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• Bulgaria's plan to launch a special "NATO" range of beer and wine ahead of the country's accession to the alliance was not welcomed in Brussels ...more info



• China: Huiquan Brewing Group announced on March 25 that its 2003 net profit fell by a massive 83.4% to RMB11.52 million from RMB69.55 million versus last year ...more info



• The Chinese investment group Sichuan Blue Sword Group is to buy a controlling stake in the country’s largest supplier of beer barley and hops, it has been reported ...more info



• Great Britain's Wolverhampton & Dudley Breweries Plc is on the prowl to buy more pubs after first-half trading met expectations, the country's biggest regional brewer said on March 25 ...more info



• Scottish & Newcastle announced on March 24 that its UK operating division, Scottish Courage, has received notice that the Office of Fair Trading (OFT) has approved the joint application ...more info



• UK: UBS investment banks posted on March 24 that it had raised its price target on the world’s second biggest brewer SABMiller to 590 pence a share from 560p ...more info



• Spain: Agriculture and Agri-Food Canada announced recently that two-thirds of beer in Spain is consumed through the HRI sector. According to the same source, Spain has a large beer market ...more info



• China: Two major Chinese brewers have denied being part of a price cartel formed to push up beer prices, according to reports of the news agency AFX Asia. Tsingtao and ...more info



• Ukraine: In February 2004 beer imports of Ukraine increased by 21.8% or with 461.87 thousand litres versus January 2004 up to 2,581.17 thousand litres ...more info



• Beer consumption in France decreased by 25% in the last 25 years. In 2003 France consumed 34.7 litres per capita ...more info



• Miller Brewing Co. needs to create a stronger partnership with its independent distributors or face increased market dominance by industry leader Anheuser-Busch Cos ...more info



• Czech Republic: A family brewer in Chodova Plana, in the western Czech Republic, has invented a new way to enjoy the lager flavour on a slice of toast ...more info



• Carlsberg maintained on March 23 its operating profit guidance for this year, and expects its profits before items to increase. In the prospectus for its share offering ...more info



• Russian brewery ZAO Volga sold 70 million litres of beer in 2003, a 47% rise versus last year, the company told Russian media ...more info



• Russia: German beer brand Kaltenberg, 600 years old, is to be brewed in Siberia, Russian Beer Union reported on March 22. Sobol Brewery based in Novosibirsk will output the famous ...more info

Brewery News

China: Carlsberg A/S announced on 26 March 2004 that Carlsberg is in dialogue with the Lanzhou Huanghe Group about acquiring a share of the company’s brewery in the Gansu province in the western part of China. In 2003, the brewery’s beer sales volume was approx. 1 million hl and it has a 43% market share of the Gansu province. Negotiations are developing positively. However, presently there are no final agreements about form or conditions for a co-operation, and therefore Carlsberg does not wish to provide further information until negotiations are finalised. Carlsberg Breweries will set up a 500 million yuan ($60 million) beer-making venture with China's Huanghe, as the Danish firm tries to keep up with rivals in the world's top beer market, Huanghe said on March 26, Reuters revealed. Carlsberg signed a letter of intent with Lanzhou Huanghe Enterprise Co Ltd in late February to set up a 50-50 venture with an initial annual capacity 500,000 tonnes, Huanghe said. It did not say when the venture would start up. Carlsberg, the world's sixth-biggest brewer, has embarked on a buying spree in China, where demand is growing at 6 % annually, after a failed attempt to enter the market four years ago, Reuters commented. Carlsberg, which said last year it could spend up to 2.5 billion euros on acquisitions, has bought a handful of breweries over the past year in China and now runs several medium-sized, local breweries across the country...more info

Poland will hold its current excise tax on beer at the maximum level permitted by law, despite calls to lower it from brewers fearing that customers will start buying cheaper beer in neighboring countries after Poland joins the European Union in May, Interfax-Europe posted on March 24. "We have a current rate set and we are not about to change it on May 1," Finance Minister advisor Jaroslaw Neneman told reporters. Currently, the excise tax on beer is set at an estimated PLN 0.43 per bottle, versus roughly PLN 0.18 in Germany, PLN 0.19 in Czech or PLN 0.20 in Slovakia. When the country joins the EU, Poles will be able to bring more than 100 liters of beer across the border per day without paying a Polish tax on it. The government had originally said it wouldn't implement the maximum excise tax. The ministry dismisses claims that the high excise tax will substantially stymie Polish brewers' ability to compete on an international market, responding instead that the levied excise and VAT taxes together constitute a mere 36% of the end price of a half-liter of beer. The ministry plans to monitor the beer market after EU accession on May 1 and said is prepared to lower the tax, if the market slumps "significantly." "A 10% market fall would be significant, but this does not mean we will automatically act then," Neneman said. The Finance Ministry is counting on PLN 2.2 bln of revenue in 2004 from the excise tax on beer, similar to 2003. The excise tax on beer has been at current levels since 2001...more info

Colombian brewer Bavaria said on March 23 it aimed to become the world's seventh-largest brewer within three years, up from its current ranking as No. 10, as Latin American populations grow and beer consumption increases, according to Reuters. After spending $1.1 billion on expansion and buying brewers in Peru, Ecuador, Panama and Costa Rica to double its output over the past three years, Bavaria will need no further acquisitions to take it to No. 7, President Ricardo Obregon said. He said Bavaria, controlled by Colombian businessman Julio Mario Santo Domingo, was currently the 10th largest brewer in the world following the merger of Brazil's AmBev and Belgium Interbrew. "This is an absolutely feasible challenge, because the brewers which are in front of us don't produce much more than the 27.8 million hectoliters of beer products we produce and sell," Obregon told a news conference after a shareholders' meeting. The company's shares rose 0.77 % on the Colombian Stock Exchange to 18,260 pesos after Obregon spoke. According to independent industry research body Canadean, Bavaria is only the 15th biggest brewer in the world, but Canadean listed Bavaria's total brewing at only 22 million hectoliters in 2003, considerably below Bavaria's own figure. The Colombian brewer has an advantage over its global competitors in that populations are growing in its Latin American markets and beer consumption per capita is relatively low, with room for expansion...more info

Britain's biggest brewer Scottish & Newcastle Plc is merging its two UK supply arms Waverley and the Beer Seller to create the nation's biggest drinks wholesaler, leading to cost savings and job cuts, Reuters revealed on March 25. The brewer of Kronenbourg, Foster's and John Smith's beers said on March 25 the merger would create a 450 million pound ($818 million) annual turnover business and would yield cost savings of at least five million pounds per year by 2006. S&N's original wine-led Waverley business will merge with the Beer Seller, which S&N acquired with the purchase of cider company Bulmers in mid-2003, to create a wholesaler of beer, cider, wines, spirits and soft drinks. The merger benefits are included in the brewer's overall plan to cut its UK supply cost base by one-quarter, or 45 million pounds. After a number of costly delays, the target date for this restructuring had to be pushed out to 2006. John Dunsmore, managing director of UK beer unit Scottish Courage, said he was determined to put the streamlining of this supply line back on track now that he had a different management team in place, adding it was in line to meet the cost target. "We believe we will get the 45 million pound cost savings on time without closing another brewery," he said in an interview. Last month, the brewer announced the closure of its Edinburgh brewery by the end of 2004 to save 10 million pounds a year by 2005, but there was speculation one of its four English breweries, such as Newcastle in northeast England, may close...more info

Brazil: Companhia de Bebidas das Américas – AmBev, the world’s fifth largest brewer and Brazil’s leading beverage company, announced that its Board of Directors approved on March 22 a new share buyback program limited to R$500 million. The program is valid for a period of 60 days in accordance with CVM (Brazilian Securities and Exchange Commission) Instruction 10/80. Should the total amount used to acquire shares be below the established limit over the next 60 days, the Board of Directors may continue to renew the buyback program for successive 60-day periods. Over the next 60 days, AmBev may repurchase up to 1,408,728,295 preferred shares, representing 6.58% of the preferred shares free float (i.e. 21,420,871,374 preferred shares). Through the frequent issuance of new share buyback programs, AmBev keeps its policy of continuously enhancing shareholder value by combining an efficient use of its strong cash flow generation with a wise management of its capital structure, as evidenced by its investment grade rating in local currency. After investing in core activities that increase profits to shareholders, the Company also remains committed in returning cash to shareholders through share buybacks and dividends.

Malt News

Russia: OOO Nevsky Bereg, controlled by Breweries Supply International (BSI), is to invest about EUR 35 million in building a malting plant in St. Petersburg, Delovoy Petersburg posted on March 24. According to the government decision from March 9 2004 the company was handed a land with mooring complex in the Nevsky district of the city. Its area comes to about 87 thousand m2. German company Buhler will supply the new plant with equipment through leasing scheme. Foreign barley is supposed to be used as raw material. It is expected the production capacity of the plant to reach 105 thousand tonnes of malt per annum by 2005. However, according to experts’ estimate, production volumes will come to 200 thousand tonnes of malt per year and the investments to $ 100 million. Financing will be realized from the own funds of Breweries Supply International (BSI Group) and from the credits of a Russian bank, which name was not revealed. BSI is the main owner of OOO Nevsky Bereg and has been activating for ten years on Russian market in supplying foreign malt and barley to Russian brewers. According to BSI, the new plant will allow to decrease the volumes of imported grains and to lower the expenses of brewers on raw materials. BSI also said that it owns another small malting plant, however the spokesman didn’t revealed its location...more info

In 2003 Russia produced about 500 thousand tonnes of malt, while Russian brewers required 1.3 million tonnes of malt, local analysts revealed. According to them only 15 regions of Russia have favorable climat conditions for growing malting barley. Now about 70% of brewing barley is imported from Europe. Buying foreign barley Russian brewers lose about US$ 100 million per year; meanwhile buying national one the brewers save US$ 50-100 per tonne of malt, Russian experts said. They added that by 2010 the problem of barley shortage is going to be solved and Russia could even export malting barley. Regarding hop, Russian brewers need about 12 thousand tonnes per year, however only 700-1000 tonnes of hop are produced in Chuvashia. Because of climat conditions Russia cannot stop importing this product.

Barley News

UK: The December HGCA Surveys of Agriculture provide the first official statistical estimates of planted area for the approaching harvest, detailing planted area as at 1 December each year. Total UK winter barley plantings have fallen 7.1 %, with a decline in planted area of 34,000 hectares. Winter barley plantings up to December 2003 are estimated to be 449,000 hectares (483,000 hectares to December 2002). Over 80 percent of winter barley plantings are in England. England saw a reduction of 7.9 percent on the December 2002 area, with planted area in England at December 2003 estimated at 375,000 hectares (407,000 hectares in December 2002). Scotland’s winter barley plantings are reported to be 2.5 percent lower in December 2003, a fall of 2,000 hectares, leaving a planted area of 59,000 hectares (61,000 hectares in December 2002).Winter barley plantings in Wales and Northern Ireland show no change and remain at 15,000 hectares at December 2003. Cropping decisions may have been driven by market prices at planting time. In early September 2003 UK ex-farm barley prices were around £75 per tonne. At the same time in 2002 when farmers were making planting decisions for harvest 2003, ex-farm barley prices were lower at £55 per tonne, HGCA posted. UK third country barley exports for July to January 2003/04 totalled 75,000 tonnes, compared to 18,000 tonnes last year for the corresponding period. Coceral estimated the EU-15’s 2004 barley production at 48.6M tonnes (+5.4 per cent). In its March report Strategie Grains adjusted its estimate for the 2004 EU-25 grain crop 1.5M tonnes down to 269M tonnes. Barley output is estimated at 57.5M tonnes (31.6M in ’03).

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 1.2140 March 26, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	123.50	150.00	128.00	155.50
2RS	Prestige/Cellar	122.50	149.00	127.00	154.50
2RS	Aspen	121.50	147.50	126.00	153.00
2RS	Optic	121.50	147.50	126.00	153.00
2RS	Astoria	120.50	146.50	125.00	152.00
2RS	Cork	120.50	146.50	125.00	152.00
6RW	Esterel	nq	nq	117.00	142.50

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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