World’s No. 1 brewer Anheuser-Busch InBev announced on February, 26 that it has obtained 17.2 billion USD in long-term bank financing enabling it to fully refinance its original 54 billion USD senior acquisition facilities.

The new financing consists of a 13 billion USD facility agreement that provides for an 8 billion USD 5-year revolving credit facility and a 5 billion USD 3-year term facility. In addition, the Belgium-based brewer has obtained 4.2 billion USD in long term bilateral facilities.

Felipe Dutra, CFO of Anheuser-Busch InBev, said "We are pleased to have completed the refinancing of our original acquisition facility less than 16 months after the closing of the acquisition of Anheuser-Busch. The new credit facilities allow the Company to further extend its debt maturities while building additional liquidity, thus enhancing its credit profile as evidenced by the improved terms under the facilities, which do not include financial covenants. In addition, we are also honored to have the renewed support of our close relationship banks and will continue our journey towards the below 2.0x net debt to EBITDA leverage target which remains an ongoing top priority for our Company."

As a direct consequence of these transactions, finance costs in 1Q10 and 2Q10 will include ...More Info

SABMiller Plc, the world’s second-largest brewer, and Diageo-owned East African Breweries Ltd. have finally settled their African dispute, Bloomberg reported on February, 25.

The companies agreed that Tanzania Breweries Ltd. “will cease to brew and distribute EABL’s brands in Tanzania”, whereas East African Breweries will continue to brew and distribute SABMiller brands in Kenya.

SABMiller and Diageo also agreed to withdraw all claims and counter claims in arbitration in London and “not to pursue any further actions in respect of the matters”, the companies said in separate press releases.

A dispute between Diageo and SABMiller arose in July after East African Breweries gave notice to end a brewing and distribution contract with its Tanzania Breweries, its local unit and acquire control of Serengeti Breweries Ltd., the second biggest beer-maker in the east African nation.

Diageo has a 50.03 percent stake in East African Breweries Ltd., while SABMiller holds 52.83 percent of Tanzania Breweries. East African Breweries also owns 20 percent of the SABMiller unit.

Danish brewer Royal Unibrew announced on February, 24 has finalised the sale of its shares in the breweries on Antigua, Dominica and St. Vincent to Cerveceria Nacional Dominicana (CND).

As previously announced, this transaction reduces Royal Unibrew’s interest‐bearing debt by just below DKK200 million, and the net selling price of the shares is at the level of their carrying amount.

The sale will reduce Royal Unibrew’s revenue by approximately DKK150 million and its EBITDA by about DKK30 million on a yearly basis. In 2010, the reduction of revenue is expected to amount to approximately DKK130 million, while EBITDA is estimated to be reduced by DKK25 million.

Royal Unibrew announced the conditional agreement with the Cerveceria Nacional Dominicana (CND) brewery in the Dominican Republic to sell its shares of the breweries in Dominica, St. Vincent and Antigua to CND in August 2009.

Sales of Finnish beer totalled 419 million litres in 2009, up by 0.4% versus 2008, the Finnish Federation of the Brewing and Soft Drinks Industry reported on February, 25.

Most beer was sold through grocery stores. On-trade sales fell and accounted for about 16 per cent of total sales.

2.4 per cent of all beer sales were made through Alko, the state-owned retail sales network.

Finland’s beer tax is the highest in the European Union and almost five times that of Estonia’s.

“Alcohol taxation has been increased three times in just over a year. At the same time, the total consumption of alcohol fell by a meagre two per cent in 2009. The most significant consequence of the tax increases can be seen in the dramatic rise in travellers’ private imports of alcoholic beverages – a total of over 20 per cent for all beverage categories combined. Travellers’ imports already substantially exceed on-trade sales for the whole of Finland. If the situation escalates, imports could impact on employment; but above all, the State is losing an estimated EUR 200-250 million in tax revenue per year. The majority of imported alcoholic beverages are purchased either on ships or in Estonia,” says Tero Kallio, Managing ...More Info

East African Breweries aims to acquire a stake in Tanzanian brewer Serengeti Breweries this year after settling a dispute with rival SABMiller over the east African nation's beer market, Reuters reported on February, 26.

"The acquisition of this interest is subject to certain conditions, including regulatory and EABL shareholder consent, and is expected to complete during 2010," EABL's government affairs director, Brenda Mbathi, said.

The Kenyan brewer, majority-owned by Britain's Diageo, sparked a row with SABMiller last year when it sought to buy a stake in Serengeti and end a manufacturing and distribution agreement with Tanzania Breweries Limited, a SABMiller subsidiary in which EABL holds a stake.

The move to buy the stake in Serengeti Breweries was blocked after SABMiller was granted an injunction in the London High Court, but EABL said this week it had now reached a settlement of the dispute.

SABMiller owns 52.8 percent of Tanzania Breweries, while EABL holds 20 percent and the rest is held by Tanzanian pension funds and the public through the Dar es Salaam Stock Exchange. Serengeti Breweries Limited is owned by a group of private investors.

"In the last five years SBL has grown its own brands by 10 percent, an indication of the growth opportunities ...More Info

The barley markets continue to move sidewise, waiting for positive news. But unless we have a major weather scare in a large area this growing season, the wait for that market raising news could be a long one, Larry Raap, grain merchandiser for Sun Prairie Grain in Minot, was quoted as saying by Farm & Ranch Guide on February, 25.

“On the malting side, everybody is still full of barley and it's hard to get a malting bid for open market barley,” he said. “And in the last few weeks the feed barley prices have followed corn down. There for a while feed barley had gotten up to around $2.50 a bushel, but it's now around $2.10 to $2.20 a bushel due to the weakness in the corn market. Feed barley prices usually follow corn prices fairly close.

“I'm sounding like a pessimist right now, but today I just don't see anything that's going to get things revved up too much,” he continued. “Even if we have a weather scare this summer it's going to have to affect a large area before it gives any support to prices. I really don't see things getting much better at all this year.”

Raap also noted ...More Info

This week has seen quite a number of deals on malting barley in the EU, La Depeche reported on February, 26.

The activity included mostly barley crop 2010, market sources said. Prices remain stable, as the markets are closely watching the progress in planting.

In Germany, the barley-planted area is expected to decline by 5% in 2010/11, sources said.

The American Malting Barley Association, Inc. (AMBA) announced last month its recommended malting barley varieties for planting in 2010.

Six-row malting barley varieties recommended for planting this year are: Drummond, Lacey, Legacy, Rasmusson, Robust, Stellar-ND, Tradition.

Recommended two-row malting barley varieties list includes AC Metcalfe, CDC Copeland, Charles (winter), Conlon, Harrington, Hockett, Merit, Merit 57, Moravian 37, Moravian 69, and Scarlett.

Hockett, Merit 57, Moravian 37, and Moravian 69 have been added to the list for the first time. The two-row variety Craft recommended last year has been dropped in 2010.

Growers are encouraged to contact their local elevator, grain handler or processor to gauge market demand for any variety grown in their region prior to seeding, AMBA recommended.

Anthony J. Cutaia, Anna-Jean Reid and R. Alex Speers

J. Inst. Brew. 115(4), 292–295, 2009 ABSTRACT
J. Inst. Brew. 115(4), 318–327, 2009 The historical development of equations used to relate alcohol and real extract to apparent extract and original gravity, as well as ratios between the corrected Real (RDF) and Apparent Degrees of Fermentation (ADF), were examined in light of modern polynomial and non-linear regression techniques. Comparisons were performed using an extensive data set of 532 brews obtained from commercial and pilot fermentations with statistical error analysis of these empirical relationships. New predictions of apparent extract were calculated as a function of alcohol and real extract analogous to the Improved Tabarie’s formula. In addition, attempts at improving Balling’s original equation model estimating original gravity from alcohol and real extract are detailed and discussed. The statistical analyses of relationships between Aw/w (alcohol by weight) and functions of OE (Original Extract), AE (Apparent Extract) and RE (Real Extract) as well as ratios between the corrected Real and Apparent Degrees of Fermentation (RDF/ADF) are reported. It is expected that this paper will be useful for brewers to more accurately estimate Aw/w and real extract values. Key words: ADF, alcohol, apparent extract, brewing calculations, original extract, RDF, real extract.
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