Base Currency: Euro, EUR on 09-July-2004 1 EUR = 1.2394 USD 1 EUR = 0.6703 GBP 1 EUR = 1.6323 CAD 1 EUR = 1.7234 AUD 1 EUR = 134.83 JPY 1 EUR = 3.7901 BRL 1 EUR = 36.1037 RUB	Base Currency: US Dollar on 09-July-2004 1 USD = 0.8070 EUR 1 USD = 0.5408 GBP 1 USD = 1.3170 CAD 1 USD = 1.3905 AUD 1 USD = 108.82 JPY 1 USD = 3.058 BRL 1 USD = 29.13 RUB
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Belarus: The World Bank’s International Finance Corporation (IFC) is participating in privatization of a brewery in Belarus. IFC is investing about US$ 3 million in modernization of Dednovo Brewery in Belarus, controlled by Detroit Investment; and is lending around US$ 7 million to Detroit Belarus Brewing Company (DBBC, a structure of Detroit Investment). In return IFC will receive 20% of the parent company. Dednovo is to be reequipped completely. The brewery used to be the second largest beer maker in Belarus with a production capacity of 36 million litres per annum, however, in autumn 2002, it stopped the production process. After reequipment, the plant should produce 500,000 hectolitres of beer for the Belarus market by 2005, Russian Beer Union posted on July 5. The volume of Belarus beer market is estimated at about 3 million hl of beer, while the Russian one is estimated at about 75 million hl per year. Cyprus’ company Detroit Investment besides DBBC is controlling Vinorum and Ivan Taranov Breweries.

Canada, Montreal: Molson Inc. announced on July 6 it has signed a multi-year agreement with Halewood International, an independent UK-based drinks distribution company, to introduce a new Brazilian beer, A Marca Bravara, in the UK. "The export market is a priority as Molson wishes to build the international presence of its brands and maximize the potential of the brewing operations. Market research identified both the appeal of an easy-drinking Brazilian lager and the fascination of the UK market with a golden and exotic beer imported from South America," explained Peter Amirault Senior Vice-President Innovation and Business Development. "Once the decision was made to enter the UK market, we selected Halewood International because of their impressive business performance in the beverage industry to-date and their internal culture of building brands with both the on and off trade. We're confident that Halewood International will put A Marca Bravara right into the hands of our target market." With Brazil tipped as the trend for 2004 for everything from fashion to food, the Brazilian lager produced in the Rio de Janeiro region arrives in the UK this summer. Part of a proud brewing heritage which dates back to 1877, A Marca Bravara is meant to be enjoyed in true Brazilian tradition - ice cold so that its unique refreshing taste can be truly appreciated. The launch of A Marca Bravara in the UK has been strategically timed to capitalize on the growing consumer demand for premium imported beers, as well as the current boom in authentic Brazilian culture being experienced in the UK. In the summer of 2003, the same super premium Brazilian lager was successfully introduced to the Canadian market under the name A Marca Bavaria, where it has rapidly become one of the top selling packaged super-premium lagers...more info

South Africa, Johannesburg: Drinks giants Diageo and Heineken launched a joint venture in South Africa on July 6 along with regional partner Namibia Breweries. The new venture said in a statement that it would trade under the name "brandhouse" and would have annual sales of around 3.0 billion rand ($485 million), Reuters revealed. The three companies decided to combine their South African marketing and distribution operations after Heineken and Diageo bought a combined 28.9 percent stake in Namibia Breweries in 2003. The joint venture will compete with the mighty South African Breweries unit of global beer giant SABMiller, which controls more than 98 % of South Africa's beer market. The lucrative and fast-growing premium beer sector is much more open than the wider beer market, but SABMiller still controls more than 70 percent of the premium sector, thanks mainly to a contract to brew Heineken's Amstel brand beer in South Africa. "South Africa is an incredibly exciting market for us. Overall growth in the liquor industry has been minimal for some years now, but the premium sector is growing very fast," brandhouse Managing Director Simon Litherland said in a statement. "Through our unrivalled portfolio of premium brands and our global experience in this sector, we are very well positioned to take full advantage of the opportunities the market presents." Among the best-known brands the joint venture will market and distribute are Windhoek, Heineken, Guinness and Becks beer, Johnnie Walker and Bell's whisky and Smirnoff Vodka. ($1=6.186 Rand)

Hong Kong: Anheuser-Busch Cos is set to take Harbin Brewery private after a U.S. fund sold its 10.01 percent stake in the Chinese brewer, a source familiar with the situation said on July 8. Castlerigg Master Investments Ltd. sold its stake on July 5, according to a stock exchange filing, Reuters revealed on July 8, 2004. Anheuser-Busch, brewer of Budweiser, owned about 83.54 percent stake in China's fourth-largest beer maker Harbin Brewery as of June 30 after agreeing to take over the firm in a deal worth US$720 million or HK$5.58 a share. Anheuser-Busch won a landmark takeover battle with arch-rival SABMiller for control of Harbin. It is likely that Anheuser-Busch now holds more than a 93 percent stake, which means it will take Harbin private, said one analyst who declined to be identified. Anheuser-Busch had said in its offering document that it intends to delist Harbin shares once it holds at least 90 % in the Chinese brewer. The U.S. brewer is expected to make an announcement after the Hong Kong stock market closes on Friday, when its general offer is set to close.

The world's global beer industry remains in fairly good shape, with volume sales up by 2.2% in 2003, according to a new report launched this month. But, the report adds that it is the developing markets that are driving that growth and that China has overtaken the US as the world’s largest market. Euromonitor’s new report suggests that developing markets, such as China and Russia, are helping to drive growth in the global beer market. This growth is underpinned by increasing disposable incomes, rising living standards and greater levels of foreign investment, mainly in the form of strategic alliances with local manufacturers. As a result, China has now overtaken the US as the world’s largest beer market, with Euromonitor finding that total volume sales increased by an impressive 41% in China between 1998 and 2003. The story is very different for mature regional markets such as Australasia, North America and Western Europe, where brewers have been struggling to achieve volume growth. Natasha Cazin, global beer industry analyst at Euromonitor, said: “The struggle for volume growth in mature markets is due to a combination of factors. At Euromonitor, we have noticed that consumer confidence is weakening, particularly in the US and Japan, plus consumption habits are also changing, with younger consumers increasingly opting for alternative drinks, such as FABs, over traditional lagers and dark beers”. As a result, most of the major breweries are placing an increased focus on premium beers, making them more visible and more widely available in both retail and on-trade channels. In the UK, for example, 2003 saw the demise of Heineken Cold Filtered to be replaced by a 5% abv genuinely imported version. Scottish & Newcastle also announced its intention to cease production of several of its economy lager brands, including Hofmeister and Kestral Pilsner, as well as its McEwan’s standard lager and Courage Light standard ale brands, in order to focus on the premium segment of the market...more info

Malt News

SAB Miller has held a tender for 120,000 tonnes of EU malt for their breweries in the EU, Russia, Central America and Africa. Prices were equally low as in domestic markets reflecting levels of EUR 240 FOB in bulk and EUR 230 ex works interior.

Costa Rica and Nicaragua are rumored to have purchased EU-malt at about US$ 340 and Canadian malt at near US$ 325 CIF East/West Coast in bulk.

Barley News

Finland: Finnish malting barley farmers have in recent years started to change their production from domestic varieties, especially Saana, to the European varieties Scarlett and Barke, Viking Malt revealed in a press release. This change is moving faster and faster due to the better agronomical characteristics of European varieties. The newest variety approved by the Finnish malting barley committee is Annabell, which has been approved as malting barley in Finland for crop 2004. It is however recognized that “imported” varieties are not designed for Finnish growing conditions and due to their longer growing period can cause problems if Finland gets an early and rainy autumn. Approximately 139,000 hectares where used for malting barley cultivation in 2003. The forecast for crop 2004 shows that this area is expected to increase by about 6,000 hectares to a total of 145,000 hectares. For crop 2004 the native Saana will not be the dominating variety anymore since it loses a share of about 10,000 hectares to a total share of about 45,000 hectares. Scarlett is predicted as the new number one after gaining about 4,000 hectares in a year, from 46,000 to 50,000 hectares. Barke represents the second biggest change with an increase from about 21,000 to 30,000 hectares. In Finland the sowing takes place during the first weeks of May.

France: For 2003-2004, barley harvested area is estimated at 1.8 Mha, up from 1.6 Mha in 2002-2003. Barley yields, estimated at 5.7 t/ha for 2003-2004, were reduced by about 15% due to poor growing conditions, according to Agriculture and Agri-Food Canada. Lower yields more than offset increased area, resulting in a 9% decrease in production, estimated at 10.0 Mt. Due to the smaller crop, exports are estimated at 2.2 Mt, down from 2.9 Mt in 2002-2003. Feed use is expected to increase because of the improved price competitiveness of barley, which is replacing wheat in the formulation of poultry feed. Carry-out stocks are estimated at 1.2 Mt, down from 1.8 Mt in 2002-2003. For 2004-2005, barley harvested area is forecast at 1.6 Mha, down from 1.8 Mha, due largely to a shift to corn and wheat production. However, with a return to more favourable growing conditions, increased yields are expected to more than offset the effects of lower barley area. As a result, production is forecast by IGC at 11.0 Mt, up by 11% from 2003-2004. Carry-out stocks are forecast at 1.7 Mt, versus 1.2 Mt in 2003-2004 and the 5-year average of 1.5 Mt.

Canada barley production is forecast by AAFC on July 5 to increase by 3% due to higher yields, despite lower seeded area, based on Statistics Canada's June survey of seeded area. Due to higher carry-in stocks and production, supplies are expected to rise by 9%. Feed use is expected to increase, due to higher barley supplies in western Canada and increased shipments to eastern Canada. Malting barley exports are expected to rise, as import demand from China returns to normal. Feed barley exports are forecast to fall, due to increased competition from the EU-25, Australia and the Black Sea region. Carry-out stocks are forecast to increase. Off-Board feed barley prices are expected to be the same as 2003-04, as support from higher US corn prices is offset by pressure from larger domestic production. The CWB June PRO for No.1 CW Feed Barley is $134/t I/S VC/SL, versus $164/t for 2003-04. The PRO for Special Select Two Row designated barley is $187/t versus $200/t for 2003-04, mainly due to higher supplies expected in Europe and Australia.

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

July 2004:
VI Moscow Beer Festival;
Lucky Baldwin's IPA Festival;
BevTek / BrewTek China;
Vermont Brewers Festival;
BEVTECH 2004 Thailand;
INTERNATIONAL QUALITY GRAINS CONFERENCE;
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;
TecnoBebida Latin America International Exhibition of Technologies for the Beverage Industry;

September 2004:
6th BELGIAN BEER WEEKEND;
China Brew 2004 / China Beverage 2004;
International Brewery and Soft Drinks Industry Exhibition;
FOOD & BEVERAGE PROCESSING & PACKAGING INDONESIA 2004;
Pivoindustria International Beer Industry Exhibition;
National Beer Wholesalers Show 2004;
PAN ASIAN FOOD & BEVERAGE TRADE SHOW 2004;
Barley Malt Quality Evaluation Short Course;
EUROMALT BARLEY SEMINAR 2004;
bevex Beverage Trade Fair;
InterBev 2004;
YUGOSLAVIA INTERNATIONAL FAIR OF FOOD & BEVERAGES 2004;
BevExpo 2004;
Great American Beer Festival;

More events are available on site e-malt.com