Beer consumption in China has experienced striking growth as retail value of beer soared 6.5 percent to 188.65 billion yuan in 2006 and growth is forecast to continue in the next few years, China Daily reported November 2.

According to transnational market research firm Euromonitor International, beer is mainly sold through off-trade channels, which accounted for 68 percent of the total volume in 2006. Consumers prefer to buy beer from off-trade outlets and consume it at home.

Market performance

Modern distribution channels such as supermarkets or hypermarkets and convenience stores boosted growth in off-trade sales last year, increasing the number of outlets on the mainland and offering lower unit prices than independent food stores.

Meanwhile, continuous economic development and disposable income surge resulted in consumers eating out and socializing with friends in nightclubs and bars with greater frequency, leading to strong increase in on-trade sales.

Premium and standard lager enjoyed fast growth in on-trade channels while economy lager lost share due to higher income levels and consumers trading up.

Within lager, light-tasting and premium-positioned draft lager saw the strongest growth in 2006 and benefited from a number of launches such as Shenzhen Kingway Brewery's Kingway New Life Beer and Kingstar Xin Yi Dai (new generation, in ...More Info

InBev announces the closure of the transaction with Cofinimmo under which Cofinimmo has acquired a 90% interest in Immobrew S.A./N.V., a subsidiary of InBev Belgium that directly owns 823 pubs in Belgium and indirectly owns 245 pubs in the Netherlands, for an aggregate of 419 million euro, on a debt and cash free basis, according to InBev’s press release, October 31.

At the same time, InBev Belgium and InBev Netherlands have entered into master lease agreements with Immobrew and its Netherland affiliates with respect to these pubs.

This sale is consistent with InBev’s commitment to free up capital invested in non-core activities and will allow us to concentrate on winning with consumers, via our beer brands.

InBev Belgium retains a 10% interest in Immobrew, to be renamed Pubstone SA/NV. Immobrew holds a master lease agreement (commercial type) of 27 years (plus renewal mechanism) with InBev Belgium for an initial rent of 17.4 million euro per annum (indexed to CPI). Substantially similar master lease agreements are in place with affiliates of Immobrew with respect to the Netherlands pubs for an initial rent of 9.2 million euro per annum (indexed to CPI). The sale results in an estimated one-time gain of 334 ...More Info

Japanese brewery Kirin Holdings Co Ltd posted a 4.6 percent decline in quarterly operating profit, hurt by rising raw materials costs and sluggish beer sales, and cut its full-year outlook by 3 percent, Reuters reported November 1.

The company, which vies with Asahi Breweries Ltd to be Japan's No.1 brewer, grabbed headlines last month with a $2.6 billion deal to take control of drug maker Kyowa Hakko as it seeks to cut its reliance on Japan's shrinking beer market.

Kirin, known for its "Lager" and "Ichibanshibori" beer, said on Wednesday it would raise the price of beer for the first time in 18 years in February, to pass on rising raw materials costs, a move expected to lead to a 3-5 percent rise in retail prices.

But its beer sales remain weak. It said its domestic beer shipments fell 2.2 percent in January-September, underperforming the overall market's 1.3 percent decline.

"A drop in the overall Japanese beer market for 2007 is likely to be bigger than we anticipated," said a Kirin spokeswoman.

It now expects a full-year operating profit of 114 billion yen ($987.7 million), down from an earlier forecast of 117 billion yen and 2 percent below last year. It would mark its first ...More Info

The Baltika brand has for the third time been listed among the three leaders in brand rankings carried out by the international consulting company Interbrand Group, and each year it shows positive growth in the valuation, according to company’s press release, October 30.

In 2007, the brand grew by 15% compared to a year ago and its value now amounts to 2.2 billion dollars (59,301 million rubles), which points to Baltika’s unconditional leadership among Russian brands in the FMCG category. Baltika is the only beer brand found among the top ten leaders; it occupies position number three, following two telecom brands.

Positions 11 and 18 in the ratings were taken by the brands Arsenalnoye and Yarpivo respectively. This is the first time that they entered the long list of most valuable Russian brands.

The rating results were published in the October issue of the magazine BusinessWeek-Russia. This is the third time that the company Interbrand Zintzmeyer & Lux AG and BusinessWeek-Russia have prepared their ratings of "The Most Valuable Russian Brands." The methodology of the listings has been certified by all the leading audit companies. The value of each brand was determined on the basis of the share of revenues which a given ...More Info

Foster's Group Ltd, the world's second-largest wine company, said a higher Australian dollar and drought were hurting earnings, but tipped another strong year as it focuses on high-priced premium beer sales, according to Reuters, October 31.

"While the currency will remain a drag on earnings growth and wine returns, I believe we can continue the strong constant currency performance we saw in the second half of the 2007 financial year," Chief Executive Trevor O'Hoy told the company's annual general meeting in Adelaide.

Shares in Foster's, Australia's largest alcoholic drinks group, were flat at A$6.32 at 0040 GMT. The stock had been trading more than 1 percent lower ahead of the meeting.

O'Hoy warned there would be a significant negative impact on 2008 earnings from the strong Australian dollar. The company makes about a quarter of its earnings from the United States.

Every 1 cent rise in the Australian dollar against the U.S. dollar reduced pre-tax profits by about A$4.5 million, he said. The Australian dollar touched 23 ½ year peaks this week, gaining over 4 percent against the U.S. dollar in October.

A crippling drought in Australia would also result in a smaller 2008 wine vintage. However, Foster's said the tightening grape supply situation would ...More Info

Heineken and Carlsberg (the "Consortium") note the announcement earlier today by Scottish and Newcastle plc ("S&N") of its initiation of arbitration proceedings with respect to alleged breaches by Carlsberg of the BBH Shareholders’ Agreement, according to Heineken’s press release, October 31. The Consortium also notes that Carlsberg has squarely refuted these claims in its response. Rather than pursuing this legal distraction, the Consortium urges the Board of S&N to engage with the Consortium with a view to progressing its proposal which is aimed at delivering certain cash value to S&N shareholders. The Consortium continues to believe its proposal at 720p per share in cash represents a compelling and deliverable proposition for S&N shareholders at a value that is significantly in excess of the standalone independent value of S&N.

Brewer InBev will be raising the prices of its products by an average of 3 pct as of Feb 1, 2008 due to increases in raw material prices, reports dailies L'Echo and De Standaard, citing the company, according to Thomson Financial, November 2.

The price increase will apply to barrels, kegs for the catering industry and bottles and cans for home consumption. Only Hoegaarden white beer will not be affected.

Different brands will be impacted by different rates. Jupiler bottles and cans prices will increase 3.5 pct, the company said, cited in the reports.

The prices of the goods sold in shops to consumers will be under the discretion of retail establishments.

A total of 319.2 million litres of beer had been sold by the end of September, according to Finnish Federation of the Brewing and Soft Drinks Industry, October 31. That is 2.3 million litres or 0.7% less than in the same period of 2006.

Beer sales by members of the Finnish Federation of the Brewing and Soft Drinks Industry represent about 93% of statistically recorded sales in Finland (July 2007).

A study by TNS Gallup indicates that by the end of August, private imports of beer by travellers had declined by 3.4 million litres compared with the previous year. Beer imports by the end of August totalled 15.1 million litres.

“The decline in both beer sales in Finland by our member companies and private imports by travellers prefigure a decrease in total beer consumption. In addition, there will be great pressures to raise beer prices after the turn of the year. 2008 will be a challenging year. The state should exercise greater restraint in its tax policies. The alcohol tax hikes the government has proposed to Parliament would make Finland’s beer tax the highest in the European Union. This is not to the advantage of consumers,” says Timo Jaatinen, Managing Director of the ...More Info

Prairie malting barley sold to China by the CWB has achieved a marketing edge after being approved for use in products carrying the prestigious Chinese Green Food label, CWB reported in a press release, November 1.

China’s Green Food Development Centre has accredited 600 000 tonnes of malting barley per year from the CWB – triple the amount from any other exporter. The approval gives a premium seal of quality and food safety to Chinese beer made with accredited western Canadian barley that is exported exclusively by the CWB.

“With this accreditation, western Canadian farmers have a stronger competitive advantage in the world’s largest and fastest-growing beer market,” said Greg Arason, CWB President and CEO. “Our malting barley is preferred by major malting companies and brewers in China.”

Haiguang Shi, general manager of the CWB’s Beijing office, said Green Food certification gives the CWB an advantage with consumers.

“The Green Food label assures consumers that a food product is produced according to safe agricultural practices, in an environmentally sustainable way, free from air and soil pollutants,” Shi said. “This is very valuable to our customers.”

The accreditation process was very rigorous. Beginning more than a year ago, the CWB submitted several hundred pages ...More Info

In September 2007, the import volume of barley to Russia totalled 16.800 tonnes, up by 1.8 times as compared to the previous month and up by 1.7 times as compared to the last year data, according to Agrimarket, November 2.

The main suppliers of barley were France (8.600 tonnes), Sweden (2.900 tonnes), Great Britain (2.600 tonnes), Kazakhstan (1.300 tonnes) and Finland (1.200 tonnes).

At that, during the first three months of 2007/08 MY (July-September), the total import volume of barley totaled 51.900 tonnes, down 35.5% as compared to the last year period.

Small brewers from Australia to the U.S. face the daunting prospect of tweaking their recipes or experimenting less with new brews thanks to a worldwide shortage of one key beer ingredient and rising prices for others, Canadian Press reported October 30.

Oh, and one other thing: beer prices are likely to climb. How high is anybody's guess. Craft brewers don't have the means to hedge against rising prices, like their industrial rivals.

"I'm guessing, at a minimum, at least a 10-per-cent jump in beer prices for the average consumer before the end of the year," said Terry Butler, brewmaster at central Washington's Snipes Mountain.

Sales have been relatively flat in recent years among the U.S. big three brewers - Anheuser-Busch, Molson Coors Brewing Co. and SABMiller PLC. unit Miller Brewing Co - while small, independent brewers have experienced tremendous growth. The craft brewing industry experienced a 12-per-cent increase by volume in 2006, with 6.7 million barrels of beer. Sales among microbreweries, which produce less than 15,000 barrels a year, grew 16 per cent in 2006.

Now the bright spot in the brewing industry is facing mounting costs on nearly every front. Fuel, aluminum and glass prices have been going up quickly over a period ...More Info