Tsingtao Brewery shares received a SELL rating and a12-month target price HK$20.00, implying 18.7% downside potential, stockstar.com reported on July, 2.

According to industry observers, the Tsingtao stock deserves a premium to the shares of other China brewers, the current positive factors affecting the stock (Tsingtao’s integration of its breweries, continuing margin expansion and low double-digit EPS growth) have been already priced in.

The prevailing market consensus view is that decreases in raw material prices will lead to 114bp and 19bp EBIT margin expansion in 2009 and 2010 for Tsingtao. Some analysts, however, expect the company to see 270bp and 150bp EBIT margin expansion in 2009 and 2010.

China beer consumption CAGR (Compound Annual Growth Rate) is forecast to decelerate to 5% in 2009-12, versus 9.8% in 1991-2008. Beer consumption is not immune to economic forces, as evidenced in the current China economic slowdown; demand is still growing, but at a slower rate than previously, experts comment.

Therefore, China beer consumption is expected to grow at a CAGR of 5% from 2009-12, as he average selling price (ASP) for the blended beer is forecast to increase 1.5%, owing to: 1) favourable product mix changes; 2) rising disposable income and health consciousness; and 3) low ...More Info

Anheuser-Busch InBev NV’s controlling Belgian and Brazilian shareholders are able to reduce their stake in the brewer to 30 percent from 46 percent under an amended shareholders’ agreement, FEM Business cited unnamed sources on July, 2.

The agreement was amended in November, when the company sold shares to pay for the acquisition of Anheuser-Busch Cos., the Dutch business weekly said in an article on its Web site.

The Belgian and Brazilian investors are now required to hold a minimum 15 percent stake each, the magazine said, adding that this would allow them to sell stock worth 6.7 billion euros ($9.4 billion) at the current share price. The Brazilians sold shares worth more than 250 million euros last month, FEM said, citing a filing with Belgian market regulator CBFA.

AB InBev spokeswoman Marianne Amssoms told the magazine that the majority shareholders have committed to retain control of the company for now. Under Belgian law, this is ensured with a 30 percent stake, FEM cited Amssoms as saying.

Bavaria NV, the second-largest Dutch brewer, should be able to keep the trademark to its brand name in an eight-year-old legal battle started by German beer makers, Bloomberg cited the European Union’s highest court on July, 2.

The European Court of Justice in Luxembourg decided that brewers from the German area of Bavaria can’t use EU rules protecting regional food names to challenge the Dutch brewers’ use of the Bavaria brand name, which dates back to 1925.

The case is one of a growing number of battles over so- called geographical indications that protect the branding of food and drink products from a particular region. The court last year said only Italians can use the name Parmesan for their versions of the popular pasta topping, rejecting a challenge from German cheese makers.

“We are not free-riding on the German brewers’ reputation and we have never in any way pretended to be German,” said Gerard van der Wal, a lawyer for the Dutch beer maker. “We always said that we are a typical Dutch brewer.”

The German brewers said the case was a victory for their side as the court also upheld their geographic rights to “Bayerisches Bier,” Bavarian Beer in German, in ...More Info

Over the first five months of the current year Russia’s retail beer sales have shrunken by 6.5%, BMF.ru reported on July, 3.

In January – May 2008, total retail beer sales amounted to 46.12 mln hl. Over the same period this year, retail sales of beer dropped by about 3 hl.

Russia’s beer production fell by 10.7% in May 2009 and by 7.4% yoy in January-May.

According to Vadim Drobiz, head of the Center of researches for federal and the regional markets of alcohol Cifra, legislative initiatives of the Russian government will by the main factor affecting the nation’s beer industry this year. “It is more than likely that beer will be equated with alcoholic beverages. At best, all advertising of beer will be banned,” Mr. Drobiz forecasted.

The main international players in the brewing industry have already begun to shift their focus to other markets and announced plans to cut investments in Russian subsidiaries.

Dutch Heineken NV said it would stop trucking some regional beer brands across Russia. SUN InBev, the Russian subsidiary of Belgium-based AB InBev, has embarked on a cost optimization program. Turkish brewer Efes has halved investments in its Russian business in 2009 as compared to last year. And, ...More Info

Global alcoholic drinks group and the owner of Guinness, Diageo plc has identified on July, 1 further restructuring opportunities which are expected to give rise to cost savings of approximately £40 million per annum in the year ending 30 June 2012.

In addition the cost of production of maturing stocks will be reduced by about £10 million per annum in the year ending 30 June 2011. This will initially be reflected in the value of inventory and will not be reflected in reduced cost of goods sold until future years. Related restructuring costs of approximately £120 million will be taken as an exceptional charge in the year ending 30 June 2010. The cash cost of this exceptional charge is estimated to be £90 million which will largely be incurred in the year ending 30 June 2010, Diageo said.

As part of these restructuring projects, changes to supply operations in Scotland have been announced on the 1th of July including: • The consolidation of packaging operations from three sites, at Kilmarnock, Glasgow and Fife, to two sites and the closure of the packaging plant at Kilmarnock. • The closure of the Port Dundas distillery and the adjacent cooperage. • The outsourcing of certain warehousing operations.

In ...More Info

A hot spell over the past weeks has raised concerns about potential crop damage in Western Europe but analysts said most barley fields had already passed the critical stages, Reuters reported on July, 2.

Overall estimates for the European Union's crops could even be revised upwards after widespread rain in Germany and drought-hit Eastern Europe benefited plantings.

In France, by far the largest European grain producer which saw exceptionally hot weather over the past week, the barley harvest was in full swing with encouraging results, it is reported.

In Germany, the winter barley crop was seen rising to 9.64 million tonnes, up from 9.36 million tonnes in 2008 after plantings were increased and up 120,000 tonnes from the May forecast.

In Britain, sunshine and low disease levels have been beneficial, analyst Susan Twining of crop consultants ADAS.

The potential for Britain's winter barley has been limited by lower than ideal tiller numbers but crops are generally looking good with low disease levels, analyst Susan Twining of crop consultants ADAS said.

With some 10 percent of the barley harvest over in Spain and, farmers expect poor crops after planting and fertilising less and being hit by bad weather.

Farmers and merchants say scant rainfall in the past two ...More Info

While the outlook for malting barley through the remainder of this year is ‘difficult’, things are set to change in 2010, Farmers Guardian posted on July, 2.

"The coming together of the world recession and the oversupply from 2008 - one of the world’s biggest and best quality malting barley crops - is putting huge pressure on logistic and price prospects for this coming season," said Gleadell Agriculture sales director Stuart Shand.

"Beer and spirit sales in large areas of the world are dramatically down, consumers are drinking less, companies are reducing stocks, and brewers and maltsters have consequently withdrawn from the market.

“Maltsters' harvest intake bins are full of malt and old crop barley, and they also have a significant amount of malting barley bought from the 2009 crop. All of this means that selling opportunities for the rest of 2009 are going to be difficult to come by.

"However, 2010 is a different story. The log jam over maltster stocks should have eased, and this year’s potentially smaller EU crop - coupled with a recovering demand for beer sales - should lead to an increase in malting barley demand.

This scenario is reflected in the fact that there is already good demand ...More Info

So far the reports concerning calibration and protein content of France’s new winter barley crop have been very positive, La Depeche communicated on July, 3.

As stated by industry sources, the protein content is at 10.5-11% for the varieties Esterel, Azurel, and Arturio grown in Bourgogne and Charente. The quality, mostly good, is nevertheless heterogeneous in certain regions.

The good news from farms encouraged a number of deals in winter barley but there is less information on the quality of new crop’s spring barley, so market operators are taking their time.

Announced yields make it possible to forecast a further drop in prices. Maltsters are now interested in crop 2010 (January).

Mandeep Kaur, Evan Evans, Doug Stewart, Megan Sheehy, Alex Speers, Joseph Lake, and John Bowman

Abstract:
Paper presented at the ASBC Convention, Tucson, June 2009. Premature yeast flocculation (PYF) is an intermittent brewing fermentation problem that results in incomplete wort fermentation, and is a significant problem for some breweries. When PYF occurs it can cause significant losses in out of specification beer (incompletely fermented beer) to the brewer. The occurrence of PYF appears to be related to certain malt batches, however detection of these problem batches by way of a fermentation test is problematic and time consuming. Previous research investigations have been directed at identifying the causal wort PYF active components of PYF. These approaches have not been particularly successful over the past 40+ years. Consequently we have approached the problem from a different perspective. That was to use molecular finger printing of malt microbes as a step to identify the microbial taxa that cause PYF by comparing PYF +ve/-ve malts using terminal restriction fragment length polymorphism (TRFLP). TRFLP is a rapid, sensitive, sequence–based technique for microbial diversity assessment based on the conserved small subunit rRNA genes allowing comparison of the composition of microbial populations. We have made a significant breakthrough with the TRFLP approach and concept. Very striking differences in the microbial DNA finger-print patterns, particularly for the fungal PCR primers, between PYF +ve/-ve malts are obvious by using the TRFLP technique. Various microbial taxa, particularly some fungal members, are strongly associated with the PYF +ve malt determinations made with conventional fermentation tests. We are currently screening further confirmed PYF +ve/–ve batches of malt to validate our discovery. Load full article, 18 pages, 807 Kb, PDF file