Base Currency: Euro, EUR on 08-September-2004 1 EUR = 1.2106 USD 1 EUR = 0.6829 GBP 1 EUR = 1.5585 CAD 1 EUR = 1.7441 AUD 1 EUR = 132.30 JPY 1 EUR = 3.5228 BRL 1 EUR = 35.3858 RUB	Base Currency: US Dollar on 08-September-2004 1 USD = 0.8262 EUR 1 USD = 0.5640 GBP 1 USD = 1.2874 CAD 1 USD = 1.4407 AUD 1 USD = 109.29 JPY 1 USD = 2.91 BRL 1 USD = 29.23 RUB
EUR/USD Chart

Russia: SUN Interbrew is considering building a new brewery in the Siberian region of Irkutsk. A statement from the region’s administration said that SUN Interbrew’s board of directors will make a decision on the brewery’s construction at a meeting in Belgium later this month or early next. The statement quoted the first deputy of the region’s administration, Alexander Bitarov. Russian press agency Interfax said yesterday that representatives of OAO SUN Interbrew, SUN Interbrew’s subsidiary in the country, offered to cooperate with the Irkutsk regional administration two months ago. The regional authorities prepared six construction sites for the brewery and, after talks, the company said it was interested in cooperating with the Irkutsk region. Interfax also claimed that SUN Interbrew has already approved in principle plans to build a brewery costing €50m in Siberia. SUN Interbrew was attracted by highly qualified staff in the region and also by water from nearby Lake Baikal, the deepest lake in the world, which it could use for producing beverages, the release said. “The project is economically very interesting for our region. Specialists estimate that the region’s treasury will get some RUB300m (US$10.27m) a year from excise taxes alone,” the release quotes Bitarov as saying.

Poland: The position of the big three breweries in Poland has been strengthened by EU membership, while some of the industry's smallest players have paid the ultimate price, according to the Warsaw Business Journal. There are about 70 brewers in Poland at the moment. The three international brewing giants-SABMiller (Lech, Tyskie and Dojlidy), Heineken (EB, Warka and Zywiec) and Carlsberg (Bosman, Okocim and Piast)-own 30 businesses between them. Forty other small and medium-sized firms together produce less than 20 million liters per year. But beer production has risen solidly over the last decade and now represents the fastest-growing industry in the food sector. According to the Polish Brewery Organization, production has more than doubled in the past 14 years, from 1.14 billion liters in 1990 to 2.73 billion liters last year. The first quarter of 2004 saw brewery sales rise by 6.15 percent year-on-year. Beer consumption in Poland has increased from 30 liters per person annually in 1990 to 69 liters in 2003, but it is still below the levels found in most western European countries. When the old iron gates of the Stanley Brewery shut for the last time, a chapter in Poland's history ended. So did the last vestige of hope for dozens of workers and their families, the Warsaw Business Journal posted on September 6. Nestled in the rural backwater town of Chojnów, in the Dolnoœlšskie region, the institution had been producing the much-prized golden, creamy brews since 1871, when this part of Poland was still under Prussian rule. During the company's 133-year existence, the business survived two world wars and 50 years of communist rule. It could not, however, survive the pressures of European integration and finally folded in May of this year. It is a similar story at the Romus Brewery, in Dšbrowa. "We couldn't afford to produce beer any more after the first of May. Our only chance would have been to decrease prices, but you can't afford to go on doing that forever," a spokesman told Gazeta Wyborcza. EU membership sounded the death knell for three other small independent breweries in Poland and increased the financial pressure on several others to the point where their future plans are now in jeopardy. The president of the Association of Polish Regional Breweries, Andrzej Olkowski, says: "Beginning in May, brewers had to start providing warehouses for stock so that it could be assessed for excise tax, and this was the major change for us. Many could not afford it." "We are talking about between five and ten breweries that were in this situation," says Olkowski. "The Romus Brewery and Chojnów certainly closed after we joined the European Union, and there were some more. We counted five breweries that have closed in total." ...more info

New Zealand: DB Breweries will disappear from the New Zealand Stock Exchange this week, after over 70 years as a public company. Parent company Asia Pacific Breweries has succeeded in its takeover bid and has just 1.92 % left to mop up. The offer closes today and the company will delist within days. Asia Pacific Breweries reached the 90 per cent ownership level, which clears the way for compulsory acquisition of remaining shares, last month. The deal will cost the Singapore-based company NZ$110 million for the 23.09 per cent of DB it did not already own. DB, one of the country's oldest listed companies, was valued at NZ$479 million in the NZ$9.50 a share takeover. The brewer's story began in 1929 when William Coutts and his three sons established Otahuhu's Waitemata Brewery. Coutts later merged his business with that of Henry Kelliher, the owner of Auckland wholesale beer distributor Levers & Co. In 1930 a prospectus was issued offering £75,000 worth of shares in Dominion Breweries. This week's full takeover will close a intriguing chapter in the company's public history which began when Asia Pacific Breweries bought into DB Breweries from Brierleys in the early 1990s. Asia Pacific Breweries bid for control in 2000, and paid $2.80 a share to raise its stake from 58 per cent to almost 77 per cent.

Japan: Kirin Brewery Co Ltd, Japan's biggest brewer, aims to more than double overseas sales by 2010 by buying foreign breweries, Kazuyasu Kato, the company's managing director said. "Asia has been the focus of our overseas expansion," Kato told Bloomberg Television in Tokyo. "We have acquired breweries with solid shares of the local market. We will try to more than double our overseas sales by 2010." Kirin's overseas sales were 114 billion yen (US$1 billion), or 15 per cent of total sales, in the first half ending June 30, compared with 101 billion yen (US$89 billion), or 13.8 per cent, a year earlier, reported China Daily. Japanese breweries such as Kirin and Asahi Breweries Ltd, the nation's second largest, are expanding overseas and diversifying alcoholic and non-alcoholic products to attract more consumers, amid shrinking domestic demand for regular and low-malt beer. Kirin plans to spend 100 billion yen (US$88 billion) by December 2006 on overseas mergers and acquisitions. Shipments of regular and low-malt beer by Japan's five largest brewers declined 6.4 per cent to 224.30 million cases in the first half from the previous year, according to the Brewers Association of Japan and the Brewers Council of Happoushu Taxation. Kato said domestic demand for beer is in decline, although shipments rose 9 per cent in July amid hotter-than-usual summer temperatures.

Netherlands: Heineken NV, the world's third-biggest brewer, said first-half profit fell 27 % after the euro rose against the dollar and beer consumption slowed in Western Europe. Net income declined to 293 million euros ($354 million) from 400 million euros in the first six months of 2003, the Amsterdam- based company said in an e-mailed statement. The Dutch maker of Amstel lager suffered in Europe, where it makes about two-thirds of its sales, as wet summer weather and slower economic growth led consumers to spend less time and money in bars. Belgian competitor Interbrew SA took control last month of Cia. de Bebidas das Americas, Latin America's largest brewer, in a $11.2 billion combination to make up for declines in Europe. “Poor weather has been unhelpful, but we think there are some structural issues holding back Europe as well, particularly the poor demographic trends and the rapid growth of discount retailers,'' Alexandra Oldroyd, an analyst at Morgan Stanley in London who has an ``equal-weight'' recommendation on the stock, wrote in a research note Monday. Heineken was expected to say that profit dropped 26 percent to 294 million euros, according to the median estimate of seven analysts surveyed by Bloomberg News. Shares of Heineken have risen 2.1 percent this year in Amsterdam, while the Bloomberg Europe Beverages Index has increased 9.3 percent. Interbrew, now known as InBev, is this year's best performer on the index with a gain of 26 percent. Heineken, which trails Anheuser-Busch Cos. and InBev in size, said in February that profit before one-time items and goodwill amortization would decline in 2004 as a result of the dollar's drop against the euro and other currencies. Profit by that measure fell 4.5 percent to 319 million euros in the first half and the company reiterated its outlook for the year... more info

USA: Mexico's Corona Light is the most popular imported light beer in the United States, but you can't get it south of the border, where beer drinkers order their brews in pairs yet rarely reach for a low-calorie alternative, The Associated Press posted on September 7. Mauricio Brocado, a Mexico City analyst who tracks Mexican brewers for brokerage firm Deutsche-Ixe, said light beer accounts for less than 2 % of the country's $3 billion domestic beer market. At the same time, Corona Light had $47 million in sales in the United States in the first half of this year, up 9 % from a year earlier, said Bump Williams, of Information Resources, an international marketing research organization. Mexico's biggest brewers, Corona's manufacturer, Grupo Modelo, and the brewing unit of bottler Fomento Economico Mexicano (FEMSA) are trying to convert more Mexicans into light beer drinkers, with ad campaigns that give the brew a sharper, edgier image and that convey the idea that less really is more. And it's quite a challenge. Demand for light beer is so minuscule that Corona Light -- the 14th-best-selling beer in the United States and among America's fastest-growing imported brews, according to Williams -- is produced for export only. Mexico's bestselling light beers are Modelo Light and FEMSA's Tecate Light. "We look at light with a certain amount of distrust," Brocado said. "Those who drink beer, drink beer -- not something seen as less than a normal beer." Brewers in Mexico are dealing with the same marketing issues that American beer makers had decades ago, when they were struggling to get consumers to try light beer. It was seen by many as a watered-down alternative until the early 1980s, when Miller Lite featured sports stars in the popular "Tastes Great!"/"Less Filling!" ads. "That convinced guys it was OK to drink light," said Julie Bradford, editor of the Durham, N.C.-based All About Beer Magazine.

Malt News

EU export licence bookings were 422,000 tonnes during July 1 – August 24, of which 360,000 tonnes in the EU-15 and 62,000 tonnes in the new member countries. At the pace of the July/August fixations the total for the crop year would arrive at 2.33 million tonnes for the EU-15, but admittedly such a figure is very hypothetical so early in the campaign. It is impossible to make any prediction for the new countries. The Czech Republic booked 34,000 tonnes in May/June, but only 9,000 tonnes in July/August. Slovakia reportedly fixed 30,000 tonnes in May/June in Austria, as their own administration was not yet operational. EU malt export statistics for 2003 are regrettably incorrect or at least very doubtful, according to some market analysts. Total exports to third countries were as per Euromalt 2,244,558 tonnes but as per Eurostat 2,520,796 tonnes. The biggest difference in country figures exists for Belgium. Euromalt exports 328,235 tonnes Eurostat exports 721,292 tonnes. Euromalt has probably not considered French exports, customs-cleared in Belgian ports, e.g. 121,000 tonnes for the Philippines. Total exports to Brazil (as per Eurostat) were 306,000 tons, of which 163,000 tonnes from Belgium, which are considered far too high by the relevant services (port silos, forwarders). Customs offices and national licence authorities have “confirmed” Eurostat figures for their respective countries.

Barley News

EU: The EU barley crop of more than 60 million tonnes will produce – on paper – a surplus of 7.2 million tonnes. Feed use will decline from 40.2 to 37.6 million tonnes, because more feed wheat is available than last year. Export licences booked in July/August are a mere 82,000 tonnes. Larger exports would only be possible a) with restitutions b) if the Euro declines against the US Dollar c) if world markets become much firmer. At present all these options look unlikely so that major sales to intervention must be expected.

A month ago the EU expected a huge crop of excellent quality barley. The crop size is still the same, but qualities are very good mainly on the Continent. Ireland, the U.K., Scandinavia and the Baltic countries had to battle against adverse weather since weeks so that some of their malting barleys show damages viz. sprouting, splits, fusarium and will be downgraded to feed barley. It is the opposite situation of last year, when we had the best crop results in Northern Europe.

Spain gathered a large crop with a good share of malting barley. Selection nevertheless is problematic, as protein contents are low, partly too low (less than 9 %), particularly in the South of the country.

U.K.: Winter barley has been gathered in good quality. Spring barley harvest advanced slowly, constantly interrupted by rains, which led to damages, where ripe fields could not be combined. Harvest is now virtually finished in England and in the Borders, Scotland has cut approx. 50 %. The expected export surplus has dwindled to rather small quantities. U.K. industries will use all their available winter barleys.

Denmark: The average estimate is that one third of the crop is still in the fields. A pessimistic view is that this barley may not be of malting quality, however, forecast sunny and dry weather early September will enable farmers to gather the rest of the crop under favourable conditions.

Northern Europe: It is impossible today to present a clear picture of the malting barley supplies. Remind you that the U.K. and Scandinavia also reported receivals of good qualities, where they were not at all expected. Therefore the next few weeks will tell the truth.

Black Sea: Barley exports are estimated to reach 5.5-6.0 million tonnes from the crop of 2004. Rumours are that Russia and Ukraine already sold 3 million tonnes for export, according to market analysts. Prices never reached the low levels of two years ago and present buyin levels are, delivered port silos: US$ 92-97.50 for prompt loading, US$ 88-92 for later positions. Ukrainian government bodies bought 2.3 million tonnes and will buy another 1.2 million tonnes of food grains for the national reserve, which, no doubt, has a stabilizing effect on all grain markets. Russia has harvested 800-850,000 tonnes of malting barley under good conditions. Nevertheless Russian maltsters admit that EU barleys are of better quality, giving better malt results. Total malting barley needs in Russia are now 1.2 million tonnes. Present domestic markets run from (equivalent) EUR 90 to EUR 100 exw, excl. VAT. The trend is firmer, prices are expected to rise by a substantial margin during the next few months.

Ukraine: The barley crop is of variable quality, but domestic needs of 300,000 tonnes will be covered, a small surplus may be available. Market is around EUR 90 EUR 95 exw.

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 2003 are not quoted.

Malt Price Evolution

	Maximum average price for 2RS Malt, crop 2003: 308.50 EUR/tonne - in November 2002
	Minimum average price for 2RS Malt, crop 2003: 245.0 EUR/tonne - in July 2004
	Maximum average price for 6RW Malt, crop 2003: 280.50 EUR/tonne - in November 2002
	Minimum average price for 6RW Malt, crop 2003: 237.50 EUR/tonne - in July 2004

Source: E-malt.com

Malting barley prices. French barley prices.

Nominal prices.

EURO = USD 1.2106 September 08, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	nq	nq	113.00	137.00
2RS	Prestige	nq	nq	112.00	135.50
2RS	Cellar	nq	nq	112.50	136.50
2RS	Aspen	nq	nq	111.50	135.00
2RS	Optic	nq	nq	111.50	135.00
2RS	Astoria	nq	nq	111.00	134.50
2RS	Cork	nq	nq	111.00	134.50
6RW	Esterel	nq	nq	102.00	123.50

nq - Not quoted

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

Table of the week

EU malt export licence fixations: (in tonnes)   2000-2001  2001-2002   2002-2003   2003-2004  July 01, 2004 - August 24, 2004    France   523,190  701,134  661,772  774,761  115,490   Germany   305,980  468,314  408,063  422,047  50,193   Belgium   277,584  296,368  287,850  317,292  20,225   U.K.    254,793  350,621  294,995  443,501  92,179   Finland   65,550  91,890  100,758  114,165  13,000   Denmark    52,326  96,812  94,791  90,452  18,640   Sweden   50,847  101,000  76,916  78,369  4,190   Netherlands   54,835  51,310  66,219  80,703  8,540   Ireland   26,003  35,145  31,140  38,900  34,404   Austria   4,850  8,840  8,620  60,211  2,525   Spain   3,000  2,400  5,640  10,000  -   Greece   1,800  1,744  1,306  979  -   Portugal   340  221  85  695  85   Italy   -  -  2  -  -   Total old EU   1,621,098  2,205,799  2,038,157  2,432,075  359,471   New EU members  May-June, 04     Czech Republic         34,340  9,007   Poland         7,604  6,089   Hungary         2,830  19,323   Slovakia         1,000  28,070   Total EU    1,621,098  2,205,799  2,038,157  2,477,849  421,960    Total Wheat malt, tonnes   Total 2000-2001    4,686  Total 2001-2002    12,805  Total 2002-2003    30,908  Total 2003-2004    15,768  July 01/2004 – August 24/2004    1,264        Total Roasted malt, tonnes   Total 2000-2001    23,967  Total 2001-2002    23,480  Total 2002-2003    23,603  Total 2003-2004    24,438  July 01/2004 – August 24/2004    5,168  Graph of the week Agenda September 2004: 6th BELGIAN BEER WEEKEND; China Brew 2004 / China Beverage 2004; International Brewery and Soft Drinks Industry Exhibition; FOOD & BEVERAGE PROCESSING & PACKAGING INDONESIA 2004; Pivoindustria International Beer Industry Exhibition; National Beer Wholesalers Show 2004; PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004; Barley Malt Quality Evaluation Short Course; EUROMALT BARLEY SEMINAR 2004; bevex Beverage Trade Fair; InterBev 2004; YUGOSLAVIA INTERNATIONAL FAIR OF FOOD & BEVERAGES 2004; BevExpo 2004; Great American Beer Festival; OCTOBERFEST Famous German Beer Festival; October 2004: OCTOBERFEST Famous German Beer Festival; Great American Beer Festival; bevex Beverage Trade Fair. Germany; Great Welsh Beer & Cider Festival; ST. PETERSBURG FOOD SALON 2004; Beer Fair. Spain; Expo Bebidas Beverage Exhibition. Mexico; EXPOALIMENTOS Y BEBIDAS 2004. Panama; Fall Eastern PA Breweriana; Knoxville Brewer's Jam - A Memorial to Tom Rutledge; INTERPRODTECH Food and Beverages Processing Exhibition. Russia; Alko and Drinks Show Alcoholic Beverages and Non-alcoholic Drinks Exhibition. Russia; WORLD FOOD KAZAKHSTAN 2004; PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004. Canada; More events are available on site e-malt.com