Base Currency: Euro, EUR on 01-June-2004 1 EUR = 1.2188 USD 1 EUR = 0.6656 GBP 1 EUR = 1.6626 CAD 1 EUR = 1.7049 AUD 1 EUR = 133.33 JPY 1 EUR = 3.8868 BRL 1 EUR = 35.3452 RUB	Base Currency: US Dollar on 01-June-2004 1 USD = 0.8207 EUR 1 USD = 0.5461 GBP 1 USD = 1.3641 CAD 1 USD = 1.3988 AUD 1 USD = 109.41 JPY 1 USD = 3.189 BRL 1 USD = 29 RUB
EUR/USD Chart

China: Anheuser-Busch is expected to bid about $720 million for Harbin Brewery Group Ltd after raising its stake in the Chinese beer maker, topping rival SABMiller's hostile $550 million offer. The maker of Budweiser beer boosted its holding in Harbin from 29 % to 36 % on May 31, which will trigger a full bid under Hong Kong rules. A source familiar with the deal said on June 1 that Anheuser-Busch will offer HK$5.58 a share, the same price it paid to lift its Harbin stake, according to Reuters. Harbin shares were suspended ahead of the market open on Tuesday after closing at HK$5.10 on Monday. The shares have rocketed 58 % since early May, when SABMiller and Anheuser-Busch first squared-off for control of the company. Global brewers have been pouring money into beer makers in China, the world's largest market by volume, but where the average person drinks just 19 litres of beer a year, compared with 50 in Japan and 84 in the United States. Anheuser-Busch's offer values Harbin at 35 times forecast 2004 profits. "Harbin is just a regional brewery. It isn't worth that much," said Herbert Lau, research director of Celestial Asia Securities, who called Anheuser-Busch's bid "unreasonable." The U.S. brewer's surprisingly high bid and its increased stake make it tougher for SABMiller to make a rival bid, ING Financial Markets analyst Lilian Leung said. Still, SABMiller would not walk away empty-handed. If it sells its stake to Anheuser-Busch at HK$5.58 a share, it would pocket a profit of $124 million on its investment in Harbin...more info

Philippines: San Miguel Corp., the Philippines' largest food and beverage conglomerate, said on June 1 it has received the green light from the Thai government to produce beer in Thailand. "This is the first step in San Miguel's entry into the highly attractive Thai beer market," the company said in a statement. The approval was given by Thailand's Ministry of Finance. Just two months ago, San Miguel signed a deal to acquire the beer division of Thai Amarit Brewery Ltd. The acquisition, valued at $102 million, is aimed at accelerating San Miguel's entry into Thailand's beer market. The transaction is expected to be closed in the next two to three weeks, San Miguel said on June 1. Thai Amarit's beer division includes a modern and fully equipped beer brewery on a 21.75 hectare site in Pathum Thani province in central Thailand. The brewery, which uses European technology, has a capacity of one million hectoliters. One hectoliter is equivalent to 100 liters. In March, San Miguel broke ground on an industrial estate in Rayong, Thailand. The complex will handle the manufacturing and distribution of all San Miguel product lines in Thailand. San Miguel has set aside $700 million for its overseas expansion plans, and has so far spent or earmarked around $300 million for investments in Thailand, China and Vietnam.

Russia: SUN Interbrew Limited, a leading brewer in Russia and Ukraine, announced on May 31, 2004 its financial results for the 1st quarter ended 31 March 2004. The Company’s beer volume grew by 48.6% versus the 1st quarter of 2003. Net Turnover increased by 60.7% versus the 1st quarter of 2003. EBITDA for the 1st quarter was €17.2m, or 126.9% higher than in the same period in 2003. Excluding the negative currency, EBITDA was €18.5m, a 144.1% increase versus the same quarter in 2003. EBIT growth for the 1st quarter of 2004 was €6.0m versus the 1st quarter of last year. Net Loss was reduced to € (1.8)m from € (7.1)m. SUN Interbrew continued to build on last year's key initiatives; strengthening our route to market; introducing new higher margin brands; and optimizing our operational efficiency. In Russia, these activities led to a volume growth of 61.0% for the 1st quarter leading to an improvement in market share to 16.0% up from 12.8% in the same period of 2003. In Ukraine, the Company realised a volume increase of 21.4%. In the 1st quarter the market share reached 34.3%. SUN Interbrew’s brands: Tolstiak® Grechishnoye, Klinskoye® Arriva and Sibirskaya Korona® Yantarnoye and Georgievskoye were launched into the Russian market. In March, the Company started producing Stella Artois® at Novocheboksarsk brewery in Russia. Chernigivske® Bagryane and Yantar® Unfiltered were introduced on the Ukrainian market. The financial performance of SUN Interbrew Limited in the 1st quarter of 2004 was underpinned by strong volume growth in both Russia and Ukraine. The Euro exchange rate evolution had a €1.3m negative impact on EBITDA...more info

Hong Kong: Guangdong Brewery Holdings said on June 1, 2004 it signed a letter of intent to build a 375 million yuan ($1=CNY8.28) brewery to boost production by 200,000 metric tonnes per annum. The company said it plans to finance the plant with its own cash, bank borrowings, or debt or equity fund raising, according to Reuters. "The investment in the brewery is a good opportunity for the group to further increase its production capacity, add to its supply chain and network of strategically located breweries and represents another major step to penetrate into the Guangdong beer market, in particular the Pearl River Delta region," it said. Construction is planned to begin early next year with the plant entering production in early 2006, making Guangdong Brewery's Kingway brand of beer. Guangdong Brewery said it may subsequently consider doubling production at the plant by a further 200,000 tons. The company said last month it would ask shareholders to approve a name change to Kingway Brewery Holdings Ltd. to better reflect the importance of its biggest brand of beer.

UK: British brewer and pub chain Fuller, Smith & Turner posted a 3.0 % rise in full-year profits on May 28 and said it was encouraged by an upturn in London's financial district after three tough years for its City pubs. Fuller's 23 pubs in London's square mile, which make up 10 % of its total estate, had been hit by a downturn in investment banking, which left tens of thousands of City workers jobless since late 2000. There have been recent signs that confidence is returning and employment is picking up again, Chief Executive Michael Turner told Reuters. At 1014 GMT shares in the maker of Britain's leading premium ale, London Pride, were up 1.5 percent at 640 pence. Pre-tax profit before exceptionals rose to 16.9 million pounds ($31.1 million) for the year to end-March on turnover up two percent at 140.3 million pounds. A good performance in its beer-making division, with profits by up 14 percent and volumes by two percent for the year, was blighted by weak trading at its City pubs and its eight hotels. "Hotels are pretty cyclical; everyone in the hotel market is suffering," Turner said. There were signs of improvement in the second half, and the firm opened a new 55-room hotel in west London last week, he added. He saw the company's biggest growth coming from beer and planned to extend the brewery floor space by 11 percent to cope with increased demand. Growth by acquisition is also an option, and the company will consider any opportunity that arises, Turner said. The brewer increased its dividend on its "A" shares by 7.0 percent to 12.21 pence, bringing the total for the year to 17.3p.

Malt News

Malt Export of European Economic Community, in metric tonnes

	1999	2000	2001	2002	2003
Austria	22,934	20,274	14,556	17,247
Belgium	516,293	497,350	612,824	485,840	492,583
Germany	538,366	528,564	563,301	590,618	480,160
Denmark	138,417	135,563	154,005	160,541
Spain	60,447	36,203	12,800	18,300
Finland	110,866	108,019	105,500	95,964	101,389
France	1,028,094	1,057,378	1,058,544	1,086,521	1,102,915
Italy
Ireland	51,500	170,330	46,000	59,241	40,835
Netherlands	114,658	137,025	144,664	126,171	126,368
Sweden	99,983	102,080	104,620		92,643
UK	434,455	435,594	428,532	378,993	363,641

USA, Great Falls: Although the International Malting Co., a $70 million plant, is a year away from starting operation, and work inside the monstrous building is taking place at a frenetic pace, Great Falls Tribune posted on May 30. "This is going to go right to the last day," said Philip Van Rensburg, director of corporate engineering for International Malting. A peek inside the 132,000-square-foot structure hints at where the time will be spent. In various stages of completion are a series of six steel tanks or vessels, 100 feet in diameter, that are being welded together, sheet by sheet. Once formed, the tanks will be sandblasted inside and out to provide a smooth, finished look. "This is not just a tank," said Van Rensburg, noting each must be perfectly round to allow machinery that will stir barley as it is being transformed into malt to work properly. The germination building and silos will be joined by a large kiln operation, the third major component of the plant. The actual kiln will be 120 feet in diameter, making it the second largest such operation in the world, according to Chris Mulder, IMC's chief manufacturing officer. There are just a handful of suppliers of malting equipment in the world and IMC figured it could spend up to $25 million if it bought directly from them. Instead, the Milwaukee-based company, a subsidiary of the Lesaffre International Corp., has acquired not only $9 million in proprietary equipment but rights to technology that allows it to build other necessary components. "We took that other $18 million and are having it all made," said Van Rensburg. "We are fabricating the majority of the stuff that people normally buy right here in this building...more info

Barley News

EU: According to analysts’ estimations, crop forecasts in the EU are good. Eastern France and parts of Germany complained about dryness, but there have been enough rainfalls recently to alleviate any fear of a real drought. Of course, May and June are still critical months for plant development. The French Ministry estimates spring barley acres at 574,000 ha against earlier industry estimates of only 500,000 ha. Therefore crop estimates for all barley in the old EU now range from 48.4 to 49 million tonnes, 2.5 million tonnes more than last year. Spring barley, however, is anticipated 1.1 to 1.7 million tonnes less. Coceral forecasts a barley crop of 8.25 million tonnes in the 10 new countries, of which 5 million tonnes spring barley.

Australia: Grain storage company AusBulk's managing director John Murray said on June 1 he had generally received positive feedback about a planned merger with ABB Grain Ltd, according to Asia Pulse. Mr Murray's comments came after AusBulk posted a A $31.8 million (US$22.71 million) net profit for the six months to March 31 this year, up 63 % from the previous first half. The result was boosted by the 2003/04 harvest, the third largest on record in South Australia, bringing in revenue of A$366 million (US$261.42 million) for AusBulk. The company was also boosted by a A$6.8 million (US$4.86 million) one-off tax benefit. AusBulk announced a few weeks ago that it would be part of an A$850 million (US$607.11 million) merger - along with its 53.5 per cent shareholder United Grower Holdings (UGH) - with ABB Grain. The new company would go under the ABB Grain name and would come under ABB Grain's current Australian Stock Exchange (ASX) listing. The merger announcement followed several years of on-again, off-again discussions with ABB Grain. AusBulk is not listed on the ASX, but has a shareholder base among grain growers. Mr Murray said on June 1 he had received some feedback from the growers. "Obviously there's quite a long process ahead, with ACCC approval required, tax rulings required, we have got to go through a court approved scheme of arrangement," he said. "In general the majority of growers believe that the benefits of the merger are such that it's positive for the company...more info

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 online www.e-malt.com/MarketPrices

Malting barley prices. French barley prices.

Graph of the week
Agenda

June 2004:
BrewNZ 2004;
ALIMENTARIA MEXICO International Food and Beverages Exhibition;
Hotelympia;
BEVEX 2004 - Korea Int'l Beverage & Brewery Processing Technology Expo;
10th international symposium on pre-harvest sprouting in cereals;
BevTek / BrewTek;
IGC GRAINS CONFERENCE 2004;
26th Annual National Homebrewers Conference;
Scottish Traditional Beer Festival;
Coceral Congress 2004;
American Homebrewers Association 26th Annual National Homebrewers Conference;
Food Taipei;
The 9th International Barley Genetics Symposium;
Little Oktoberfest;

July 2004:
VI Moscow Beer Festival;
Lucky Baldwin's IPA Festival;
BevTek / BrewTek China;
Vermont Brewers Festival;
World Brewing Congress 2004;
Hop, malt and beer of Russia Exhibition;

August 2004:
Great British Beer Festival;
Worcester Beer and Cider Festival;
BeerTek China Beer and Brewing Technology Exhibition;
Peterborough Beer Festival 2004;
FOODWORLD Food and Beverage Exhibition;

More events are available on site e-malt.com