Anheuser-Busch InBev faces a tough task to make disposals and launch a rights issue in coming months to pay down big debts after completing the largest cash takeover in history, Reuters posted on November, 19.

$17 billion of debt is due for repayment in the next 12 months, analysts report.

Despite many doubts over its success in the current financial market turmoil, Belgium-based InBev completed its $52 billion debt-financed purchase of U.S. Budweiser-brewer Anheuser-Busch this week. "But with this comes significant risks: none more so than the clock on the debt repayment has now started," said analyst Chris Pitcher at broker Redburn Partners.

The group has a bridging loan of $9.8 billion to repay within 6 months from a planned rights issue, a $7 billion loan to be repaid within 12 months from sell-offs and a 24-month $12 billion loan to be repaid with divestments and free cash flow.

InBev shares have fallen 45 percent since early September reflecting world stock markets and investor concerns over meeting these deadlines, although the new combined company should generate over $4 billion a year in free cash flow and is seen by some analysts as good long-term bet.

"It's a high risk strategy but if they get it ...More Info

Anheuser-Busch Cos, Inc. announced on November, 19 the intended withdrawal of its 6 ½% Debentures due January 1, 2028, and of its common stock from the New York Stock Exchange (NYSE) after its board of directors voted to authorize this action.

As a result of the merger, Anheuser-Busch has now become a wholly owned subsidiary of InBev, and its common stock is no longer traded on the NYSE. Consequently, there is no longer any public market in Anheuser-Busch common stock.

Each share of Anheuser-Busch’s common stock was cancelled, extinguished and automatically converted into the right to receive $70 in cash, without interest (except for shares for which appraisal rights have been perfected and not withdrawn).

Each option to acquire Anheuser-Busch common stock that was outstanding and unexercised immediately prior to the merger has been cancelled and converted into the right to receive $70 in cash, less the exercise price of such option.

As the recent statement by Beijing's antitrust regulator keeps the largest Chinese brands off-limits to Anheuser-Busch InBev, the newly created world’s top beer producer has to look to smaller firms for expansion, Forbes posted on November, 19.

According to analysts, leading Chinese brands' dominance remains strictly regional in a fragmented beer market, so the field of smaller brewers is ripe for the picking by the Western colossus.

China's antitrust regulator ruled that Anheuser-Busch InBev will not be allowed to increase its 27.0% stake in Tsingtao Brewery Co., the maker of Tsingtao Beer, or its 28.5% stake in Zhujiang Beer. It also cannot pursue a tie-up with leading labels Huarun Snow Beer and Beijing Yanjing Beer.

Beijing's decision means that Anheuser-Busch InBev will have to look outside China's Big Three (only Tsingtao, China Resources Breweries and Beijing Yanjing Brewery have more than a 10.0% market share) for further acquisitions.

Putting Beijing Yanjing off-limits is "probably one of the best measures" Beijing has taken to prevent a monopoly, said Alice Hui, a Hong Kong-based analyst for DBS Vickers. Beijing Yanjing is the only one of the three to remain independent of foreign partners: China Resources Breweries, which owns Huarun Snow Beer, has a tie-up with ...More Info

According to the latest forecast by Fitch Ratings, brewers who have taken on large amounts of debt during the recent wave of industry consolidation will now likely take more time to de-leverage than previously expected, Easy Bourse reported on November, 19.

While acquisition and capital expenditure should slow down, Heineken NV, InBev SA and Carlsberg Breweries A/S could find it more challenging than anticipated to reduce leverage during FY09 and FY10, as profits and cash flow generation will likely be less than originally projected, analysts maintain.

Beer consumption has historically tended to remain stable even in recessionary periods. Yet, current shifts in consumption patterns stemming from weaker consumer spending across the world are likely to constrain revenue and profit growth for major international brewers over the coming 12-18 months, notably against originally projected growth rates in the high single- to mid-double digits.

Notwithstanding prevailing trends, Fitch believes that consolidating players should weather the downturn effectively, not least due to their enhanced geographic diversification, balanced brand portfolios across premium and mainstream pricing points and prospective benefits from current reductions in market prices of raw materials.

Over FY09 major brewers should, at worse, report broadly stable levels of sales and EBITDA (excluding acquisitions). Also, the ...More Info

The invasion of Australia’s beer industry has only just begun and foreign brewing giants look to conquer one of the world’s most profitable markets, Reuters posted on November, 20.

The tumbling Australian dollar and some strategic blunders have already weakened the local industry's defences, analysts say, pointing to moves this week by U.S.-listed Molson Coors Brewing Co and Japan's Kirin Holdings Co Ltd.

"This is certainly not the end game," said Theo Maas, partner at Fortis Investment Partners.

"I certainly don't think the Australian beverage landscape is going to look the same in 12 months' time."

In the past two weeks, Molson revealed it had a 5 percent interest in Australia's largest brewer, Foster's Group, and Kirin's Australian affiliate, Lion Nathan, made a A$7.6 billion for Coca-Cola Amatil owned about 30 percent by U.S.-based Coca-Cola Co.

Australia's beer market has long operated as a duopoly between Foster's and Lion Nathan while Coca-Cola Amatil has dominated soft drinks. But this looks likely to change as Australia's small, high-margin market attracts foreign envy.

Japanese brewers seeking growth outside a shrinking home market are expected to be among those that reshape the sector, while international brewers Molson, SABMiller Plc and Heineken are also expected to be interested.

Coca-Cola Amatil has ...More Info

Romania’s beer market in the first nine months of 2008 rose by 8.9% against last year, Ziarul Financiar published on November, 21.

According to the National Statistics Institute of Romania, average beer sales grew by more than 5% due to good weather during the summer months.

Thus, brewers' nine-month sales topped 17 million hectolitres, while the volume surpassed 15.7 million hectolitres during the January-September period.

As it was reported, the market’s increased by 11.6% in May, 9.8% in June, and 18.3% in July (the highest growth rate the segment witnessed in 2008). August, however, saw a decline of 0.04% in the market’s growth compared with the same month in 2007. Still, brewers saw sales rebound in September and ended the third quarter with a 10.5% increase.

According to Alfa Cont data, ad investments by beer industry players were three times lower this September against the same period in 2007.

The nine-month performance strengthens the main players' estimates that pointed to an increase of between 6 and 8% for sold volumes, to over 20 million hectolitres and annual consumption per capita of 95 litres.

Though admitting Romania will not shun the effects of the international crisis, the main brewers say the market will continue to see annual ...More Info

The Canadian Malting Barley Technical Centre (CMBTC) released its Recommended Malting Barley Varieties List for 2009-10 in October.

Recommended Two-Row Barley Varieties:

AC Metcalfe

CDC Copeland

CDC Kendall

Newdale

(CDC Select, Bentley, CDC Meredith, CDC Reserve, CDC Landis, CDC Polarstar, Norman, Merit 16 and Merit 57 are not yet being grown for the commercial market. Production is limited to quantities required for testing and market development, CMBTC reported).

Recommended Six-Row Barley Varieties:

Legacy

Tradition

Lacey

(CDC Clyde, CDC Mayfair, CDC Kamsack and CDC Laurence are not yet being grown for the commercial market. Production is limited to quantities required for testing and market development.)

The recommendations are based on the varieties expected to be selected by Canada’s grain and malting companies for both domestic and export markets for the 2009 harvest.

"These recommendations were derived from information CMBTC members obtained through their sales and marketing efforts and contact with domestic and international maltsters and brewers, as well as from test malting and brewing results achieved at CMBTC in their Pilot Malthouse and Pilot Brewery," said CMBTC Managing Director Rob McCaig.

The position of each variety on the list takes into consideration the amount selected from the 2008 harvest and expected selection needs from the 2009 harvest.

The list clearly indicates the increasing acceptance ...More Info

EU’s feed barley market did not change over the last week due to the same high availability of cereals on the global scale, La Depeche published on November, 20.

The activity on the feed barley market is reduced to the minimum, and prices have fallen respectively, losing up to 6 euro per week.

Potential purchasers of malting barley are deliberately dragging out the business hoping for even lower prices, it is reported. As for crop 2008, maltsters have stocks to cover the next three – four months. Main interest is revealed for the barley of the end of the harvesting campaign, particularly for that harvested between July and September.

More customers are attracted by malting barley of the crop 2009. Traders, recently aside from the deals, are beginning to showcase their goods, it is reported.

Huseyin Erten, Hasan Tanguler and Hanife Cakiroz

Abstract

ABSTRACT J. Inst. Brew. 113(1), 75–79, 2007 The effect of pitching rate on fermentation and production of flavour compounds was studied in high gravity wort using a lager yeast. Fermentation performance was followed by monitoring the total sugar content and yeast growth. Volatile compounds were evaluated by analysing higher alcohols, esters and carbonyl compounds at the end of fermentation. Faster fermentation rates and higher yeast counts were observed with the higher pitching levels. Lower amounts of 2- and 3-methyl-1- butanols and higher levels of 2-methyl-1-propanol were found at the increased pitching rates. The concentration of isoamyl acetate was reduced with an increased pitching rate. Higher amounts of diacetyl and 2,3-pentanedione were obtained at the lower pitching levels. Key words: Fermentation, flavour compounds, high gravity brewing, pitching rate, Saccharomyces cerevisiae Load full article, 5 pages, 589Kb, PDF file