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• Russia's Avangard bank is setting up a subsidiary, Avangard-Agro, that will be responsible for high-quality barley supplies to the bank-controlled malting plants ...more info



• Scottish Courage, the UK’s largest brewer, announced on January 22 2004 record distribution service levels and customer satisfaction ratings over the crucial Christmas trading period ...more info



• Russia: A lorry carrying 10 tonnes beer sank while crossing the river Irtysh near the Russian city Omsk. After three weeks was the beer rescued from the river, with help of Russian troops ...more info



• Colombia: Grupo Empresarial Bavaria, the Colombian brewer, officially began the building of a new brewery in the South-east of the country ...more info



• Germany: In one of Western Europe’s biggest beer markets, Germany, beer consumption fell once again in 2003, according to the German Brewers’ Association ...more info



• Russian beer company, Tinkoff, increased four times its turnover in 2003 versus 2002 up to US$ 33 million. In 2003 Tinkoff sold 90,782 hectoliters of bottled beer and 4,500 hectolitres ...more info



• Canadian brewer Molson Inc. has seen its share upgraded by the US-based investment analyst Raymond James. Analyst Raymond Lai upped his rating on Molson shares to "outperform" ...more info



• Sweden: Negotiations about structural changes in Sweden completed, Carlsberg A/S reported in a statement on January 22. In August 2003, Carlsberg Sverige (Sweden) initiated negotiations ...more info



• Philippine food and beverage conglomerate, San Miguel Corp., said on January 22 it has asked the government to stop its effort to impose a higher tax on its beer product ...more info



• UK: Cobra Beer has signed an exclusive agreement with the Virgin Atlantic airline, which will carry the first 330ml cans of Cobra on all its flights between London and Delhi ...more info



• Belgium Brussels – The price of a glass of beer in Belgium is set to rise by up to 7.5 cents, Flemish newspaper Het Laatste Niews reported on January 21 ...more info



• UK: Coors has launched a new light beer for the UK market, Datamonitor reported on January 13. Coors’ latest attempt to capitalize on consumers' growing healthy drinking needs ...more info



• Austrian beverage company Brau Union has announced it has increased its shareholding in Brauerei Schladming to 90%. It previously held a 33% share in the company ...more info

Brewery News

The Danish brewer Carlsberg Breweries AS said on January 21 that its shopping spree will not end with the recent bid for the German beer maker Holsten. The Danish daily newspaper Boersen quoted Carlsberg Breweries chief executive, Nils Smedegaard Andersen today saying: "It is clear that we are looking at new investments in Germany, and the purchase of Holsten creates a further incitement to grow.” "The purchase is also a signal that we see the German market as interesting longer term," he added. The brewer also said that it was continuing to look at Asia and the Baltic states for purchasing opportunities. Talking to reporters yesterday, Smedegaard Andersen said: "We want to expand into markets where we can grow, such as Germany, the Baltics and Asia. We're not currently in any talks in Germany, though. Buying Holsten will not stop these plans.” It is believed, from previous comments that Carlsberg has around 20 billion Danish crowns (US$3.36 billion) to spend on acquisitions. Yesterday, Denmark’s leading brewer launched a bid for Holsten, Germany’s second-largest brewer. The Danish brewer has entered into conditional agreements to acquire 51% of the share capital in Holsten at €38 per share from the Eisenbeiss family and other parties. Carlsberg Breweries will make a voluntary public offer at the same price to buy all outstanding shares. The offer price values the company at €523 million based on 13.75 million issued Holsten shares.

Peru: The Peruvian brewer, Union de Cervecerias Peruanas Backus & Johnston, has reported 3% increase in its beer sales in 2003 according to an interview by Dow Jones with institutional relations manager Fernando Hilbck from January 22. The company had absorbed an increase in tax and lowered prices to meet the sales growth, Backus general manager Carlos Bentin said earlier. "We cannot continue to sacrifice the consumers because of permanent tax increases," he told El Comercio. Bentin said that tax now makes up 65% of the sale price of a beer in Peru. Earlier this month, Bentin denied the rumours that Interbrew was considering buying Backus. He said the only thing he could confirm was that there had been no due diligence process.

The United Kingdom’s brewing force, SABMiller, will soon start producing its leading international beer brand Pilsner Urquell in Russia, reports in the Russian press revealed on January 20. According to the reports, Kaluga brewery, owned by SAMiller, the second world largest brewer, has already finished mounting equipment worth US$2m for new production lines. Kaluga brewery outputs other licensed beer brands like Staropramen, Miller, Holsten. However, SABMiller hasn’t revealed any time scales on when a launch might happen. The company also didn’t make public the volume of production planned and the amount of investment. Competitors said that SABMiller has chosen the right time to make the investment, as now the marked of licensed beer in Russia is growing much faster than the beer market as a whole. At present, Pilsner Urquell is imported from the Czech Republic. The brand holds 6% of all imported beer market and is number four after Bavaria, Budwiser Budvar and Staropramen. Now Pilsner Urquell is produced in the Czech Republic and Poland.

India: Two international beer giants are heading for the Indian market. After snapping ties with the UB Group, the Philippines-based San Miguel Corporation is re-entering the Indian beer market through an alliance with Anchor Beverages, Rediff’s report revealed on January 22. Anchor will also be marketing the Jenlain beer brand from the France-based Duieck stable. Budweiser, the US beer from Anheuser-Busch, is also looking at entering India. Confirming the development, PK Das, managing director of Anchor Beverages, said, "We have entered into a exclusive distribution and marketing tie-up for selling the San Miguel and Jenlain beer brands in the country." The company is also understood to be in talks to market Budweiser, but Anchor declined to confirm this till the deal was inked. The import and distribution arrangement with San Miguel and Jenlein is for a period of seven years. Under the open general licence, Anchor will be importing and selling these brands in India and they will be priced at Rs 35 for a 330 ml can and Rs 50 for a 500 ml can. San Miguel was earlier being sold in India by the Zinia Lawyer-controlled Associated Breweries as it had a exclusive manufacturing and marketing licence from the Philippine company. However, with liquor baron Vijay Mallya acquiring a majority stake along with management control of Associated Breweries, the contract for marketing San Miguel was not renewed. Leading global brands like Heineken, Oranjeboom, Corona have already entered India through distribution tie-ups. The Indian beer market is estimated to be over 6.7 million hectolitres and the beer market is growing by about 7 % annually. Currently the Indian beer sector is dominated by two players -- the UB -Scottish and Newcastle combine, and the SABMiller-Shaw Wallace combine. The other foreign player is Australia's Fosters. According to analysts, the entry of foreign brands is because of the attractive growth rates and margins in the Indian beer industry.

Malt News

Russia: Russky Solod (Russian Malt), a malt-producing company fully-owned by Russia's Avangard bank, has signed a US$ 7 million agreement with Germany's Buhler company to acquire equipment for its malting plant in Russia's Oryol Region, Zmievka village, Avangard bank said in a press release on January 21, according to Prime-Tass. The malting plant in Oryol started to be built in November 2003. Its production capacity is planned to be at around 100 thousand tonnes of malt per year. The plant will process 130 thousand tonnes of malting barley. Avangard bank is to provide financing for five years and German export agency Hermes operates as the guarantor. Avangard bank also financed the construction of the Oryol Region-based malting plant as well as of two other Russky Solod malting plants, which are located in the Moscow and Voronezh regions, where similar equipment has been installed. The malting plant in the Moscow Region is already in operation, while the plant in the Voronezh Region is to be launched in spring 2005. The total investments of Avangard in its the three malting plants overcome US$ 100 million. These plants are to cover 30% of malt needs in the Russian brewing industry. Russky Solod was created by Avangard bank two years ago. It was supposed to build three malting plants and to offer them to strategic investors like Soufflet or Cargill in the future. However, now Avangard has changed its plans and it is not going to give up its malting business but to develop it independently, Kirill Minovalov, the bank’s president, told Vedomosti newspaper in autumn. According to Minovalov, the company is going to invest about US$ 40 million in developing malting barley production. Three fourths of the funds will be directed to the acquisition of agricultural technique for barley growing. By 2007 the bank plans to decrease the cost of malt production by EUR 100 –110 per tonne. Under such conditions Avangard bank will be able to sell its malt not only on the Russian market, but also to export it, especially to China or Latin America.

Barley News

China has made its first purchase of Australian malting barley in twelve months, as the country continues to recover from the outbreak of SARS, ABC Online revealed on January 22. Australia's largest barley exporter, ABB Grain Limited says the country's demand for malting barley has returned as the Chinese head back to restaurants and resume beer drinking. But ABB Chairman Trevor Day says increased competition from Australian exporters could see prices drop for malting barley. "There is grain going out of Victoria as a deregulated market, and we know Glencorp with Brooks and others that are acting in that market, and of course we've seen a licence granted out of Western Australia for malting barley into China to Brooks, Glencorp and for another company that are also acting in that part, and I think there are some minor ones as well."

Ukraine: This marketing year (July 2003-June 2004) Ukraine has exported about one million tonnes of barley and corn and it will stop supplies on foreign contracts starting from January due to high inner prices. Vice-Premier Ivan Kyrylenko made a statement to sell barley and corn on the inner market is more profitable, as the prices are higher in Ukraine than abroad. As reported earlier, the Ukrainian Grain Association forecasted that the barley exports would make 1.2 million tonnes this marketing year. In November 2003 Ukraine exported 160,000 tonnes of barley - 19 % down from October. Average contract price in November dropped to $126.9 per tonne from $140 per tonne in October. As in the previous months the main volume in November went to Saudi Arabia - 129,000 tonnes, or 81.1 %. Hungary and UK bought 14,600 tonnes and 13,100 tonnes (these were the first supplies of Ukrainian barley to these countries in the 2003/04 MY). Totally over the first five months of the marketing year (July to November) Ukraine exported 874,000 tonnes of barley against 1.7 million tonnes over the corresponding period the year before. Import of barley to Ukraine in November constituted 6,100 tonnes against 4,800 tonnes in October. Nearly all the import (5,600 tonnes or 92 %) was represented by malting barley, supplied from Denmark. Over the first five months of the season the import constituted 19,300 tonnes, while over the whole 2002/03 MY the import had been 19,700 tonnes.


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 2004 are available on site www.e-malt.com/MarketPrices

Malting barley prices. French barley prices. Nominal prices.

EURO = USD 1.2713 January 23, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	142.50	181.50	137.00	174.50
2RS	Prestige/Cellar	142.00	180.50	136.00	173.00
2RS	Aspen	140.00	178.00	134.00	170.50
2RS	Optic	140.00	178.00	134.00	170.50
2RS	Astoria	140.00	178.00	133.00	169.50
2RS	Cork	139.00	177.00	133.00	169.50
6RW	Esterel	138.00	175.50	122.00	155.50

nq - Not quoted

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

Graph of the week

Source: ABARE

Agenda

January 2004: INTERNATIONAL FOOD & DRINK EXHIBITION (IFDE 2004); The 2004 Barley Day; VLB Symposium Information Technology; Pianeta Birra - Beverage & Co. International Show of Beers, Beverages...;
February 2004: Pianeta Birra - Beverage & Co. International Show of Beers, Beverages; Orges brassicoles 2004: Des perspectives nouvelles de marchés; HOFEX 2004 Food & Drink; Canadian Food & Beverage Show; BIEREXPO;
March 2004: International course - Malting and Brewing Science; FOODEX Japan 2004; ANTAD 2004; 2004 BIENNIAL CONVENTION; Beer Auction 2004, the international exhibition of beer, technology and equipment; China Drinktec 2004. China International Exhibition on Beverage and Brewing Processing Technology

More events are available on site e-malt.com

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