The global beer market expanded in 2005 by about 2.4% to 1.55 billion hectolitres, up from 1.52 billion hectolitres in 2004, Rabobank commented in one of its latest reports.

Total world beer consumption in 2007 will reach around 1.61 billion hectolitres, growing by an average of 2% per year, according to Canadean.

The main growth areas in the world in 2005 were Asia and Central & South America. In Asia, China is the largest and fastest-growing market and Brazil is the largest market in Central & South America.

Total beer consumption declined in North America, in Western Europe and in Australia and New Zealand. In the U.S. and Canada the decline has been due to the growing popularity of spirits and wine, especially in the on-trade. In Western Europe the ageing population is drinking less beer and looking for healthier alternatives like wine and mineral water.

The vice-president of the Shanghai management company of Anheuser-Busch (AB), Wang Dao said that the flagship Budweiser would first come into medium-class beer market, China Business Daily News posted on September 21.

Budweiser directly cuts in high-end market to build its own brand, while the company also hopes to enter mainstream beer market by purchase or alliance, Wang Dao introduced.

In 2004, AB successfully acquired the Chinese fourth largest beer manufacturer, Harbin Brewery Group. Besides, AB has purchased 27% stock of Tsingtao Brewery Group, the largest beer manufacturer in China.

At present, Budweiser has taken 50% shares of the Chinese high-end market. However, in spite of the rich profits, the high-end market share only takes 10% to 15% of the total amount of beer. China is the largest beer consumption market, with medium-class market space four times the high-end market, Wang Dao said.

Shanghai is still the key market for Budweiser, with sales volume of 800,000 tonnes in 2005, Wang Dao revealed.

The Weissheimer insolvency is still pending. In Hungary Boortmalt is the new owner of the Alba Domu factory in Dunavjaros, while Inbev executed their priority rights in Böcs and will maintain and operate again their former malthouse, experts commented.

In August one more international brewing group entered the market for malt, so did breweries in Brazil, Thailand, Japan. Polar of Venezuela announced their purchase intentions, to be negotiated in September. A number of brewers are still waiting, including two of the world's largest.

Some EU maltsters claim to be sold out for 2007, others abstain from offering due to a lack of barley cover. It will be a difficult year for both maltsters and brewers.

In North America overcapacity in malting industry had led to deteriorating malting margins like in Europe.

IMC closed their Chicago factories, and several other factories in the U.S. and Canada were working below capacity. The summer demand, partly replacements of missing EU deliveries, changed the situation, North American maltsters can operate again with full capacities and at profitable malting margins.

Two new factories in Argentina do not appear to cut much into the selling chances of European and North American maltsters, as the beer output is booming in most countries of Latin America.

For 2006-07 barley supply in Canada decreased by 15% due to an 18% decrease in production related to lower area and yields. Barley exports are forecast by Agriculture and Agri-Food Canada (AAFC) to decrease by 28%, as lower feed barley exports are only partially offset by higher exports of malting barley, according to Grains and Oilseeds Outlook posted on September 20. Despite lower exports and domestic feed use, carry-out stocks are forecast to fall significantly.

The average off-Board feed barley price (No.1 CW, in-store Lethbridge) is forecast to increase by C$10/t from 2005-06. The CWB PRO for No. 1 CW feed barley for Pool A in 2006-07 is C$129/t, vs. C$127/t for Pool B in 2005- 06. The CWB PRO for SS2R malting barley is C$179/t vs. C$171/t for 2005-06, due to lower expected exportable supply in Australia and strong US import demand.

How can sufficient supplies for the EU maltsters be secured? And how can the market of malting barley be stabilized so that the exportable quantities of France, UK and Denmark come on the market?

Analysts believe that the supply problem will require:
a) a very large tolerance of both brewers and maltsters concerning the specifications of barley and malt,

b) there will be efforts to import barley from third countries, either under the preferential import quota at an import tax of € 16,- per ton or under the tax-free customs-controlled import/export scheme. Licences under the preferential import quota have a validity of 45 days. Ex/Import business requires a preserved identity of the goods. Apart from the administrative problems of such business, the main problem is the availability of good malting barley outside the EU at acceptable prices.

c) the last and regrettable solution of a barley deficit will be a reduction of malt production, which will certainly happen, specifically in those areas with insufficient local supplies and high transport cost from the surplus countries.