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• Germany's Holsten Brauerei AG abandoned its search for a buyer on December 11 as industry sources said the asking price had been too high, sending shares in the brewer sliding 22 % ...more info



• Greene King has seen its rating raised by two brokers, following the release of its half-year figures. The brewer and pubs group owner reported on December 9 an increase of 10% in pre-tax profits ...more info



• Tanzania: Serengeti Breweries and InterBrew of Belgium launched the local production of Stella Artois beer brand on December 8 ...more info



• Korea: Beer in PET bottles has become very popular in Korea just one month after its introduction, according to Oriental Brewery Company ...more info



• Russia: Bonds of PIT Investment LLC will be included into the list of non-listed securities and permitted to be sold in the Moscow Interbank Currency Exchange ...more info



• Russia: The turnover of the Tinkoff Brewing Company in 2003 can grow by 60% from $ 25 million in 2002 - to $40 million in 2003 ...more info



• Japan: In November alone, shipments of happoshu, the low-malt beer-like beverage, stood at 14.78 million cases, up 5 % from a year earlier and marking a first rise in two months ...more info

2. Brewery News

Germany’s third-largest brewer, Radeberger Group AG, bought a 50 % stake in Stuttgart Hofbraeu Brau, media reported on December 10. Hofbraeu, which employs 265 people, said the deal was worth about 60 million euros (73 million dollars). "For the future, the contract provides Radeberger the opportunity to take a larger stake via fixed put and call options," Stuttgarter Hofbraeu said. The two brewers said that along with organic growth, they will also look to make further acquisitions in the region of Baden-Wuerttemberg. Radeberger said on December 9 that it wanted “The Radeberger Group AG wants to play a continuing role in the consolidation of the German beer market.” Radeberger chief Ulrich Kallmeyer said he aimed to play an active role among future merger and acquisitions in the sector. Prior to the Haufbraeu buy, Radeberger had a war-chest of 170 million euros available for that purpose, according to the company. The German brewing sector, long kept fragmented by families with controlling stakes while protected by strict regulations, is coming under stiff competition from foreign companies, sparking consolidation in the industry. After Dutch brewer Heineken formed a joint venture in 2001 with Bavarian firm Paulaner und Kulmbacher, Belgian group Interbrew became the market leader in September by taking control of Spaten, another Bavarian brewer. Danish group Carlsberg and German firm Bitburg are reportedly readying to buy Holsten, which had been the market leader and has said it is open to a foreign partnership...more info

Small Czech brewers will target the large Polish market next year to take advantage of the fact that it will be truly open to them for the first time in more than a decade, Prague Business Journal reported on December 8. Individual brewers and the Czech Association of Small Independent Breweries (CSMNP) have already drawn up plans to penetrate Poland once the country drops existing prohibitive import barriers for Czech beer. The Polish government currently only allows 60,000 hectoliters of Czech beer to be imported a year free of customs duty. Above that limit a duty of 21 percent of the imported price of the beer is levied. Jan Vesely, the head of the Czech Association of Breweries and Malt Houses (CSPAS) and president of the European Brewing Convention, said the duty, imposed in 1992, increased the price of Czech beer so much that it couldn't compete on the Polish market. Czech brewers exported 2 million hectoliters of beer in 2002, 145,000 hectoliters of them to Poland, or about 7 percent of total exports. Poland currently ranks as the No. 6 export market for Czech beer behind Germany, Slovakia, England, the U.S. and Russia. No obstacles should prevent free trade in beer and the Polish market will open up for Czech brewers once both countries join the European Union (EU) in May, Vesely added. The Polish market is especially attractive for Czech brewers because it's close and exporting is fairly easy. "Beer is gradually pushing out spirits [in Poland], following the fashion in Western Europe," Vesely added. The CSMNP is already preparing an awareness and marketing campaign in Poland, and by next April, beer drinkers in several Polish towns should be getting what could be their first taste of the wares of small Czech independent brewers, said Jiri Fusek, the head of the CSMNP and president of European Association of Small Independent Breweries (EASIB). The association was created in August to promote the interests of small breweries in an enlarged Europe...more info

Scottish & Newcastle, the world's sixth-largest brewer, will pay 36 million pounds for a fifth of China's number three brewer, the latest foreign brewer hoping to profit from growth in the world's top beer market, Reuters said. Scottish & Newcastle confirmed on December 12 that it is in discussions with Chongqing Breweries (CBG) in China. S&N has had a strong commercial association with Chongqing for ten years, and it is seeking to deepen this relationship and strengthen further the CBG business, the company said in a statement. “These discussions consist of several elements, including the possible injection of new assets and S&N making a minority equity investment in CBG. Negotiations are still ongoing and no definitive agreement has been concluded. S&N will update the market as and when it is appropriate.” S&N, supplier of Newcastle Brown Ale and Kronenbourg, might be paying a high price for a rare foray into Asia for the mainly Europe-focused company, analysts said on Friday. Britain's largest brewer is forking out more than 525 million yuan (36 million pounds), 10.50 yuan a share, for 19.51 percent of Chongqing Brewery. This is more than four times the local company's net asset value, according to Reuters Securities 3000. "We're not surprised by the deal, but the price paid is too high. Going by previous transactions, the industry average should be about 1.5 times," Merrill Lynch's Grace Mak said. Chongqing Brewery's Shanghai-listed yuan-denominated A shares -- open to Chinese and select foreign investors -- rose almost its 10 percent daily limit to 15.55 yuan earlier in the day before profit-taking forced it down to close at 14.12 yuan at noon. China, a nascent annual market of 237 million hectolitres that's growing 6% a year, has long been walled off to foreign brands mostly unheard-of outside the major cities, and where a 640-ml bottle can go for just above one yuan...more info

Mexican food firm Herdez said on December 10 it signed an exclusive agreement with the Mexican unit of Heineken to distribute the Dutch group's beer in Mexico from next year. Under the agreement, Herdez and Heineken will strive to grab market share from Mexican brewers Modelo and Femsa, which dominate the local beer market. Imports currently amount to only a trickle of domestic beer sales. Herdez, which makes sauces, spices and canned vegetables and chilies in its 10 production plants, has eight distribution centers in Mexico.

3. Malt News

Overcapacity in the European malting industry is growing at an enormous speed, industry related analysts reported. In the Netherlands a new factory of 130,000 minus a closure of 30,000 tonnes will add 100,000 tonnes. In Belgium a new tower of 100,000 tonnes minus a closure will give at least 40-50,000 tonnes more production. There will be net additions of 70,000 tonnes in France and 100,000 tonnes in Sweden. Lithuania's new plant of 60,000 tonnes will be lead to the closure of the old 12,000 tonnes factory. Reports on Russia are that 200,000 tonnes went on stream in recent weeks. Further 200,000 tonnes will become operational by spring of 2004, expansion programs and new constructions are announced for 300,000 tonnes operational in 2005, and at least three more factories are talked about. In the extreme case it could lead to an overcapacity inside Russia and a very serious barley short, respectively the need to cultivate much more high quality malting barley within a few year's time. Altogether there are a few hundred thousand tonnes of malting overcapacity in Europe, but new or expanding markets for malt are not in sight. Therefore the closure of large capacities in the coming years seems unavoidable.

4. Barley News

Canada: Malting barley production may be a missed opportunity for many farmers, says an Alberta cereal specialist, The Western Porducer posted on December 11. "If you grow human peas, look at malt," Bill Chapman of Alberta Agriculture told a feed and forage conference. "If there is 50 percent acceptance of malt in your area, you should be taking a look at it very seriously." Budweiser brewed by Anhauser Busch is the top selling beer in North America, capturing 52 % of the market. The brewer buys exclusively six row barley. Last year all the Canadian six-row barley was sold to the American company at a premium of $1.60 per bushel. Gross returns per acre are good, but specific conditions are necessary to grow it. Pure lots of an acceptable variety are required. It must be insect free and fully mature. It needs to be free of desiccants. Japanese customers test barley lots for 29 different pesticide residues and reject contaminated samples. Malting barley must be seeded into warm soil at a rate of about 25-28 plants per sq. foot. It is preferable to straight cut at harvest time. Check the combine to reduce kernel peeling. This was a problem last fall when the weather was hot during harvest. Consider planting malting barley on a clean field where herbicide-resistant canola was grown the year before. A problem with many barley samples is the presence of too many contaminants, said Chapman. Harrington is the established variety and its quality gained Canada's entry on the world malt market. However, improved varieties have been released like Metcalfe, the two-row variety bought by Molsons Brewery. There are also good opportunities for those growing feed barley exclusively...more info

Australia: CSIRO Plant Industry has developed a simple high-throughput testing system that accurately identifies wheat and barley varieties, Innovations-Report announced on December 12. "Accurate identification of wheat and barley varieties provides assurance of quality for products that require different grain characteristics, like bread, noodles and beer," says Dr Kevin Gale, CSIRO Plant Industry. "This is vital in maintaining Australia’s export reputation in product standards." The variety ID system tests leaf or grain samples using a panel of DNA markers. Each marker gives a ’yes’ or ’no’ result. The pattern of results generates an individual ’bar code’ for each variety. Designed to be simple and very accurate, even for very closely related varieties, the system can easily process hundreds of samples in a day, outperforming previous tests in accuracy and throughput. "The test will allow the grains industry to confidently supply markets like Japan that require malting barley shipments to be essentially pure with respect to a specified variety," says Dr Gale. "Variety testing also helps ensure end-point royalties are paid on improved new varieties, giving breeders the resources to keep producing better varieties of wheat and barley for farmers and consumers into the future." The wheat and barley ID systems have been developed with Graingene (a joint venture between CSIRO Plant Industry, the Grains Research and Development Corporation, AWB Ltd and Syngenta) and ABB Grain Ltd.