Base Currency: Euro, EUR on 20-October-2004 1 EUR = 1.2524 USD 1 EUR = 0.6942 GBP 1 EUR = 1.5745 CAD 1 EUR = 1.7211 AUD 1 EUR = 135.81 JPY 1 EUR = 3.6057 BRL 1 EUR = 36.4699 RUB	Base Currency: US Dollar on 20-October-2004 1 USD = 0.7988 EUR 1 USD = 0.5543 GBP 1 USD = 1.2572 CAD 1 USD = 1.3742 AUD 1 USD = 108.47 JPY 1 USD = 2.879 BRL 1 USD = 29.12 RUB
EUR/USD Chart

Sweden: Carlsberg A/S announced on 19 October 2004 that Carlsberg Sweden AB has entered into an agreement to sell its brewery property in Bromma to the Stockholm Municipality for SEK 375 million. The transfer of the prop-erty will take place on 31 December 2004. Furthermore, Carlsberg Sweden has arranged to rent offices and warehouses at Bromma from the Municipality for functions such as sales, marketing, and logistics. Through this sale, Carlsberg A/S will realize an accounting profit which will be in-cluded in ‘special items’ in the Q4 financial statement. The profit is as expected and included in the previously stated expectations for 2004. In November 2003, the Board of Directors of Carlsberg Sweden decided to transfer the production of beer and soft drinks from the Bromma brewery near Stockholm to Falkenberg and to a lesser degree to Copenhagen. The transfer of the production has gradually been taking place and the process is expected to be completed during October 2004.

China: Anheuser-Busch Inc may pay up to US$ 1 billion for a stake in central China's Henan Jinxing Beer Group Corp, an official at the Chinese brewery told AFX - Asia on October 19. While the big US beer producer denied that any discussions are under way, an official at the Chinese firm said that talks have been held, though no final accord is on the table. 'Anheuser-Busch has initially agreed to pay up to one bln usd for some of our assets,' the Jinxing official told XFN-Asia. 'Bringing Anheuser-Busch in as a foreign strategic investor comes in line with our overall plan to diversify our state-owned shareholding structure,' he said. The official, who asked not to be named, also declined to say how big a stake Anheuser-Busch might take in the Chinese firm for that price. The US brewer, which has a 99.4 % stake in Harbin Brewery, and 9.91 pct of China's top beermaker, Tsingtao Brewery Co Ltd, issued a statement on October 19 denying contacts with Jinxing Beer. 'Anheuser-Busch is not in discussions with representatives from Jinxing,' Steve Burrows, company CEO and president, said in a statement. Anheuser-Busch earlier this year aggressively outbid SABMiller in a takeover battle for China's fourth largest beermaker, Harbin Brewery Group. Jinxing Beer is the top brewer in Henan province with around 10 affiliates in other parts of the country. According to its website the company owns 25 beer production lines, with an annual capacity of 1 million tonnes. Should it go ahead, a deal between Anheuser-Busch and Henan Jinxing would mark another successful bid by a foreign brewer to buy into one of the world's fastest growing beer markets, where annual per capita consumption currently stands at only 19 litres, compared with 75 litres in Europe and 84 in the US. At the same time, income levels in China are rising rapidly and consumers are acquiring a growing taste for beer. Driven by huge growth potential and sluggish beer demand in their home countries, many foreign brewers have entered China by acquiring local brands. Global beer maker Interbrew has spent more than US$ 600 million so far in China, and now owns 9 % of the mainland beer market. Other foreign brewers holding stakes in Chinese breweries include SABMiller Plc, Carlsberg International AS and Scottish & Newcastle Plc.

Belgium: The beer industry is growing at between 1% and 2% a year, but Brock, chief executive of InBev, the world’s biggest brewer by volume, has told his executives he wants to grow InBev at 4% to 5%. To achieve this he is putting in place a bonus plan for the top 300 executives that will reward outstanding performance. A large part of that success will involve tapping into the beer markets of Russia and China. InBev has a presence in both countries but it wants to become the dominant player. The highly fragmented German beer market, where the group is already the number two brewer with an 11% market share, is also on Brock’s radar screen. He said InBev has between €3 billion and €4 billion available to fund acquisitions without damaging its investment-grade debt rating. In addition to the costs coming out of the old Interbrew, a further €240m of annual savings will come out of InBev. These will be a combination of cuts and cross-licensing deals. Some of the savings will come from brewery closures. Inbev has already announced the closure of the Strangeways brewery in Manchester — where Boddingtons is brewed — next February. It intends to brew non-cask Boddingtons at Preston, south Wales and Glasgow, and cask Boddies at the Hyde’s brewery in Moss Side. Another UK site is also being closed as well as one in Canada. These are tough decisions, but Brock said they had to be made and more will follow. “There are obviously difficult, painful decisions to make, but that is the kind of thing we need to do. In total we have 75 breweries, which frankly is more than we need,” Brock said. In volume terms — but not in terms of profitability — the enlarged company InBev has taken the top spot from America’s Anheuser Busch. To the millions of consumers who drink Inbev’s brands, its beers are much better known than the company. Its 200-strong brand portfolio includes its flagship Beck’s and Stella Artois, which according to Brock is taking off like wildfire in America. Other brands include Bass, Leffe and Hoegaarden as well as Ambev’s Brahma beer, which InBev wants to turn into an international brand, a feat most analysts describe as challenging...more info

Russia, Moscow: Russia's leading brewery, Baltika, jointly owned by Denmark's Carlsberg and Scottish&Newcastle, on Saturday, October 16 shipped its first batch of 17,200 litres of beer to New Zealand. The second shipment with Baltika Number 3 Classic and Baltika Number 7 Export brands will be shipped by Christmas. The official distributor of Baltika, Federal Geo Ltd, intends to sell Russia’s most popular beer not only in New Zealand but also in Vanuatu, Fiji, Tonga, Samoa and Cook Islands. Now Baltika’s brands are sold in 35 countries. Last year it exported 992,300 hectolitres of beer, or 6 percent of overall sales. That was a 9% increase versus the same period 2002.

UK: Scottish & Newcastle, which makes Fosters and Kronenbourg lagers, will next month become the first major brewer in the world to put general health warnings on beer bottles. The initiative in Britain will go beyond current government policy aimed at combating binge drinking, and will be similar to health warnings on cigarette packets, The Telegraph revealed on October 17. Scottish & Newcastle's lead is expected to be followed by other brewers and become standard practice in the UK within months. The company's warnings will be headed "UK Alcohol Units" and contain a message saying: "Responsible drinkers don't exceed three to four units a day for men, two to three for women." The warnings will be prominent, and also say how many units of alcohol the can or bottle contains, typically about two units for a can of lager. Scottish & Newcastle will initially place the warnings on bottles and cans of Newcastle Brown Ale, then extend them to its other brands, which also include John Smith's bitter. Scottish & Newcastle denied that it was introducing the warnings as a way of avoiding potential lawsuits that could blame drinks companies for health problems. "We are doing it because we are a responsible company," said a spokesman. A spokesman denied they were warnings, however. "It's not a health warning, it's a responsibility message," he said. "If you drink moderately it's compatible with a healthy lifestyle, whereas if you drink too much we all know it can do you a lot of harm." Coors, which brews Carling and Grolsch lagers in the UK, will introduce a similar policy in 2005, and other brewers are expected to follow suit. Coors said it would first introduce a message saying "Enjoy Carling, Take it Easy", but it is also understood to be planning more comprehensive health messages. In the US, specific warnings about the risks of alcohol for drivers and pregnant women are a legal requirement, although beer packaging does not carry general health warnings of the sort to be introduced in the UK. Although these initiatives by brewers follow calls from the Government for them to help combat binge drinking, they may not avert the imposition of more specific health warnings. Tony Blair said last month that proposals to impose labels to deter pregnant women from drinking would be incorporated in a government white paper ahead of future legislation.

Malt News

EU malt export licence bookings were 629,000 tonnes from July 1 to September 28, 2004, of which 545,000 tonnes in the old and 84,000 tonnes in the new member states, industry experts has recently revealed. At the same pace bookings in the old EU would reach 2.2 million tonnes for the year, and 2.5 million tonnes in the total EU. In the first half of the year EU malt exports were better than expected to Africa, Russia, Thailand and particularly Venezuela. For October Brazil may become a better customer again, as the country forecasts a 5% better beer output, and Mercosur maltsters appear extremely well sold.

Vietnam has agreed with the EU to apply an average import tariff of 24% for agricultural produce if it joins the WTO. For malt, the 10% bound rate (and 5% effective rate) remains in the agreement. The European Commission has concluded a bilateral trade talks with Vietnam on October 9 as a prelude to the country's membership of the WTO. The deal concluded covers the commitments that Vietnam will undertake in goods and services once it accedes to the WTO. Vietnam must now finalise bilateral deals with all of its major trading partners before the terms of its accession can be confirmed. The signing of this agreement is a major step in the process of Vietnams' WTO membership as the EU is Vietnam's largest trading partner (imported €6.4 bn of goods in 2003, of which farm products made up 10%).Vietnam is currently conducting negotiations with the US, Japan, China, Canada, and Australia among others. As part of the WTO accession process, Vietnam is negotiating bilateral market access deals with all interested WTO members. Once these bilateral negotiations have been concluded and the Working Party has completed its work on Vietnam’s trade regime, the Working Party will determine the terms of accession. These will appear in a report with a protocol of accession containing the specific market access commitments (in tariff and services schedules) of Vietnam.

Ukraine: In August 2004 Ukrainian enterprises imported about 8 thousand tonnes of malt at a value of US$ 1.08 million. August’s volumes of imported malt increased with 1.4 thousand tonnes versus July volumes, Proagro revealed in a statement. According to the same source, in July 2004 Ukraine imported about 6.6 thousand tonnes of brewing malt at a value of US$1.21 million. As usual the volumes of brewing production are growing during summer that leads to a rise of malt consumption. Because of an insufficient malt offer on the internal market of Ukraine, national brewers are to import more raw material. Besides the quality of Ukrainian malt doesn’t always suit the brewers’ requirements, market analysts said.

Barley News

Canada: For 2004-2005 barley production in Canada is estimated by AAFC (Agriculture and Agri-Food Canada) to increase by 6% due to higher yields, despite lower seeded area. Supplies are expected to rise by 10% due to higher carry-in stocks, AAFC revealed on October 8. Feed use is projected to increase significantly, due to higher supplies in western Canada and increased shipments to eastern Canada. Exports of malting barley are expected to drop significantly as lower crop quality reduces the selection rates, although import demand from China is projected to rise sharply. Exports of feed barley, for the crop year, are expected to increase significantly from 2003-04 due to increased supplies and low prices. Carry-out stocks are forecast to increase sharply. Off-Board feed barley prices are expected to decrease by about $25/t from 2003-04 to $110/t, due to increased domestic supplies and lower US corn prices. The CWB September PRO for No.1 CW Feed Barley for the first pool period (August-January) is $113/t I/S VC/SL, versus $167/t for 2003-04. The PRO for Special Select Two Row designated barley is expected to decrease to $186/t from $200/t for 2003-04, mainly due to higher supplies expected in Europe and Australia.

Finland: The new estimate of Finnish 2004 crop is 220,000 tonnes of screened malting barley, about 50,000 tonnes more than in 2003, Viking Malt has recently written in a press release. Viking Malt’s early forecast for the Finnish 2004 crop showed an increase in the area used for malting barley cultivation to around 145,000 ha (about 6,000 ha increase) and also an increased crop compared to last year. The first indications after harvest show the same pattern. In Finland the harvest began later than normal and was not completed until beginning of September. Major varieties are Scarlett, Saana and Barke. The demand of Finland in malting barley is about 240,000 tonnes in 2004, no changes compared to 2003.

Australia: ABB Grain Ltd announced that South Australia’s 2004/05 harvest began today, October 19 2004, with the first load of barley delivered to ABB Grain Ltd’s Port Pirie receival centre in the State’s Mid North. The company said: “The honour of delivering the first load in South Australia went to Mr Ian Mudge of Telowie, who delivered just over 27 tonnes of feed barley to the silo this morning. Mr Mudge is no stranger to being the ‘first cab off the rank’ at harvest time – the previous two years also saw him delivering the first of the state’s tonnes for the season, in 2002 of feed barley and 2003 of lupins.” With crops of wheat and lupins also to be harvested for the 2004/05 season, Mr Mudge said he usually started with barley but should be into the other commodities within the next fortnight, with wheat not that far away from being ready. Mr Mudge said his crops were looking as though yields would be average to above average. He said despite last Tuesday’s scorching weather, he had not experienced much crop damage, the hot day “just quickening it up a bit.” ABB Grain Corporate Relations manager Mr Ian Desborough said the company was expecting South Australian grain receivals to be in line with the five year average of 6.5 million tonnes or just below that level. “We had thought earlier that we might go just above, but last week’s hot weather has taken a little of the gloss off the estimate, as crops in early maturing areas such as the upper North and Eyre Peninsula suffered in the heat.” “However it is still very early days yet and if the cool weather continues or we get another inch to half an inch of rain the yields could still go up in the later maturing areas south of Adelaide,” he said.

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 1.2524 October 20, 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	140.50	123.00	154.50
2RS	Prestige	111.00	139.50	122.00	153.00
2RS	Cellar	111.50	140.00	122.50	153.50
2RS	Aspen	110.50	138.50	121.50	152.50
2RS	Optic	110.50	138.50	121.50	152.50
2RS	Astoria	110.00	138.00	121.00	151.50
2RS	Cork	110.00	138.00	121.00	151.50
6RW	Esterel	100.00	125.50	106.00	133.00

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 - September 28, 2004   France   523,190  701,134  661,772  774,761  165,340   Germany   305,980  468,314  408,063  422,047  85,415   Belgium   277,584  296,368  287,850  317,292  56,804   U.K.    254,793  350,621  294,995  443,501  117,948   Finland   65,550  91,890  100,758  114,165  18,520   Denmark    52,326  96,812  94,791  90,452  22,120   Sweden   50,847  101,000  76,916  78,369  27,190   Netherlands   54,835  51,310  66,219  80,703  12,079   Ireland   26,003  35,145  31,140  38,900  37,404   Austria   4,850  8,840  8,620  60,211  2,541   Spain   3,000  2,400  5,640  10,000  -   Greece   1,800  1,744  1,306  979  130   Portugal   340  221  85  695  170   Italy   -  -  2  -  -   Total old EU   1,621,098  2,205,799  2,038,157  2,432,075  545,661   New EU members  May-June, 04     Czech Republic         34,340  24,124   Poland         7,604  6,913   Hungary         2,830  20,523   Slovakia         1,000  31,770   Total EU    1,621,098  2,205,799  2,038,157  2,477,849  628,991    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 – September 28/2004    1,399        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 – September 28/2004    8,501

Graph of the week

Agenda

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;

November 2004:
INTERNATIONAL EXH FOR FOOD & DRINK INDUSTRY / WORLD FOOD UKRAINE 2004;
INT'L EXH OF WINES, ALCOHOLIC & NON ALCOHOLIC DRINKS & PROTECTION EQUIPMENT / EXPO DRINK 2004. Romania;
TALLINN FOODFEST 2004;
Belgian Beer Fest, Boston MA;
Teach a Friend to Brew Day;
FOOD PROCESSING MACHINERY EXPO 2004;
FISPAL RECIFE 2004 / INTERNATIONAL FOOD FAIR. Brazil.;
BRAU Beviale 2004. Nürnberg, Germany.;
Brewers' Association of America Conference;
Accrington Beer Festival. UK;
FOODAPEST 2004. 7th International Food, Drink and Food Processing Trade Fair;
INTERNATIONAL EXH FOR FOOD INGREDIENTS, ADDITIVES & FLAVOURINGS / INGREDIENTS RUSSIA 2004;

More events are available on site e-malt.com