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• Norway: The beer price war between Ringnes and Hansa Borg Bryggerier breweries has a negative influence on Norwegian small breweries ...more info



• Beer sales on the Lithuanian beer market decreased by 7.7% in the first 11 month of the year, Lithuanian Brewers' Association has recently posted. There was sold about 221.65 million litres of beer ...more info



• Carlsberg Breweries intends to lower prices on its Blaagul beer brand in Sweden in an attempt to compete with discount beer Sofiero, Berlingske Tidende newspaper reported on December 8 ...more info



• The US brewer Adolph Coors Company (ACC) and its principal subsidiary, Coors Brewing Company (CBC), have announced the election of Randall Oliphant to their boards of directors ...more info



• UK’s regional brewer and pubs group Greene King Plc reported a 10 % rise in its half-year profits on December 9 and said trading since the start of its second-half had been encouraging ...more info



• Further to the listing of Australian Leisure and Hospitality (ALH) on the Australian Stock Exchange on 7 November, 2003, Foster’s Group Limited (Foster’s) confirmed ...more info



• Ukraine brewed about 14.98 million hl of beer in 2002, out of which 1.08 million hl was exported. In 1985 Ukrainian beer production registered 14.56 million hl of beer ...more info



• Norwegians celebrate Christmas with a mind-numbing range of yuletide beers as a tradition dating from Viking times. Vikings used to drink bitter ale as a tribute to the Norse gods ...more info



• Amalgamated Beverage Industries (ABI) Limited announced recently that Ms DLT Dondur, Financial Director of ABI Limited, has informed the Board of her intention to resign ...more info

2. Brewery News

Brazil: Schincariol is to invest 170 million reals (US$58.52 million) in the new plant in the municipality of Igrejinha, south Brazil. Around 250 direct and 2,500 indirect jobs will be created. Construction should be completed in 10 months, with production due to begin by the end of 2004. The new brewery will have an annual production capacity of 150 million litres of beer and 50 million litres of water, fruit juices and soft drinks. “Igrejinha has been chosen primarily for its geographical position,” Jose Domingos Francischinelli, the Schincariol’s financial and planning director said to the Portugese News Digest. Francischinelli added that another reason for choosing Igrejinha was the trade block of Chile and the countries of Mercosur, to which part of the plant’s production will be exported. The southern states of Rio Grande do Sul and Santa Catarina account for 9% of the country’s beer consumption.

Japan: Shipments of "happoshu" low-malt, beer-like beverages for general household consumption are expected to surpass those of beer in 2003 for the first time since happoshu was launched in 1994 in Japan, industry data showed on December 10, Kyodo News revealed. Such shipments of happoshu by Japan's five top brewers — Kirin Brewery Co, Asahi Breweries Ltd, Sapporo Holdings Ltd, Suntory Ltd and Orion Breweries Ltd — during the January-November 2003 period came to 176.93 million cases, compared with 156.57 million cases of beer shipped during the same period last year.

Bulgaria, Sofia: A two-member team from South African Breweries-Miller, one of the biggest breweries in the world with multinational operations, is exploring four Eastern Mediterranean countries in the first stage of deciding whether to enter their markets, according to Sofia Eco Com’s report from December 05. The four countries are Bulgaria, Greece, Cyprus and Lebanon. It is possible that Serbia-Montenegro may be added to the list. Philip Nieman, SAB head of exports and international marketing, and Charl Bassil, new market development manager, emphasized that their tour was a tentative, fact-finding mission. While SAB Miller has a European division, the two are looking at countries "not yet part of the SAB Miller family," Bassil said. Becoming part of the SAB Miller family so far has meant the brewer investing in beer production within a new country. The option being explored by Nieman and Bassil is entering the market by selling brands, which have already proved popular in South Africa and elsewhere. In this case, these are Castle beer, Redds beer, and Brutal Fruit, a fruit juice-based alcoholic drink launched recently in South Africa and that has proved a runaway success among younger adults. Interviewed in Sofia, Bassil said his first impressions were that the Bulgarian market was a tough one to enter, given the existing presence of Heineken, Interbrew, and Carlsberg - brewers that came to Bulgaria after the fall of communism 13 years ago - as well as solidly-established traditional Bulgarian brands. But, he said, it was possible that the youth market in the country would be looking for something new and exciting, and in this case Brutal Fruit would fit the bill. Nieman added, "there does seem to be an intense battlefield on the (Bulgarian) market"...more info

The Brau acquisition caused losses of EUR 20 million in Hungary and EUR 135 million in Austria, Brau minority shareholders reported in a statement on December 04. They said: “We would like to draw the attention of the international public to the Central European acquisitions of the Heineken Group and to the breaches of the legal regulations it committed in Hungary and Austria. It caused EUR 20 million losses to the Hungarian investors and nearly EUR 90 million losses to the shareholders of the Austrian parent company and further EUR 45 million losses to the Austrian budget. Heineken is also punishing its own shareholders in the long run, since its actions might lead to unforeseeable consequences on the degree of loosing market share.” “The indecent and arrogant acquisition attempt by Heineken has been for months in the middle of media attention in Hungary, because Heineken is also using unlawful means for the sake of acquiring Brau Hungary. Heineken is trying to acquire one of the most profitable breweries of Europe that holds 26% of the Hungarian market which can be soon regarded as a EU market. Heineken is trying to pay only a fraction of prevailing prices of similar European transactions, what’s more, at the same price Heineken is also trying to squeeze out those investors of Brau Hungary who would like to remain shareholders.” “Heineken is endangering the success of its Central European acquisition for only 1% of the EUR 1.9 billion paid for the BBAG group that equals to its 10 days of profit. Since then it became obvious that the unlawfully low purchase price means EUR 45-50 million tax savings in Austria, but with the total of EUR 65-70 million overall ‘gains’ on the deal, it is still only 3% of the expenses of the whole transaction so it does not justify taking such a risk.” “Causing the damage to the Hungarian investors lead to a boycott against Heineken and Amstel products in Hungary. This action has received sympathy support from the neighboring countries (Serbia, Rumania, and Austria). The shareholders of Heineken might also incur losses in the long run as a result of the fading reputation of the Heineken brand and the possible loss of market share, the magnitude and geographical reach of which can hardly be estimated,” Brau minority shareholders added.

3. Malt News

EU malt export licence bookings during November 2003 were only 63,000 tonns, bringing the total to 1.328 million tonnes. It is still assumed that losses in domestic markets and in the export business will lead to decline of sales of 300,000 - 400,000 tonnes for the crop year 2003/04.

(in tonnes)	2000 - 2001	2001 - 2002	2002 - 2003	July 1, 2003 - November 25, 2003
France	523,190	701,134	661,772	424,150
Germany	305,980	468,314	408,063	182,843
Belgium	277,584	296,368	287,850	198,777
U.K.	254,793	350,621	294,995	317,964
Finland	65,550	91,890	100,758	43,407
Denmark	52,326	96,812	94,791	38,210
Sweden	50,847	101,000	76,916	45,826
Netherlands	54,835	51,310	66,219	49,721
Ireland	26,003	35,145	31,140	11,900
Austria	4,850	8,840	8,620	4,932
Spain	3,000	2,400	5,640	10,000
Greece	1,800	1,744	1,306	200
Portugal	340	221	85	355
Italy	-	-	2	-
Total:	1,621,098	2,205,799	2,038,157	1,328,285

	Total Wheat malt, tonnes
Total 2000/2001	4,686
Total 2001/2002	12,805
Total 2002/2003	30,908
July 1/03 – November 25/03	3,322
	Total Roasted malt, tonnes
Total 2000/2001	23,967
Total 2001/2002	23,480
Total 2002/2003	23,603
July 1/03 – November 25/03	9,846

Russia: One of the world’s largest agricultural corporations, American company, Cargill, Incorporated, plans to invest about US$50 million in construction a new malting plant in Russia, local newspaper Vedomosti reported on December 10. The plant will be built in Efremov town, Tula region. Cargill’s business rivals consider that the Americans are too late with the project, Vedomosti said. According to provisional data Cargill’s sales volumes will reach US$ 59 billion this year. Cargill is one of the biggest traders of cereals, vegetable oils and other foodstuffs. Cargill is also one of the leading malt producers. The company invested in Russia more than US$ 150 million so far. According to Cargill’s spokeswoman, Irina Kalighina, new plant construction is planned to be started in spring 2004 and in the middle of 2005 the new plant will start producing malt. Kaligina said the investments will come to US$ 40- 50 million. Cargill intends to sell the malt produced at the new plant to Russian brewers. However Cargill hasn’t revealed the production capacity of the future plant. Meanwhile Russian analysts said that the production capacity of Cargills malting plant would be of 100,000 tonnes of malt per year. “That is a standard capacity for a similar object. Plants with such capacities are already explored by Soufflet in St. Petersburg and by Ochakovo in Lipetsk,” they said. According to Russian Beer Union, Russia use about 1.2 million tonnes of malt per year, in this connection 400,000 tonnes of malt is produced in the country and the rest is imported. However this relation will change soon. Baltika will launch its own malting plant with a capacity of 100,000 tonnes in summer 2004. At the same time, in summer 2004, Avangard bank plans to launch its second malting plant in Central Russia. By January 2005 Avangard is to launch its third malting plant in Orlovsk Region. The total production capacities of Avangard’s malting plants will come to 300 thousand tonnes per year that will cover about 30% of the Russian brewers needs in malt. When all planned malting capacities will start working the malt needs of brewing industry will be covered two-thirds, experts said. They also said that in two years the malt prices in Russia will decrease by 1.5 times and will give Russian brewing industry a new impulse.

4. Barley News

Australia: The world's largest exporters of malting-grade barley for the brewing industry and barley marketer, ABB Grain, managed to avoid the worst effects of the drought, comfortably beating early earnings forecasts and even eclipsing its 2002 result, according to local media SMH.The addition of the Jossco grain trading business and the sale of an investment helped lift earnings 4.2 % to $15 million. Directors demonstrated some confidence in the immediate outlook by lifting the final dividend from 10.1c to 13.5c a share, raising total distribution for the year to September 30 from 17.1c to 20.5c a share, fully franked. "The drought conditions experienced had an impact on ABB's business and, in turn, our financial results, with grain deliveries down significantly for the 2002-03 season," chairman Trevor Day said. The fall in deliveries - the value of grain delivered into the company's pools plunged from $621 million to $346 million - resulted in a reduction of grower use of ABB's financial products, he said. ABB is one of the world's largest exporters of malting-grade barley for the brewing industry and is also a big player in domestic and international feed-grain markets. Factors offsetting the decline in volumes included the opportunity to sell grain into the eastern states, where there was also a shortage of grain, Mr Day said. The acquisition of Jossco also unexpectedly boosted earnings, he said. The results show Jossco produced a profit of $1.45 million. "This [acquisition] has brought great value to ABB, both financially and in terms of diversification," Mr Day said. He said the outlook for the current crop, now being harvested, was positive. "The crop size for 2003-04 is expected to be of similar size to that of 2001-02."

The EU grain crop was 25 million tonnes lower than last year, the total European grain crop 75 million tonnes below the figure of 2002, caused by crop failures of wheat and maize, not so much by barley. Supplies of wheat and feed grains are very tight, malting barley stocks were abundant, but are shrinking constantly due to sales of quality barley to feed compounders, experts said. In the EU the bad supply situation is aggravated by restrictive import rules. In Poland, Ukraine and most Balkan countries governments have introduced tax-free quotas and have thereby facilitated cheaper access to their markets for imported grains. In the EU it is said that millers and feed compounders are short from January onwards, and that a new purchase wave of all grains will push markets up in January. After accession of 10 new member countries on the 1st of May of 2004 it is expected that some new members, e.g. Poland, will need to buy substantial quantities of grains from the old EU. Real relief will only come from the crop of 2004. Winter grain plantings are in good shape in Western Europe, less so in the East.