Base Currency: Euro, EUR on 05-October-2004 1 EUR = 1.2289 USD 1 EUR = 0.6886 GBP 1 EUR = 1.5644 CAD 1 EUR = 1.7009 AUD 1 EUR = 136.28 JPY 1 EUR = 3.4729 BRL 1 EUR = 35.9158 RUB	Base Currency: US Dollar on 05-October-2004 1 USD = 0.8141 EUR 1 USD = 0.5606 GBP 1 USD = 1.2730 CAD 1 USD = 1.3841 AUD 1 USD = 110.96 JPY 1 USD = 2.8260 BRL 1 USD = 29.226 RUB
EUR/USD Chart

Germany: Heineken N.V. announced Tuesday October 5 that Brau Holding International AG (the joint-venture between Heineken (49.9%) and Schörghuber Corporate Group (50.1%)) has come to an agreement to acquire 100% of the shares of Fürstlich Fürstenbergische Brauerei KG. The transaction is subject to regulatory approval. Commenting on the deal, Jean Francois van Boxmeer, member of the Executive Board of Heineken N.V. said; "This acquisition expands Brau Holding International's presence in Southern Germany. It will deliver synergy gains through both cost reductions and central purchasing. Furthermore the Fürstenberg brand fits well within Brau Holding International's portfolio of German premium brands." As agreed by both parties the acquisition price will not be published. The deal will be partly financed by debt and partly from available cash resources. The Fürstlich Fürstenbergische Brauerei KG is centrally located in Baden Württemberg in the southern part of Germany. The company had a sales volume of 700,000 hectolitre in 2003 and operates one brewery in Donaueschingen with a production capacity of 1 million hectolitre. The brand portfolio includes the company's leading brand Fürstenberg and the brands Riegeler, Bären Pilsner and Qowaz (cola/beer mix). The Fürstenberg brand is also exported to ItalyFranceSwitzerlandUK and Spain. Heineken has the widest global presence of all the international brewing groups, operating in over 170 countries. In 2003 Heineken brewed a total of 109 million hectolitres of beer at over 115 breweries in more than 65 countries. Net turnover amounted to EUR 9.2 billion and net profit to EUR 798 million. Heineken employs 60,000 people. Heineken strives for an excellent sustainable financial performance through marketing a portfolio of strong local and international brands with the emphasis on the Heineken brand, through a carefully selected combination of broad and segment leadership positions and through a continuous focus on cost control. For 50 years, the Schörghuber Corporate Group has been involved in the business divisions hotel, aircraft leasing, beverages, real estate and construction with great success. Numerous companies with approximately 5000 employees are part of this corporate group, whose field of activities has been expanding onto international terrain since the 1980's. The Brau Holding International AG is the main holding for the beverage business division and is one of Germany's leading beverage enterprises. Its holdings include Munich's traditional brewery group, "Paulaner Brauerei Gruppe", the Kulmbacher Group and Karlsberg.. In the beer sector alone, the company is represented by such well-known brands as Paulaner, Hacker-Pschorr, Thurn und Taxis, Auerbräu, Kulmbacher, EKU, Mönchshof, Kapuziner, Sternquell,Braustolz, Karlsberg and Königsbacher.

South Africa: Anheuser-Busch, the world's biggest brewer and producer of Budweiser, is to expand in South Africa beer market. It hopes to use its position as the official beer sponsor of the 2010 football world cup, to be held in South Africa, to bolster its position in the country, London's Sunday Telegraph revealed on October 3. Now Anheuser-Busch is negotiating with senior business figures in South Africa. If Anheuser-Busch succeeds in South Africa it will present a major threat to SABMiller, the second-biggest brewer, formed when South African Breweries bought America's Miller Brewing in 2002, the paper commented. SAB has a 97 % share of the beer market in South Afica and last year 27 per cent of its profits came from sales in the country. A SABMiller spokesman reflected the companies' rivalry, scoffing at Anheuser-Busch's world cup sponsorship. "A warm weekend in Soweto would have more impact on beer consumption," he said. “The two companies have been involved in a series of acrimonious disputes. In May, SABMiller, won a legal battle when a judge ordered Anheuser to stop saying in adverts that Miller lager is brewed by "South African Breweries", contrasting it with Anheuser-Busch's own American image,” Sunday Telegraph said. Anheuser-Busch is employing a similar tactic in China where it is the official beer sponsor of the 2008 Olympics in Beijing. Anheuser-Busch launched a fresh advertising campaign calling its Budweiser the "King of Beers" and dubbing Miller lager "the Queen of Carbs" in the US, where low-carbohydrate beers have been popular.

Russia: The Netherlands’ brewing force, Heineken NV, is extending in Siberia. The Dutch brewer announced on Friday, October 1, it has acquired 100% of Sobol Beer LLC in Novosibirsk, Western Siberia. The transaction will be funded from available cash resources, the company revealed. Heineken St Petersburg brewery is to reach its maximum capacity by 2005 growing by 15% per annum. That is why, the acquisition will provide for immediate additional production capacity for the national brands Bochkarev and Ohota, the company added on October 1. The parties did not mention the acquisition price. According to different financial analysts Sobol Beer worth US$50 million. However, some sources revealed that Heineken paid about US$70 million for the brewery. Negotiation between companies started in April this year. Some other companies like Sun Interbrew, Efes and Alfa-Eco were interested in purchasing Sobol Beer. Besides Bochkarev and Ohota Heineken plans also to keep brewing Sobol and Zhigulevskoye at Sobol Beer brewery. Heineken intends to invest about EUR 20 million in the plant and to reach a production capacity of 170 million litres of beer per annum. Now the brewer output about 20 million litres of beer. Heineken has already upped its presence in Russia, stating that it expects the Russian beer market as a whole to grow by a further seven per cent during 2004. In August this year, Heineken became the third biggest company in Russia’s beer market after acquiring WBD shareholders’ controlling stake in the Volga and Shikhan breweries making up the Central European Brewing Company (CEBCO). Heineken said by 2007 it plans to reach about 9.2% of the Russian beer market. "This acquisition fits perfectly with our growth strategy for Russia following our recent acquisition of the Shikhan and the Volga Breweries. It reinforces our number three position and further strengthens our distribution and sales platform in this fast growing beer market," Jean Francois van Boxmeer, member of the executive board of Heineken NV said.

Romania: SABMiller, the second largest brewer in the world, announced on 04 October 2004 a 12% volume growth of its sales on the Romanian market for the first eight months of this year compared to the similar period of the previous year. The results on the Romanian market are contrary to the market decrease and even exceed the growth recorded by the group in Europe. “Our European businesses generated good results and an organic growth of 3%. Besides the volume increases in Romania and Russia, the sales from the Polish and Czech markets grew in the second quarter of the year compared to the first three months, but the growth was partially neutralized by the situation from Italy and Hungary”, announced SABMiller. Octavian Buzoianu, the Corporate Affairs Manager of SABMiller Romania, says that the company’s sales were good and grew against the trend of the beer market. Ursus, Timisoreana, Aurora and Ciucas are the most important brands held by SABMiller in Romania. “Our sales went well although the weather was rather unfavorable and the market recorded a slight decrease. I think the growth is generated by the strength of our Romanian traditional brands”, claims Buzoianu. He estimates an overall growth of 15% for the year 2004. The rainy weather during summertime had a strong impact on the beer sales, especially that it is usually in May – August that are recorded 50% of a year’s sales. The estimations regarding the losses incurred by the players from the beer industry amounted to around 30 million dollars (600,000 hectoliters). The market had started the year in a rather good shape, with a 10-15% growth in the first months, and the large brewers were expecting sales even better than last year, when the market grew by 10%, reaching 12.8 million hectoliters for a value of around 550 million Euros. SABMiller holds five breweries in Timisoara, Buzau, Pitesti, Cluj and Brasov and a market share of 22%. The company has recently purchased Aurora Brasov for 20 million dollars, this transaction bringing SABMiller back on the second position on the Romanian beer market. Aurora Brasov has been one of last year’s best performers in the brewing industry, recording a sales growth of 26.8%, up to 664,000 hectoliters and a market share of 5.2%. After the takeover of Aurora Brasov, the beer company announced a reorganization program under which it will cut down the number of employees by 30%...more info

USA: Sales of Coors Light, Adolph Coors Co.'s most important beer brand, have dropped for the first time since it was launched more than 25 years ago, The Associated Press posted on October 4. Last year, Coors Light made up 8 percent of the U.S. beer market, down from 8.1 percent the year before. The loss amounts to more than 325,000 gallons and analysts say the decline will continue. "There has been a slight decline (in Coors Light)," said Laura Sankey, Coors' vice president for corporate communications. "I think it's gotten mischaracterized to feel like it's bigger, but you never want to lose share." Further loses could pose a problem for the company, based in Golden, because the Coors Light brand accounts for 75 percent of its U.S. beer volume. A reason for the decline may be Coors' decision in late 2001 to focus Coors Light marketing on twenty-something males. Analysts say the move may have alienated older drinkers instead of boosting sales. "They seem to believe that the advertising has got traction with consumers, but it doesn't appear that it is moving the needle," said Eric Shepard, executive editor of Beer Marketers Insights, an industry trade publication. Coors Light's newest campaign touts that the beer is shipped in temperature-controlled rail cars. "They're very product-focused ads, full of good facts about how we try to keep our beer as cold as possible," Sankey said. "I think they'll appeal to drinkers of all ages." Coors did post positive earnings in 2003. The company reporting $174.7 million in net income in 2003, up 8 percent over 2002. "They've saved some money and optimized productions, packaging. That's really helped them keep their head above water," said David Hartley, an analyst at First Associates in Toronto. "But you can't do it forever." Bud Light is the No. 1 selling beer in the country to date this year, followed by Budweiser, Miller Light and Coors Light, according to Beer Marketers Insights. "Coors Light was growing very steadily right up through the year 2000 that's when they hit the wall," Shepard said. But times have been tough for the entire American brewing industry. Adams Beverage Group said domestic beer sales declined by 0.3 percent last year. Coors Light has continued to sell well in Canada, where it is the top-selling light beer and ranks fourth overall in beer sales. Analysts say the proposed merger with Montreal brewer Molson Inc. could help Coors capitalize on their existing distribution partnership, which has led to big growth for Coors Light in Canada. "Having the Canadian business gives them a steady cash-flow stream, it allows them to milk that cash string to help build their portfolio of brands in the U.S. over time," Hartley said. "I think they realize they have to be more diversified."

Japan: Kirin Brewery Co., Japan's biggest brewery, may spend as much as 5 billion yen ($45 million) to double its production of beer in China to 1 billion liters a year, the Nihon Keizai newspaper reported. According to the same source, Japanese brewer is to increase its beer production from 500 million litres per annum to 1 billion litres. The increase is to be reached by the production capacity of its Zhuhai Kirin President Brewery Co in Guangdong Province or build another plant. The newspaper added that Kirin is considering purchasing one or two local breweries with a total annual production capacity of 200,000 kls.

Malt News

Thailand: Boon Rawd Breweries of Thailand have purchased 60,000 tonnes of EU malt, in bulk in container, at EUR 260 C+F. Beer Thai is in the market for 150,000 tonnes, experts revealed. It is expected that 90,000 tonnes will be purchased in Australia and 60,000 tonnes from the EU. As a consequence of the FTA between Thailand and Australia, which frees Australian malt of an import tax, the price difference between EU and Australian offers is almost EUR 30 per tonne.

Barley News

China: Barley acreage was 920,000 ha this year against 775,000 a year ago. The official crop estimate is 3.66 million tonnes versus 2.72 million tonnes last year. Private estimates, however, range from 2.5 to 3.8 million tonnes. For comparison, China’s total grain and soybean crop is 455 million tonnes. Barley is not a favoured crop in China. Production is centred in the double-cropping areas in a wide circle around Shanghai, in Gansu and Xinjiang. It is losing ground in the prime agricultural regions of the Northeast. The share of malting barley is particularly small this year, it dropped well below 1 million tonnes, because drought conditions during vegetation affected protein contents and screenings. Prices for domestic barley, which were (equivalent) EUR 100-120 last year, are now EUR 170-180, delivered malting plants. Chinese beer output in 2003 was 253.9 million hl. Forecasts for 2004 are 270 – 280 million hl, for 2005 308 million hl. In January-July 2004, however, the beer output was up by 16%. If sales continued at that pace, a total of 294.5 million hl would already be achieved by the end of 2004. As seen in the past, malt usage is heavily influenced by prices. Present malt input estimates run from 9 to 10.4 kilos per hl. Total barley need estimates range from 3,0 to 3,6 Mill. tons in 2004, and 400.000 tons more in 2005. In theory, this would result in a great increase of barley imports, (2.5 – 3.0 million tonnes), but in January/August imports were only 1.226 million tonnes, and realistic forecasts expect total imports of 2 million tonnes in the crop year 2004/05.

EU: From July 1 till September 28 the EU granted barley export licences for 112,000 tonnes. EU feed barley prices of US $ 130-135 FOB seaports are US $ 30 above Black Sea price levels. The reasons, according to experts are: no export restitution, a firm Euro, and EU markets have the backstop of intervention: EUR 101,31 = US $ 124,60 in October.

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 2005 are available on site www.e-malt.com/MarketPrices

Malting barley prices. French barley prices.

Nominal prices.

EURO = USD 1.2289 October 05, 2004
Crop year		2004		2005
Parity		FOB Creil		FOB Creil
Position		July 2004		July 2005
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	112.00	138.00	123.00	151.50
2RS	Prestige	111.00	136.50	122.00	150.00
2RS	Cellar	111.50	137.50	122.50	150.50
2RS	Aspen	110.50	136.00	121.50	149.50
2RS	Optic	110.50	136.00	121.50	149.50
2RS	Astoria	110.00	135.50	121.00	149.00
2RS	Cork	110.00	135.50	121.00	149.00
6RW	Esterel	100.00	123.00	106.00	130.50

nq - Not quoted Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

Table of the week

EU Malting Barley Supply and Demand Estimate 2004/2005 (in 1,000 tons) Malt production Barley demand  Supply Spring malting barley  Supply Winter Malting barley  Net Plus / Minus  Total Spring Winter   Northwest:    Belgium  660  825  15  -  - 810  - 560  - 250    France  1,380  1,620  2,450  2/6 row 1,800  2,630  1,450  1,180    Germany  2,050  2,560  2,100  2 row 100  - 360  - 300  - 60    Ireland  160  200  250  -  50  50  -    Netherlands  240  300  250  -  - 50  -   - 50    United Kingdom  1,520  1,900  1,300  2row 700  100  100  -    Total Northwest  6,010  7,405  6,365  2,600  1,560  740  820      Baltic:    Denmark  255  320  900  -  580  580  -    Finland  175  220  200  -  - 20  - 20  -    Lithuania  60  75  90  -  15  15  -    Poland  280  350  250  -  - 100  - 100  -    Sweden  250  315  315  -  -  -  -    Total Baltic  1,020  1,280  1,755  -  475  475  -      Southeast:    Austria  155  200  250  -  50  50  -    Czech Republic  500  625  800  -  175  175  -    Hungary  140  175  200  -  25  25  -    Slovakia  280  350  400  -  50  50  -    Total Southeast  1,075  1,350  1,650  -  300  300  -      Mediterranean:                  Greece 40 50 0   -50 -50     Italy 75 95 40   -55 -55     Portugal 75 95 0   -95 -95     Spain 400 500 600   100 100    Total Mediterranean  590  740  640  -  - 100  - 100  -      Net Total  8,695  10,775  10,410  2,600  2,235  1,415  820

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;
OCTOBERFEST Famous German Beer Festival;
Agro + Food + Drink + Tech Expo Georgia Food, Beverages and Processing Equipment Trade Fair;
bevex Beverage Trade Fair;
InterBev 2004;
YUGOSLAVIA INTERNATIONAL FAIR OF FOOD & BEVERAGES 2004;
BevExpo 2004;
Great American 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