China Resources Snow Breweries Limited, a subsidiary of China Resources Enterprise, Limited and a joint venture with SABMiller plc, announced on February, 26 that it has agreed to acquire three breweries in each of Anhui, Liaoning and Zhejiang Provinces in three separate transactions.

According to the company statement, the total investment cost for the three acquisitions is about RMB749 million, which includes a cash consideration of about RMB633 million.

CR Snow has agreed to acquire the respective brewing assets in Anqing Tianzhu Beer Company Limited (Tianzhu Beer), Liaoning Songlin Brewery Group Company Limited (Songlin Brewery), and Zhejiang Luck Beer Company Limited (Luck Beer) through three newly-formed subsidiaries in which it will own 80%, 85% and 100% equity interests respectively.

All three breweries will undergo technology upgrade to their existing facilities in order to align with the production requirements for “SNOW”. Upon conclusion, they will add a total of about 468,000 kiloliters to CR Snow’s existing production capacity of about 11.7 million kiloliters, China’s leading brewer said.

Tianzhu Beer is situated at Anqing, a historic city at the south-western region of Anhui Province. It has an annual production capacity of about 98,000 kiloliters and a sales volume of about 40,000 kiloliters in 2007. At present, ...More Info

Fomento Económico Mexicano, S.A.B. de C.V. (“Femsa”) announced on February, 26 its operational and financial results for the fourth quarter and full year 2008.

Highlights

The company’s brewing business, Femsa Cerveza achieved an 8.6% increase of total revenues in the fourth quarter of 2008. In an environment of healthy pricing and lapping solid 6.0% volume growth in Q4 2007, sales volume decreased 0.7% in Mexico. In Brazil, volumes declined 3.5% having grown 9.3% in 4Q07, and as a result of unfavourable weather conditions.

Export sales volume grew a robust 12.3%, despite the decline in the overall US import category. Continued raw material pressures and sustained marketing investments behind the brands across Femsa Cerveza’s operations resulted in a 9.3% decrease in income from operations.

In full 2008, Femsa Cerveza’s total revenues increased 7.1%, mainly as a result of increases in average price per hectolitre across its main operations in local currencies. Income from operations decreased 1.9%, reflecting continued pressure on raw materials and sustained investment in the company’s brands.

Femsa Cerveza’s Q4 2008 and full year 2008 results

Mexico sales volume decreased 0.7% to 7.118 million hectolitres in Q4 2008 compared with Q4 2007. This decrease reflects an increasingly cautious consumer as well as price ...More Info

The Finnish Federation of the Brewing and Soft Drinks Industry reported on February, 26 the domestic beer sales of 2008.

Beer sales fell by a total of 2.1% last year. A total of 2.5 per cent less beer, cider, long drinks, mineral waters and soft drinks were consumed than in the previous year, the Federation said.

“The increase in alcohol taxation and the worsening economic climate have impacted on beverage sales,” says Timo Jaatinen, Managing Director of the Federation of the Brewing and Soft Drinks Industry. Taxation on brewery beverages was increased by ten per cent at the beginning of 2008 and by another ten per cent at the beginning of this year. In connection with its mid-term review, the government has once again decided to propose new alcohol tax hikes.

“Finland’s beer tax is already the highest in the European Union and almost five times as high as in Estonia. The new alcohol tax hikes that were announced would make the tax differences between the countries intolerable. The devaluation of the Estonian kroon also poses a threat. These factors significantly heighten the risk of an explosion in private imports by travellers. Travel to Estonia hit a record peak last year and is ...More Info

Anheuser-Busch InBev is considering selling its Czech Staropramen brewery, the Hospodarske Noviny newspaper cited unnamed sources on February, 26.

The report of a possible sale comes as the world's largest brewer looks for ways to raise cash to refinance a $52 billion acquisition of U.S. rival Anheuser-Busch and needs to find billions of euros from divestments by late 2009. The company, however, declined to specify assets that it aims to sell, the paper said.

Several sources in the industry said potential bidders were probing the market to find out how much the Czech beer producer was worth, the paper reported, adding the estimated value was around 6 billion crowns ($268 million).

According to analysts, Heineken NV, the biggest Dutch beermaker, may bid for Anheuser-Busch InBev NV’s Czech brewery to add market share in central Europe.

“Heineken would definitely be the company that would most benefit” from acquiring Staropramen from AB InBev, the world’s largest brewer, said Trevor Stirling, an analyst at Sanford C. Bernstein in London. “An industry player would create synergies and would therefore have a big advantage over investment funds.”

Acquiring Staropramen would make Heineken the second-biggest brewer in the Czech Republic after SABMiller Plc, which controls half of the country’s market, ...More Info

Cia. de Bebidas das Americas (AmBev) will shut a plant in Sao Paulo and cut 146 jobs as part of a cost- reduction plan, Bloomberg cited a report by O Estado de S. Paulo on February, 27.

AmBev stepped up cost-cutting measures last month after a tax on some of its brands rose to 15 percent, the newspaper said without giving the source of the information.

Output from the plant in Mogi Mirim, which produces 40 million litres (11 million gallons) of beer a year, is likely to be absorbed by other units in Sao Paulo state, it is assumed. About 20 workers were transferred to other sites, the paper said.

An outside press company representing AmBev wasn’t immediately available for comment.

United Breweries Limited (UBL)’s net sales in Q3’09 grew substantially by 24% y-o-y to Rs3.7 billion, The Wall Street Journal reported on February, 26.

The company’s EBITDA margin advanced 200 bps y-o-y to 9.4% in the quarter, from 7.4% for the same period in FY08, on the back of a 243-bps y-o-y fall in the advertisement and sales promotion costs (as a percentage of sales).

UBL has a highly leveraged capital structure with a debt-to-EBITDA ratio of around 4x, largely attributed to its expansion activities and acquisitions in the recent times. The Company has raised Rs4.25 billion through a rights issue; however, analysts expect this money to largely meet the CAPEX requirements for FY09 and FY10.

Subsequently, analysts expect UBL’s financial leverage to remain at least 3x for FY09E. As a result, it will continue to bear a substantial interest burden, which will drag its net margins.

The company’s EBITDA margin is expected to improve by ~80 bps in FY10 to 11.3% as raw material prices have fallen recently. Moreover, the company should benefit from economies of scale and better realizations on the back of strong brand equity, experts forecast.

Indiabulls Securities said it maintains a SELL rating on United Breweries’ stock.

The European market of feed barley is very calm, La Depeche communicated on February, 27. Animal feed producers make purchases but are interested only in deliveries in March and very low prices.

As for exports, French barley competes with that of Black Sea origin. The prices are moving downwards for several consecutive weeks following the example of other grains. Iran remains the main purchaser of barley.

The market of malting barley is, like others, demonstrating a downward tendency. The situation is aggravated by numerous cases of European brewers cancelling contracts for the old crop. Nevertheless, the market has registered several deals on the new barley crop.

The forthcoming crop year will be more favourable for the export of Russian barley as grain prices are heading upward on the international market, Arkady Zlochevsky, the president of the Russian Grain Union, was quoted as saying by Zerno Online on February, 26.

“In spite of the current situation and unfavourable forecasts of many experts believing the forthcoming season will bring a weaker market, we, the Russian Grain Union and I personally, expect a stronger conjuncture in the coming crop year,” he said.

Zlochevsky explained his forecast was based on fundamental causes. “Areas planted to the new crop are being reduced in all countries except Russia, and we expect a significant drop in crop capacity due to the world economic crisis. Farmers all over the world will apply less fertilizers, plant seeds of a lower quality and buy less farm machinery.”

According to Zlochevsky, all the above mentioned factors will lead to a decrease in the world’s gross grain production and grain stocks, and, consequently, to an increase of grain prices in the next season.

However, this process will not begin earlier than the autumn of 2009, he specified.

The expert also said the export of Russian barley will grow this year due to the ...More Info

US barley growers should not worry that their business will be hurt by the recent consolidation in the nation’s brewing industry, The Farm & Ranch Guide announced on February, 25.

The fact is, U.S. beer production has increased in the last three years, just as the use of malting barley by brewers has increased.

The use of malt by U.S. brewers slowly declined over the last 20 years, reaching a low of just over 128 million bushels in 2005, according to the Alcohol and Tobacco Tax and Trade Bureau.

The increasing production of low calorie beers was largely responsible for this decline. But the good news is that the amount of malting barley used for brewing began to increase in 2006 and 2007, and the trend appears to have continued in 2008.

Domestic brewers have continued to rely on U.S. barley producers despite a dramatic decline in barley acres, it is reported.

“U.S. acreage has declined over 50 percent in the last 20 years, but the industry continues to source the vast majority of its malting barley needs from U.S. growers” says Scott Heisel of the American Malting Barley Association.

As acreage declined, a higher and higher percentage of the U.S. crop was used for malting ...More Info

Craig B. Heisner1 and Charles W. Bamforth

Abstract:
J. Inst. Brew. 114(2), 122–126, 2008 There is not a strong correlation between the amount of thioredoxin in barley and the total protein content of the grain. The level of detectable thioredoxin decreases during germination, whereas the amount of limit dextrinase increases, for the most part in a bound form. Under no circumstances could a release of limit dextrinase in an active form be demonstrated through the agency of the thioredoxin system. By contrast the thiol agent dithiothreitol, especially in the presence of calcium, did promote the activation of limit dextrinase. Of most pronounced effect, however, was the lowering of pH. Three-fold higher limit dextrinase activity was achieved when the pH was lowered to 4.0 Key words: Barley, limit dextrinase, pH, thioredoxin. Load full article, 5 pages, 562 Kb, PDF file