Base Currency: Euro, EUR on 30-July-2004 1 EUR = 1.2031 USD 1 EUR = 0.6626 GBP 1 EUR = 1.5962 CAD 1 EUR = 1.7228 AUD 1 EUR = 134.97 JPY 1 EUR = 3.6526 BRL 1 EUR = 35.0102 RUB	Base Currency: US Dollar on 30-July-2004 1 USD = 0.8313 EUR 1 USD = 0.5506 GBP 1 USD = 1.3267 CAD 1 USD = 1.4320 AUD 1 USD = 112.2 JPY 1 USD = 3.036 BRL 1 USD = 29.10 RUB
EUR/USD Chart

Canada, Montreal: Molson, Inc. and Adolph Coors Company said on July 29 that following shareholder approval of their proposed merger, they will apply to list the Class A and Class B shares of Molson Coors Brewing Company on the Toronto Stock Exchange (TSX). This listing would be in addition to the previously announced listing of Class A and Class B shares on the New York Stock Exchange (NYSE) and the listing of exchangeable shares on the TSX. "Following numerous meetings with investors held in Canada this week, the companies have determined that there is significant demand for Molson Coors Brewing Company to pursue a dual listing of its primary shares and we will move in that direction," explained Daniel J. O'Neill, President and CEO of Molson. Molson Inc., founded in 1786, is one of the world's largest brewers of quality beer with operations in Canada, Brazil and the United States. A global brewer with CAN$3.5 billion in gross annual sales, Molson traces its roots back to 1786 making it North America's oldest beer brand. Committed to brewing excellence, Molson combines the finest natural ingredients with the highest standards of quality to produce an award-winning portfolio of beers including Molson Canadian, Molson Export, Molson Dry, Rickard's, A Marca Bavaria, Kaiser and Bavaria. Founded in 1873, Adolph Coors Company is the world's ninth-largest brewer, with $5.4 billion in annual gross sales. Its principal subsidiary is Coors Brewing Company, the third-largest brewer in the U.S., with a beverage portfolio that includes Coors Light, Coors Original, Aspen Edge, Killian's, Zima XXX and the Keystone family of brands. The company's operating unit in the United Kingdom, Coors Brewers Limited, is the U.K.'s second-largest brewer, with brands that include Carling -- the best-selling beer in the U.K. -- Grolsch, Worthington's, Reef and the recently launched Coors Fine Light Beer.

Russia: Russian financial giant Alfa Group intends to raise its stake in Sun Interbrew brewery despite plans by larger shareholders to boost control over the firm, an Alfa Group official said on July 29. Alfa Group, whose interests stretch from oil to banking and telecoms, bought 10.4 percent of voting shares in Sun Interbrew on July 13, Reuters revealed. On July 27, Belgian brewing giant Interbrew and India's Sun Group, which own 34.25 percent of voting shares each, said they had agreed to buy more voting shares to increase their combined participation to 75.5 percent. Analysts interpreted the decision as an effort to stave off Alfa's attempt to position itself as a third major shareholder in a company which works in one of Russia's fastest-growing industries. "We are not renouncing plans to increase our stake in Sun Interbrew," Igor Litvak, vice president of Alfa Eko, Alfa Group's investment and trading arm, told Reuters. "Such actions (by SUN Group and Interbrew) were predictable and will affect our plans in no way." Sun Interbrew is Russia's second biggest brewer in Russia and the biggest one in Ukraine. Last year it produced 16.1 million hectolitres of its local Klinskoye and Tolstyak brands as well as Interbrew's Stella Artois and Becks. Litvak declined to say whether Alfa Eko would buy the shares on the open market or offer a buyout deal to other shareholders. "We are considering all possibilities," he said.

Colombia: Brewer Bavaria Business Group (GEB), which dominates beer markets in Colombia, Peru, Ecuador and Panama, reported on July 29 a slip in quarterly profits due to financing costs but slightly higher operating income. Second-quarter net profit fell to 19.4 billion pesos ($7.4 million) from 38.0 billion pesos in the period to June 2003, the company said. The fall was due largely to financing costs, said the company run by Colombian magnate Julio Mario Santo Domingo. GEB earnings before tax, interest, depreciation and amortization (EBITDA) rose to 460.8 billion pesos from 436.5 billion pesos in the second quarter of 2003, according to Reuters. Operating income rose to 1.2 trillion pesos ($454.9 million) in the second quarter from 1.17 trillion pesos from April to June 2003. "All our operations saw significant growth, especially in the beer segment in Ecuador and Panama, where we have been able to maintain our leadership in very competitive environments," said GEB president Ricardo Obregon. The drinks maker has been aggressively extending its reach in Latin America, and has spent $1.1 billion on expansion by buying brewers in Peru, Ecuador and Panama to double its output over the past three years. It said in March that it aimed to become the world's seventh-largest brewer within three years as Latin American populations grow and beer consumption increases. But it said at the time it has no plans for further acquisitions this year. Operating costs rose by 9.8 percent compared to the second quarter of 2003 to 392.5 billion pesos ($149.0 million), largely due to more spending on marketing in Colombia, where the company launched products, and in Ecuador. Sales of beer and malt drinks increased by 3.3 percent to 6.72 hectoliters. Virtually all the growth came outside Colombia...more info

Mexico: Fomento Economico Mexicano, S.A. de C.V. (“FEMSA”), the leader in Latin American beverages, reported on July 28, 2004 its operational and financial results for the second quarter and first six months of 2004. FEMSA Cerveza total volume increased 3.8% (2.5% domestic and 16.8% exports) during 2Q04. Income from Operations up 15.4% versus 2Q03, delivering EBITDA margin expansion of 210 basis points to reach 34.3% of total revenues. FEMSA Comercio added 189 net new convenience stores during the quarter, now totaling 3,086 locations nationwide, further consolidating its leadership in the Mexican convenience store industry and its strategic role for our beverage operations. FEMSA Consolidated net debt decreased by US$ 239 million in 2Q04 from 1Q04 levels, combining an actual reduction of US$ 159 million with an exchange rate translation effect of US$ 80 million. Jose Antonio Fernandez, Chairman and CEO of FEMSA, commented, “This quarter was an eventful one, particularly for our beer operations, and each new development builds on our enthusiasm and expectations for the future. We announced the unwinding of our business relationship with Interbrew and our repurchase of the 30% of FEMSA Cerveza. We also announced a new commercial agreement with Heineken for the import, marketing and distribution of our brands in the key U.S. market. And we reached an agreement to be the exclusive importers and distributors of Coors Light in Mexico. While these are all excellent news, and the new agreements will significantly improve our business platform going forward, I am particularly pleased with the results achieved in the domestic beer market, where we turned in another solid quarter of profitable volume growth. The combination of such encouraging news from our beer operations, with the significant progress made by KOF in the integration of its new territories and the development of the right competitive strategies for each market, as well as yet another quarter of robust growth at Oxxo, fill us with satisfaction and optimism about the road ahead. However, we realize that with growth comes added responsibility...more info

USA: Anheuser-Busch Cos. has recently posted record sales, earnings for second quarter and first six months of 2004. With strong growth from all of its major operating segments, Anheuser-Busch Cos., Inc. achieved record sales and earnings for the second quarter and first six months of 2004, it was announced on July 28, 2004 by Patrick Stokes, president and chief executive officer of the company. Consolidated net sales increased 6.4 percent in the second quarter, while earnings per share increased 10.7 percent. Net sales and earnings per share increased 6.2 percent and 13.6 percent, respectively, for the first six months. Results for the first six months of 2004 benefited from a $19.5 million pretax gain ($.015 per share) from the sale of commodity hedges. This gain is reported in other income/(expense) on the consolidated income statement and as such does not impact gross profit or operating income. Excluding this gain, earnings per share for the first six months increased 12.5 percent vs. 2003. "Anheuser-Busch had an excellent second quarter and continued its track record of delivering consistent and dependable earnings growth. The company has now achieved 23 consecutive quarters of double-digit earnings per share growth. We remain confident in our ability to consistently achieve our double-digit annual earnings per share growth objective over the long-term, with an 11.7 1 percent earnings per share growth target for 2004, excluding the benefit of the commodity hedge gain," said Stokes. Strong growth in domestic revenue per barrel 2 continues to drive enhancement in profit margins. Gross and operating margins increased 30 basis points to 41.2 percent and 24.7 percent, respectively, for the first six months of 2004. Second quarter gross margin was level at 41.9 percent while operating margin increased 10 basis points, to 25.5 percent. For the second quarter, domestic beer gross margin increased 30 basis points and was essentially offset by lower margins for the commodity-based packaging segment. Return on capital employed 3 increased 70 basis points over the past 12 months to 18.6 percent...more info

Malt News

Revised forecast of trade in barley malt boost the 2003/04 total by 0.2 million tonnes, to nearly 5.8 million (grain equivalent), up from last year’s 5.6 million, according to estimates of The International Grain Council (ICG). This is mainly because of recent larger than expected shipments to Venezuela, which set a record. This, and higher imports by several other countries, more than offset the declines in shipments to the world’s biggest malt buyers, Brazil, Russia and Japan, ICG revealed on July 29. While there may be some increase in demand in Brazil, global trade in malt is expected to fall back again slightly in 2004/05.

UK: Marketing and sales strategy pays off for UK-based firm Muntons Malted Ingredients (MMI) with turnover increasing more than three times in as many years. On the back of the figures, the Suffolk-based maker of malted food ingredients used for their colour, flavour and texture characteristics in confectionery, bakery, breakfast cereals and beer applications this week picked up the Queen’s Award for Enterprise, International Trade, 2004, Beverage Daily revealed on July 28. Andy Janes, marketing manager at MMI put the growth down to multiple factors. “A healthy market moving in our favour contributed, as did a strong global marketing, sales and advertising push from the company,” he said to FoodNavigator.com. Sales have also benefited from the acquisition of a malt extract manufacturing plant in the UK from Novartis. “We acquired rights to their product but we needed to keep a hold on customer loyalty. There is lots of competition worldwide but a committed sales and marketing push meant we have been able to sustain the customers," added Janes. The firm, which saw export sales turnover grow from GBP 2.5 million in 2001 to GBP 7.9 million in 2003, told FoodNavigator.com it has invested about GBP 6 million in the business in the last three to four years. Most recently, GBP 1.2 million has been spent on a new flaking plant in Suffolk, with the finished ingredients targeted at the bakery market. The Stowmarket, Suffolk site for MMI is home to a 70,000 tonnes per year maltings, a 33,000 tonnes per annum malt extract plant with a total of 6,000 tonnes of spraydrying and band drying facility, plus a 3,000 tonnes per annum homebrew production line.

Barley News

World barley production is forecast by The International Grain Council (ICG) 2 million tonnes higher than before, at 146.2 million, an increase of 6.2 million from 2003. Prospects improved in Canada, the EU, Russia and the US. Higher feed use in Russia raises the world consumption estimate to 143.1 million tonnes, but this remains slightly below that in 2003/04, mainly because of a downturn in the EU, ICG posted on July 29. The trade forecast is raised by 0.4 million tonnes, to 15.3 million (14.3 million), because of higher than expected feed demand in Iran. The increased level of shipments is also due to the expected upturn in China’s malting barley imports. International barley markets remained weak in July, according to ICG, but derived some support from increased demand and slow new crop arrivals from Russia and Ukraine. Black Sea prices were up to $40 lower than the cheapest offers from the EU, where prices were at (November) intervention levels. ICG also revealed that during July 2004 Jordan bought 0.1 million tonnes of Black Sea feed barley; Libya purchased 30,000 tonnes of feed barley while Tunisia bought 50,000 tonnes of feed barley.

Canada: CWB barley crop forecast for the beginning of July was 12 million tonnes for the Prairie provinces, and 13 million tonnes for all of Canada. However, moisture reserves in the West are still insufficient. Exports were 1,36 million tonnes in August/April including 500,000 tonnes to Saudi-Arabia, 246,000 tonnes to China and only 240,000 tonnes to the U.S.

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.

French Malting Barley Price Evolution

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