E-Malt.com Flash 05a. January 31

USA: Adolph Coors Company announced on February 1 that at a special meeting of its stockholders on Tuesday, all of the steps necessary to complete the Company's merger with Molson Inc. were approved. All of the Company's Class A Common shares are held by the Adolph Coors, Jr. Trust and were voted in favor of the merger proposals. The Company's Class B Common shares are publicly held, and over 34.7 million of the outstanding shares were voted, with 33.5 million shares (92.4% of outstanding shares) voted in favor of the merger proposals. Before adjourning the meeting, Peter Coors, Chairman of the Board, commented "This is a momentous time for our Company. We are very appreciative of the support shown by our shareholders for the joining together of two great beer companies and traditions -- Coors and Molson." He added "Coors and Molson were both founded by bold pioneers in their own time and our family looks at this merger as a pioneering step in its own right." "We are extremely pleased that Coors shareholders recognize the compelling strategic and economic benefits of this merger," said Leo Kiely, chief executive officer of Coors. "We now expect to complete the transaction on February 9th, allowing us to quickly begin executing on the comprehensive integration plans we have been preparing. We are thankful for the support we've received from our shareholders, employees and customers, and are energized and confident as we move to capitalize on the great potential of this combination." As previously announced, the final approval from the Quebec Superior Court will be sought on February 2, 2005. The closing of the merger is expected to occur on February 9, 2005 prior to the opening of the stock markets in Canada and the U.S. Additionally, earnings information for both companies will be released on February 9, 2005. Together, Molson Inc. and Adolph Coors Company will form the fifth largest brewer in the world, with combined volume of 51 million barrels and pro-forma net sales of US$6 billion. The brewer will have a market capitalization of US$6 billion and a position of strength to become a future consolidator in the global brewing industry. It will have leading market share in Canada and in the U.K., a growth market in the U.S., and an emerging market in Brazil as well as a portfolio of well established brands such as Molson Canadian, Coors Light and Carling and other brands including Keystone, Aspen Edge, Zima, as well as Molson Ultra, Export, Molson Dry, Rickard's and Kaiser. Founded by pioneering families who are still active in the business and have deep roots in their respective countries, Molson Coors Brewing Company will have over 350 combined years of brewing excellence, 15 breweries and nearly 15,000 employees. Founded in 1873, Adolph Coors Company is the world's eighth-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, 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: InBev announced on January 31 the closings of the amended transaction with SUN Trade (International) Ltd, whereby InBev purchased all of SUN Trade’s holding of voting and non-voting shares in SUN Interbrew Ltd., announced on Jan 10th...more info

Japan, Tokyo: Asahi Breweries Ltd. announced on February 2 that it will launch a beer-like alcoholic beverage subject on April 20 to lower liquor taxes for which retailers will be able to set lower prices, according to Kyodo News. Asahi Brewery will release Asahi Shin-Nama third-category beer, made of soy protein and containing no malt. The product's price is open, but is likely to be set around 120 yen per 350-ml can, about the same as the price of similar products offered by Sapporo and Suntory. Asahi aims for annual sales of 22 million cases of the new product by December 31, 2005. One case holds 12.66 liters, or the equivalent of 20 633-ml bottles. That would account for about 10% of Asahi's targeted beer sales this year. For 2005, Asahi is aiming for a 2.9% rise in overall beer sales to 210 million cases. Asahi's senior managing director Masaaki Okada said, "We hope to obtain the top market share" in the beer-taste beverage product segment, which is often dubbed the "third beer" market. Sapporo Breweries Ltd. and Suntory Ltd. have already launched similar products in the so-called "third category" of beer. Kirin Brewery Co. plans to follow the suit by April. Sapporo Breweries Ltd., of Sapporo Holdings Ltd. (2501.TO), has had huge success since its February 2004 introduction of "Draft One." The product doesn't contain malt or wheat, so it is categorized as neither a regular beer nor a " happoshu" beer, freeing it from Japan's high taxes on beer. While Draft One carries a tax levy of Y24.20 per 350-milliliter can, a low- malt "happoshu" brew, which is already cheaper than regular beer, shoulders a much bigger liquor tax of Y46.99. Sales of "third beer" products, currently brewed by Sapporo and unlisted Suntory Ltd. (SNT.YY), made up about 5% of the entire beer market in 2004. With Asahi and Kirin Brewery Co. (2503.TO) set to join the fray this year, beer company officials expect that ratio to reach 10% or more for 2005. Suntory, which bottles and distributes PepsiCo Inc.'s (PEP) products in Japan, aims to boost its "Super Blue" sales to 10 million cases for 2005. Intensifying competition among major Japanese breweries may fuel discussion about the government's considering to overhaul the liquor tax system to raise the tax on the third-category beer. Prices of third-category beer products can be cheaper than conventional beer and "happoshu" low-malt beer products due to lower liquor taxes as they contain no malt. The taxes on such products are at least 50 yen lower than those on conventional beer products and 20 yen lower than on happoshu products per 350 milliliters.

Philippines, Manila: Philippine brewers raised prices of beer on February 2 by 14%, or as much as PHP2 a bottle to recoup additional production costs and to cover an increase in taxes, according to Dow Jones...more info

Hong Kong: Heineken NV bought 100,000 shares at 2.80-2.85 hkd each in Kingway Brewery Holdings Ltd, the Securities and Futures Commission (SFC) said on January 31...more info

Bulgaria: The annual beer consumption in Bulgaria has reached 61 litres per capita last year, versus 55 litres in 2003, local press announced on February 1. The total amount of beer consumed in Bulgaria was 473 million litres in 2004 compared to 294 million litres in 1997 and 425 million litres in 2003. Beer drinking is expected to see further boosting in the upcoming years, according to experts. Investments into the business have increased about 15 times over the last decade.

Malt News

Malt Market December-January: Malt business in December/January was very limited, analysts commented on January 28. Belgium and Holland purchased...more info

Russia embargoes imports of plant products (including barley and malt) from Denmark, Estonia, Germany and the Netherlands. Russia does not recognize Phytosanitary Certificates from these countries. One Russian request is to introduce a common EU certificate. Negotiations on EU and national levels to lift the ban promise partial results, but at the same time other countries namely: Belgium, Lithuania, Poland received warnings that they may be embargoed as well.

Barley News

Canada: For 2005-2005 Canada barley production is estimated by Statistics Canada to increase by 7% due to higher yields, despite lower seeded area, Agriculture and Agri-Food Canada (AAFC) posted on January 14...more info

The EU malting industry seems to be covered quite well, market analysts commented on January 28. There remain ample stocks of spring and winter barley in France...more info

World barley production in 2005-2006 is expected to decrease to 145 million tonnes from 151 million tonnes in 2004-2005, as lower production in Europe and North America more than offsets higher production in Australia, according to Agriculture and Agri-Food Canada (AAFC) comment from January 14. After two consecutive years of good harvesting, barley production in North Africa is expected to decrease. World barley supplies are projected to remain virtually unchanged from 2004-2005 at 172 million tonnes, as larger carry-in stocks offset lower production. However, world trade is forecast to decrease slightly due mainly to reduced exportable supplies in Europe. Strong import demand for feed barley in the Middle East and North Africa and higher import demand for malting barley in China and, to a lesser degree, in the US are expected to drive world barley prices up. Government water conservative programs in Saudi Arabia are expected to reduce irrigation of locally grown forage crops. This could have the potential of raising Saudi’s barley imports further. World carry-out stocks are expected to drop by 1 million tonnes from 2004-2005.

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 2005 are available on site www.e-malt.com/MarketPrices

Malting barley prices. French barley prices.

Nominal prices.

nq - Not quoted
Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

Table of the week

European barley crop estimate. Production forecast in thousand tonnes.

Barley production in '000 tonnes		Spring barley		Total barley
Barley production in '000 tonnes		2003	2004	2003	2004
EU-15	Austria	538	540	869	982
	Denmark	3,010	2,887	3,777	3,634
	Finland	1,671	1,748	1,671	1,748
	France	3,973	3,691	9,818	10,944
	Germany	3,606	3,372	10,601	12,963
	Ireland	1,000	1,104	1,096	1,274
	Belgium/Lux.	31	35	335	355
	Netherlands	351	262	372	281
	Spain	6,607	7,940	8,699	10,582
	Sweden	1,517	1,638	1,547	1,699
	UK	3,517	2,916	6,370	5,938
	Italy			1,032	1,148
	Greece			310	310
	Portugal			10	16
TOTAL EU-15		25,821	26,133	46,507	51,874
EU-10	Czech Republic	1,763	1,814	2,068	2,401
	Hungary	380	600	825	1,472
	Poland	2,603	2,852	2,833	3,500
	Slovakia	682	778	832	984
	Cyprus			79	92
	Estonia	263	265	269	282
	Latvia		224	221	269
	Lithuania		863	756	863
	Slovenia			28	29
	Malta			3	3
TOTAL EU-10		5,691	7,396	7,914	9,895
TOTAL EU-25		31,512	33,529	54,421	61,769
Europe Non-EU	Romania	340	350	540	839
	Bulgaria	180	82	580	876
	Serbia			230	279
	Croatia			85	149
	Bosnia			60	53
	Macedonia			120	149
	Albania			30	30
TOTAL Europe Non-EU		520	432	1,645	2,375
TOTAL EUROPE 31		32,032	33,961	56,066	64,144

Source: Coceral, Brussels December 2004

Graph of the week

Globally Beer Leading Companies By Sales Volumes

Agenda

February 2005:
Pianeta Birra - Beverage & Co. International Show of Beers, Beverages etc., Italy;
Seminaire orge de brasserie à Paris-Bagnolet;
Liqma International Beverage Industry Exhibition, Spain;
Canadian Food and Beverage Show;
GrainWorld 2005. Canada. CWB.;

March 2005:
Night of Great thirst, Belgium;
Zythos Beer Festival, Belgium;
Institute and Guild of Brewing Africa Section 10th Convention, South Africa;
International Food and Drink (IFE), UK;
Deltabierfestival, The Netherlands;
Spring Beer Festival "Hops on Equinox", Seattle;
Brew and Beverage Industry - Beer Auction International Trade Fair, Russia;
FOODEX JAPAN 2005 / INTERNATIONAL FOOD & BEVERAGE EXH;
China Drinktec China International Exhibition on Beverage, Brewery and Wine Technology;

April 2005:
Helsinki Beer Festival;
Concise Course in Brewing Technology;
World Barley, Malt & Beer Conference 2005;
BEER. Exhibition Pavilion Minsk.;
Craft Brewers Conference & BrewExpo America;
Classic City Brewfest, Athens, GA;
Excursion to West-Flanders;

More events are available on site e-malt.com