Japan’s Sapporo Breweries Ltd., the recent successful bidder for Canadian Sleeman Breweries has plans to acquire regional brewer Ginga Kogen Beer Co. for JPY500 million (US$4.3 million) owned by a construction firm. The company has been laid under liquidation legal procedures ever since March 2006. Reports confirmed that Sapporo intends to accomplish the purchase of the brewery by the end of November 2006.

According to reports of October 12, shipments of beer in September by five major Japanese manufacturers, including Sapporo dropped 4.7 percent from the year earlier to the lowest level since an industry organization began compiling statistics in 1992.

Sapporo’s main rivals on the domestic market, Kirin Brewery Co. and Asahi Breweries, were respectively the No. 1 and the No.2 breweries over the January-September period, with a market share of 38% and 37.3% each.

In August, Sapporo Breweries Ltd. posted a net loss of JPY3.9 billion for January-June 2006 (JPY5.2 billion in 2005). The brewer said sales dropped by 4% to JPY200.1 billion.

Chinese beer maker Kingway Brewery Holdings Ltd. has signed an agreement to invest RMB 400 million in a new brewery in the southern province of Guangdong, China Knowledge released November 03. The new brewery located in Foshan City will boost the company’s total annual production capacity to 1.7 million t.

The Foshan plant, Kingway’s fifth in Guangdong and eighth in the Mainland, will start production only a year after construction completes.

The plant will contribute 200,000 t of beer a year in Guangdong, where Kingway currently produces 1.1 million t and has a 20% market share.

Kingway, the second-largest brewer in Guangdong, saw net profit decline by 12% to HK$71 million in the first half of this year due to pre-operating expenses for new plants.

The Hong Kong-listed company, in which Dutch brewer Heineken owns a 21% stake, plans to raise sales volume by 30% to 700,000 t this year. Targets of 1 million t next year and 1.5 million t in 2008 have also been set.

Gubernija AB, a major Lithuanian beer producer and one of the oldest industrial brewery in Baltic states, lost LTL2.1 million (€0.61 million) during the first nine months of the year. However, this is up 10.5 percent from the company’s losses of LTL1.9 million during the same period last year, Baltic Times published November 01.

Sales fell by 4 percent to LTL40.92 million, according to the company’s financial report. Beer production declined by 7.5 percent and the total production output was down 4.6 percent. Beer exports rose by 25.8 percent to 36,000 HL. The company, which is based in Siauliai, managed to trim annual losses to LTL4.1 million last year, down 13.9 percent from losses of LTL4.8 million the previous year. Revenues increased by 8.8 percent to LTL54.9 million.

Gubernija is one of the oldest industrial brewery which has evolved from the original concept of estate pub and brewery that were not only in Lithuania but in all Baltic states. Historical sources testify that brewery Gubernija has been producing beer since 1665.

EU maltsters/exporters booked 600,000 t of export licences from July 1 until October 24, of this year, almost 50,000 t less than last year, experts reported October 31. In view of the shortage of malting barley in Europe it must be assumed that total exports of the crop year 2006/07 will drop below last year's figure of 2.2 million t. The IGC estimate of EU exports of 3 million t of barley equivalent appears too high.

According to the International Grains Council’ Grain Market Report of October 26, the world barley production estimate is cut by 3 million t to 140 million t, the same as 2005. The drop is due to the Australian drought - its harvest may only be 4 million tons, the smallest since 2002 and lower yields in Canada after wet weather.

French malting barley is of better quality than anticipated but other EU countries report poor malting quality. Projected global barley consumption is unchanged from last month at 148 million tons, an increase in Ukraine, where pig numbers are increasing rapidly, offsetting a cut in Canada because of its reduced supplies.

The world trade forecast is cut by 2.1 million t to only 15.5 million t, the lowest for nine years, after reduced availabilities in Australia and Ukraine’s introduction of export quotas. Saudi Arabia and Iran will buy less feed barley and China less malting barley than previously foreseen.

A large deficit of malting barley of regular quality in the EU - 1 million t in analysts’ estimate of October 31 - is obvious. There are also continuous enquiries in the market for malting barley exports, one cannot exclude that 100,000-200,000 t will be sold abroad and increase the EU short.

A recent estimate of the "Malteurs de France" of large availabilities of good quality malting barley in France was happily adopted by many analysts, but not by the market. The price comparison of the beginning and the end of October looks as follows (prices in EUR as of October 02 / October 27):

French two-row spring barley, Scarlett, basis July, FOB Creil: 170.- / 198.-
French six-row winter barley, Esterel, basis July, FOB Creil: 150.- / 178.-
Danish two-row spring barely, Oct/Nov , FOB seaport: 180.- / 204.-
German two-row spring barley, Oct/Dec, CPT maltings Rhine: 190.- / 212.-