's enhanced financial strength, will enable InterbrewAmBev to leverage three global flagship brands Stella Artois, Beck's, and Brahma, while further strengthening specialty and local brands. The groundbreaking transaction brings together Interbrew, the world's third largest brewer with sales in over 140 countries, and AmBev, the world's fifth largest brewer with approximately 65% of the Brazilian market and leadership positions throughout Latin America. AmBev is one of the best-managed, most profitable brewers in the world with industry leading margins and a return on equity of over 30%. AmBev is also a leading soft drinks bottler in the region. Interbrew has been delivering industry-best compounded EPS growth of 24.6% over the last ten years through an outstanding record of developing new positions and building leadership brands in key markets worldwide. The formation of InterbrewAmBev will establish a top-tier performer in the global brewing industry, with the potential for the highest organic EBITDA growth of any major brewer. Interbrew and AmBev have estimated that the combined group can generate ?280 million (US$350 million) of annual synergies through a combination of technical, procurement, and other general and administrative cost savings, and commercial synergies including cross-licensing of existing brands. The transaction is expected to be earnings accretive to Interbrew shareholders as of 2006, post synergies and pre goodwill. For AmBev, the transaction is accretive in the first full year of combined operations...more info

Mexico: Shares of Mexican bottler and brewer Femsa surged almost 10 % to a record high of 54 pesos on March 1, after Belgium's Interbrew, the world's fourth-largest brewer, which owns 30 % of Femsa, said it was in discussions with fifth-ranking AmBev, of Brazil. The Mexican brewery's American Depositary Receipts jumped as high as $49.38 on the New York Stock Exchange. The stock benefited from speculation that Interbrew and AmBev might merge to create the world's biggest brewer, worth some $23 billion, traders said. Femsa, wich brews Sol, Tecate and Dos Equis beers, could benefit directly from the negotiations as Interbrew has a 30 % stake in the Mexican brewery, they noted. Interbrew, which makes Stella Artois, Beck's and Labatt Blue, has been unable to agree to a joint distribution deal with Femsa in the key U.S. market. Mexico's top brewer Modelo, which makes the popular Corona brand, gained 1.65 percent to 30.10 pesos on the Mexican stock exchange. "Beer companies are being revalued." said Edgar Amador, a stock market analyst.

China: Foreign brewers are aggressively tapping the China market, the largest-volume beer market in the world, with a population of of 1.3 billion and annual consumption of only 18.5 liters per person, Asia Times posted on March 2. The possibilities of profit make the mouth water, even more than a cold, frosty beer on a hot day. Foreign brewers are using multi-pronged strategies to gain entre to the market, and a new round of consolidations, mergers and acquisitions is likely to expand and reshape one of China's most fragmented industries. China has 500-1,000 breweries - no one really knows how many. The two biggest names, the largest beer makers, are Tsingtao and Guangdong Kingway, but no beer has a strong national presence. There are Great Wall, Green Bamboo, Golden Lion, Golden Lotus, Brigade Light and hundreds more. They tend to be strongly regional brands, a consequence of the market being fragmented by too many brewers, poor distribution and lack of a strong, established advertising culture. The latest entry into the acquisition fray is Edinburgh-headquartered Scottish & Newcastle, which is to acquire a 19.5 percent stake in Chongqing Brewery Co (CBC) to bolster its presence in China. S&N will initially pay 525 million yuan (US$63.4 million) for 50 million state shares at 10.5 yuan ($1.27) per share. For that S&N gets board representation and becomes the second-largest shareholder of the Shanghai-listed brewer, Chongqing, behind only the Chongqing Beer Group with the largest stake of 34.55 percent...more info

USA: Anheuser-Busch's position as the leading brewer in the U.S. may be safe, but its reign as the global leader may not be, The Motley Fool revealed on March 1. That warning comes after March 1 when Belgium's Interbrew, distributor of Labatt Blue, Rolling Rock, and Beck's, and Brazil's AmBev confirmed that they are in discussions that may lead to a "significant transaction." Clearly, a merger between the world's fourth- and fifth-largest brewers, creating the world's largest brewer, would qualify. Anheuser-Busch currently holds that No. 1 title. The company controls half of the U.S. domestic market, a share far greater than both Altria Group's part-owned Miller and Coors. In addition to Budweiser and Bud Light, the two global bestsellers, Anheuser-Busch owns large stakes in Tsingtao in China and Grupo Modelo in Mexico, the leading brewers in those countries. Despite having lost market share, AmBev accounted for 63.2% of the Brazilian beer market, the world's fourth largest, in the fourth quarter. Hypothetically, buying AmBev would expand Anheuser-Busch's reach nicely into South America. And while that reach is precisely why some see Interbrew and AmBev as a potential fit, Anheuser-Busch's ability to pay cash would be attractive to AmBev's shareholders. Of course, it's possible that Interbrew and AmBev aren't talking mergers at all. According to Reuters, "Other possible scenarios from the Interbrew-Ambev talks include a deal over Interbrew's stake in a Mexican brewer or even a distribution agreement." That might involve AmBev taking Interbrew's stake in Mexican brewer Femsa in exchange for AmBev shares.

Italian Beer

	Production, '000 hl	Export, '000 hl	Per capita consumption, litres
1993	11,715	217	25.1
1994	12,098	242	26.2
1995	11,990	439	25.4
1996	11,117	428	24.0
1997	11,455	261	25.4
1998	12,193	373	26.9
1999	12,179	379	27.1
2000	12,575	428	28.1
2001	12,782	502	28.9
2002	12,592	689	28.2
2003	13,486	951	30.0

Malt News

The world trade of malt in 2003/2004 was estimated by C.I.C. at 5.5 million metric tonnes versus 5.8 million metric tonnes of malt traded in 2002/2003.

Domestic EU malt markets for crop 2004, delivery 2005, are slow to start. That is understandable, said the analysts, because the EU comes from an extremely bad crop year into - as it is hoped – a normal one. Prices of malting barley of new crop are lower than those of old crop barley, but brewers hope they will go lower still. Maltsters find it difficult to speculate on lower markets five to six months before harvest. Early sales were done at price levels above EUR 290, average price, delivered brewery. But meantime offers declined to levels around EUR 270, and two larger brewing groups have requested offers.

Barley News

Canada, Manitoba: The barley grown by Saskatchewan farmers may not be an aphrodisiac, but a Molson Inc. beer ad campaign in the United States is turning the Canadian farm crowd on, Reuters revealed on March 01. A series of Molson USA print and radio ads points out that the zinc in Saskatchewan barley is also common to oysters and truffles, known for their amorous properties. "Here at Molson, we're constantly asked if our Saskatchewan barley is an aphrodisiac," one print ad states. "Those rumors are unfounded," the ad concludes. Dwayne Anderson, who grows barley on his farm near Fosston in northeast Saskatchewan, said he likes the attention the campaign is giving his crop and province, although he was skeptical about whether his crop has special powers. "We've never made it over a million people in Saskatchewan, so either we've been exporting a whole pile of people or this beer isn't working worth a hoot!" Anderson said. "It would be interesting to run a test, eh?" he said. The campaign was conceived when Molson USA sent its ad agency to Canada last year to learn about the ingredients of Molson brands. "That's when they kind of got on to, 'Hey, there are some other kind of humorous qualities about Saskatchewan barley that may be of interest to a guy (age) 21 to 29,'" said Steve Breen, vice-president of marketing for Molson USA. Rob McCaig, managing director of the Canadian Malting Barley Technical Center, said very little zinc from barley makes it into beer since most is used up by the yeast during the malting process. "It's to help yeast impotence -- it's to make sure the yeast keeps going," he said.

Australian grain marketer ABB Grain Ltd. said on March 03 that merger talks with AusBulk Ltd. have ceased after the two failed to reach an agreement over company valuations, according to Dow Jones. A further unresolved issue was the position of AusBulk's major shareholder, United Grower Holdings, in the post-merger entity. ABB and AusBulk, a grain logistics and malting concern, said last month that they were in preliminary merger talks. ABB Chairman Trevor Day said in a statement on March 03 that the directors remain strongly focused on strengthening ABB's business base while exploring considerable growth opportunities that exist within Australia and offshore.

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 1.2220 March 03, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	130.00	159.00	130.00	159.00
2RS	Prestige/Cellar	129.00	158.00	129.00	158.00
2RS	Aspen	128.00	156.50	128.00	156.50
2RS	Optic	128.00	156.50	128.00	156.50
2RS	Astoria	127.00	155.50	127.00	155.50
2RS	Cork	127.00	155.50	127.00	155.50
6RW	Esterel	nq	nq	119.00	145.50

nq - Not quoted

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

Graph of the week

Agenda

March 2004: PIVEX - INTERNATIONAL BREWING & MALTING FAIR ; New York City Real Beer Festival; Real Ale Festival; The Night of Large Thirst; Zythos Beer Festival; International course - Malting and Brewing Science; ALIMENTARIA 2004; FOODEX Japan 2004; ANTAD 2004; FOOD & DRINK EXPO 2004; Forth Russian Conference on Non-alcoholic Beer; 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: InterFood; INTERFOOD UZBEKISTAN /INTERFOODTECH 2004; INTERFOOD ST. PETERSBURG 2004; SIBFOODEXPO 2004; BEER. WINES & DRINKS International Beer; World Beer Cup; 2004 National Craft Brewers Conference; FOODASIA 2004; ASTANA FOOD 2004; INTERFOOD AZERBAIJAN/ INTERFOODTECH 2004; 43rd MBAA District Caribbean Convention; IFEX 2004; EXPOVIVIENDA 2004;
May 2004: EBC SYMPOSIUM 'FOOD SAFETY & TRACEABILITY'; CANADEAN'S 4th INTERNATIONAL BEER CONFERENCE; CITBUSMED 2004; PIVO, GASTRO, BAKERY / Bulgaria; ALCO + SOFT 2004 / Ukraine; FOOD & DRINKS/FOOD TECHNOLOGY 2004 / Moldova; Beer International Brewing Technology Exhibition / Russia;

More events are available on site e-malt.com

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