E-Malt.com Flash 08a. February 21

USA: America's craft brewers sold 7.0 % more beer in 2004 versus 2003 making craft beer the fastest growing segment of the US beverage alcohol industry, according the statement from February 22 of the Brewers Association, the Boulder, CO-based trade association for US craft brewers. "Craft beer volume growth outpaced that of imports, large brewers, wine and spirits in 2004," said Paul Gatza, Director of the Brewers Association. The Brewers Association estimates 2004 sales by craft brewers at 7,023,651 (31-gallon) barrels up from 6,563,461 barrels in 2003, an increase of 460,190 barrels or 6.34 million case-equivalents. Spirits volume increased at 3.1 % for the year and wine volume was up 2.7 %. The import and mass-market segments of the beer industry rose approximately 1.4 % and 0.5 % in volume respectively in 2004. The craft beer segment includes more than 1400 breweries who produce primarily all-malt beers. It includes brewpubs (brewery/restaurant), microbreweries (less than 15,000 barrels per year) and specialty brewers. The association has tabulated industry growth data for these breweries annually since 1985. "The craft beer segment continues to show healthy and steady growth with many individual brewers enjoying double-digit volume increases," said Charlie Papazian, President of the Brewers Association. "This year the craft segment sold more new barrels of beer than the much larger import segment of the beer market." According to US Department of Commerce figures, sales of imported beer in the US increased by just 1.4% or 4.6 million cases in 2004. Even though craft beer accounts for just 3.2 percent of the beer marketplace versus more than 11 percent share for imports, craft beer sales in 2004 increased by 6.34 million cases-1.78 million more new cases compared to imports. "Craft beer sales increased faster than imports for the second year in a row," said Gatza. "This reverses the trend seen between 1996 and 2002 when import volume grew at a faster rate." "Americans increasingly prefer the flavor and diversity of fresh, locally-made beers," says Papazian. "Many Americans first discovered full-flavored beers at local breweries and now the diverse and exciting choices among those flavorful brews have become a regular part of their lifestyle."

Denmark: Danish brewing giant, Carlsberg A/S, gave an uninspiring 2005 outlook after posting an expected drop in full-year earnings, hit by increased branding costs and trouble in a number of European markets. Carlsberg expects 2005 net profits to rise around 15 %, according to new International Financial Reporting Standards (IFRS). In 2004, Carlsberg achieved substantial growth in beverage sales. Total beer volumes grew by more than 10m hl to 92.0m hl, and net revenue totalled approx. DKK 36bn. Last year net revenue totalled DKK 36.0 billion, corresponding to an increase of 4%. At local exchange rates, revenue rose by 5%. Operating profit amounted to DKK 3,442m (-3%). Carlsberg A/S’ share of profit before goodwill amortisation and write-downs was DKK 1,425m compared to DKK 1,179m in 2003, corresponding to a substantial rise of 21%. Net interest-bearing debt was reduced to DKK 21.7bn, having briefly peaked at approx. DKK 33bn earlier in the year. It is proposed that a dividend of DKK 5.00 per share be paid (as in 2003). Carlsberg A/S’ share of profit is expected to increase by approx. 15% in 2005 (on comparable basis in accordance with International Financial Reporting Standards, IFRS). In 2004, Carlsberg strengthened and defended its position as one of the world's leading breweries and also took a number of important steps in the implementation of the Group's strategy. By taking over Orkla ASA’s minority stake in Carlsberg Breweries and by acquiring the German Holsten-Brauerei AG, Carlsberg created a significant basis for future growth while at the same time initiating a number of in-house excellence programmes to ensure continued progress in profit. The Carlsberg brand has been the world’s fastest growing international beer brand in recent years. The Carlsberg brand is the flagship of the Group’s beer brand portfolio which also includes a number of important, leading local brands in most of the major markets. Carlsberg was an official sponsor of the European Football Championships in Portugal, EURO 2004. It was Carlsberg’s largest sponsor agreement and marketing campaign to date. The Carlsberg brand achieved an unprecedented high level of exposure. This was followed up with local marketing activities in a number of countries, and Carlsberg recorded sharply increased sales figures during the period, especially in the UK and Portugal. 2004 also saw significant global progress for the Carlsberg brand of approx. 6%, partly due to major growth particularly in the Russian and Polish markets. "The numbers are spot on while the 2005 profit growth forecast is a little lower than expected. All in all, I had expected a more positive tone for this year after the tough times the company had last year," said Jyske Bank analyst Annette Nikolajsen, who has a "reduce" rating on Carlsberg shares. "In fact we are looking at a double-digit underlying growth in the brewing activities," Carlsberg CFO Jorn P. Jensen told a conference call on Tuesday. "In terms of economic performance 2004 was not our brightest year," Carlsberg CEO Nils Smedegaard Andersen said...more info

United Kingdom: Brewing force, Scottish & Newcastle PLC, has reported on February 23, preliminary results for the year ending 31 December 2004. The company posted organic growth in beer volumes of 4.5%; operating profit +7%...more info

Italy: SABMiller plc announced on February 23 that it has acquired a further 39.8% of Birra Peroni that it does not already own, for a cash consideration of €162.5 million (US$212.6 million)...more info

Netherlands: Dutch brewing force, Heineken N.V., announced on February 22 its 2004 full year results, ahead of Heineken's forecast and market expectations. The company posted 8.1% organic net profit growth, an increase of EUR 65 million...more info

Russia: A dispute might arise between the largest players in the Russian beer market concerning brand names...more info

Malt News

Japan: Malt imports by Japan in 2004/05 remain forecast at 0.66 million tonnes by IGC, a slight decrease from last year...more info

Barley News

EU: For 2004-05, barley production in the EU- 25 is estimated by the USDA to reach afive- year high of 61.8 Mt, 13% higher than last year and 8% larger than the average of last 5 years. A milder winter and adequate soil moisture boosted yields significantly in France, Germany, Spain and other member states, despite a slight decrease in area harvested. Meanwhile, with the substitution of feed wheat and corn for barley, domestic feed use is forecast to return to a more normal level of 38.0 Mt from last year’s 41.0 Mt, although domestic food and industrial use remains unchanged at 15.9 Mt. EU barley exports are forecast to partially recover from last year’s 1.0 M to 3.3 Mt, but are still short of the historical average of about 6.6 Mt. As a result, EU carry-out stocks are projected to recover robustly, from 4.0 Mt in 2003-04 to 8.9 Mt, compared to the historical average of 9.6 Mt. Larger surplus supplies of malting barley in the EU, less competition from both Australia and Canada, and stronger import demand are expected to raise EU malting barley exports in 2004-05. Malting barley exports for the EU are forecast to increase from 1.1 Mt in 2003-04 to 1.3 Mt in 2004-05. The EU is the second largest exporter of malting barley and the world’s largest exporter of barley malt. France is the leading EU exporter of malting barley, followed by Denmark and the new members, the Czech Republic and Hungary. The EU also enjoys the most diversified markets among the major exporters. China, Russia, Brazil, Colombia and Peru are among its major markets. EU malting barley is dominated by two-row spring varieties. However, some two-row and six-row winter barley is grown in northwest Europe. The EU also has a relatively low select rate, of malting barley from the whole barley crop, at 20-25%. Although higher than the average of 16% for Canada, this is much lower than in Australia. The EU is also different from the other major exporters in that more of its malting barley production, 60-65%, is processed domestically, rather than exported unprocessed as grain, while that ratio is only 45% for Canada and one third for Australia.

World trade of barley in 2004/05 is forecast by IGC to rise to 15.8 million tonnes...more info

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

French Malting Barley Price Evolution

Table of the week

Australian Barley Supply and Disposal 2001-2005

in thousand tonnes	1999-2000	2000-2001	2001-2002	2002-2003	2003-2004	2004-2005f
Production	5 032	6 743	8 280	3 865	8 728	6 454
Domestic use	2 009	2 325	2 535	1 986	2 429	2 524
as malt and other human use	154	158	161	165	168	172
feed	1 700	2 000	2 200	1 650	2 100	2 200
seed	155	168	174	171	161	152
Exports	3 325	4 567	5 274	2 607	6 997	4 414
malting barley	1 234	1 824	1 705	1 099	2 135	1 465
malt (grain equivalent)	569	602	600	624	637	560
feed barley	1 524	2 143	2 971	885	4 239	1 948

Source: ABARE, 15 February, 2005.
Market year: November–October. This means that the 2001-02 barley crop harvested in November 2001 to January 2002 is marketed from November 2001 to October 2002.
The sum of domestic use and exports may differ from production as a result of changes in grain stock levels.

Graph of the week

Agenda

February 2005:
Pianeta Birra - Beverage & Co. International Show of Beers, Beverages etc., Italy;
Seminaire Orges brassicoles 2005 à Paris-Bagnolet;
Liqma International Beverage Industry Exhibition, Spain;
Canadian Food and Beverage Show;
GrainWorld 2005. Canada. CWB.;
Beer Business Daily's Second Annual Beer Industry Summit.;

March 2005:
Night of Great thirst, Belgium;
Zythos Beer Festival, Belgium;
Institute and Guild of Brewing Africa Section 10th Convention, South Africa;
China Drinktec China International Exhibition on Beverage, Brewery and Wine Technology;
FOODEX JAPAN 2005 / INTERNATIONAL FOOD & BEVERAGE EXH;
International Food and Drink (IFE), UK;
BLACK SEA GRAIN: A NEW ENVIRONMENT IN UKRAINE AND REGIONAL PROSPECTS FOR GROWTH;
Deltabierfestival, The Netherlands;
Spring Beer Festival "Hops on Equinox", Seattle;
Brew and Beverage Industry - Beer Auction International Trade Fair, Russia;
Siebel Institute Brewing Profitability Workshop;

April 2005:
Helsinki Beer Festival;
Concise Course in Brewing Technology;
World Barley, Malt & Beer Conference 2005;
JOINT LEGISLATIVE CONFERENCE. Washington, D.C., USA;
BEER. Exhibition Pavilion Minsk.;
Craft Brewers Conference & BrewExpo America;
Classic City Brewfest, Athens, GA;
WINES, BEERS AND DRINKS Exhibition for the Beverage Industry. Krasnoyarsk, Russia;
Excursion to West-Flanders;

More events are available on site e-malt.com