E-Malt.com Flash 11b. March 17

Thailand, Bangkok: Thousands of Buddhist monks gathered in font of the Stock Exchange of Thailand (SET) in Bangkok on Friday, March 18, to protest the planned listing of Thai Beverages company, which produces Thailand's best-selling Beer Chang or "Elephant Beer". A final decision on whether to list shares of Beer Chang is expected to be made by the SET's board on Wednesday, March 23. Thai Beverages, part of the business empire controlled by liquor baron Charoen Sirivadhanbhakdi, a strong political supporter of Prime Minister Thaksin Shinawatra - intends to sell around one-third of its shares, raising up to $1bn in what would be the biggest listing in the history of the Thai market. From the Thailand Development Research Institute (TDRI), Dr. Duenden Nikhomborirak said that the listing would serve to strengthen the beer giant; thus, making the alcoholic beverages industry more difficult to control. The listing would be a first by a local liquor company, and its rival Boon Rawd Brewery, the country's oldest, has plans to follow suit, the English-language daily reported. Some 2,000 monks submitted a letter to the Stock Exchange of Thailand opposing the listing of the brewer, which produces Chang Beer and Mekhong Whisky among other products. The letter lamented the ill effects that alcohol has on society, in particular the surging number of alcohol-related deaths from road accidents and the rising trend of underage drinking, Thai television reported. Many held up banners, including one reading 'Alcohol, go to hell'. The SET Vice president accepted a protest letter from the monks while scores of police officers helped direct the traffic. The monks said that the listing would present "a grave threat to the health, social harmony and time-honored ethics of Thai culture," Associated Press cited. The Thai Buddhist Monks National Coordination Center, which organized the protest, said that the stock float threatened to exacerbate the spread of alcohol consumption in a country that already ranks very high among the world's drinking nations. The basic principles of Buddhism require followers to refrain from consuming alcohol and drugs, among other activities. Alcohol consumption among female teenagers increased by 600 % between 1996 and 2003, the Buddhist group said. Thailand is the fifth-largest consumer per capita of alcoholic beverages in the world and consumption among young people has surged, the health ministry warned last August. Academics also have urged the stock exchange not to rush into approving the listing application. 'Thai Beverages should not be allowed to list on the SET as long as the government fails to control distribution of alcohol among teenagers and doesn't enforce alcohol consumption laws,' researcher Duenden Nikomborirak of Thailand Development Research Institute said in the Bangkok Post. “While large amounts of alcohol are still being sold to young people, and while law enforcement remains poor, we should not allow alcoholic products to be listed on the stock exchange”, Dr. Duenden said. “We first need to build up mechanisms which help reduce the consumption of alcohol”, she added. Pointing to the example of Russia, she said that allowing listing on the stock exchange would create a huge number of problems in its wake, as there would no longer be sufficient checks on the alcohol business. Cheap and potent, Beer Chang is the country's top-selling beer and is especially popular with rural drinkers. The company is owned by Charoen Sirivadhanabhakdi, Thailand's richest man.

Russia: Ivan Taranov Breweries published on March 17 a memorandum according to which it intends to sell a part of its shares to a foreign investor. Russian beer maker presented the second bonded loan...more info

Denmark: The Danish Brewery Group (Bryggerigruppen) announced on March 17 that in 2004 it achieved a profit before tax of DKK 250.2 million, which is in line with the expectations expressed in the Company’s Q3 Report 2004, that is a profit before tax in the amount of DKK 235-265 million. In 2004, Europe saw the worst summer weather in several decades, which had a negative effect on consumption of both beer and soft drinks contributing to intensifying the already keen price competition – particularly in Northern Europe. Accordingly, the results achieved in Denmark, Norway, Lithuania and Germany were affected by this price pressure. The situation in Germany regarding deposit on disposable containers remained unsettled, which continued to obstruct sales opportunities for the Faxe brand. In 2004, profit margin was at the targeted 10% compared to 10.7% in 2003. The development in profit margin from 2004 is primarily explained by a supply agreement with COOP, the acquisition of the distribution company Impec Holding SAS as of Q4 2003 as well as the increased price pressure mentioned above and the summer of 2004 being unfavourable to beverages sales. Return on invested capital (ROIC) was at 10.5% compared to 10.1% in 2003 (adjusted for DKK 40 million in respect of the closure of the Group’s Randers brewery). Free cash flow for the year amounted to DKK 233 million. Accordingly, the key targets identified in V8 and V8 Next were achieved in 2003 and 2004, not least as a result of the V8 Plan initiatives of resource optimisation and streamlining. The targeted savings for the period were realised. However, a 2004 project on reorganisation of the Danish storage structure involved higher non-recurring expenses than anticipated, which affected the Group’s profit before tax negatively by some DKK 12 million. Total group sales in 2004 aggregated 4.8 million hectolitres of beer, malt and soft drinks, which is a 17.5% increase over 2003. Some 10 percentage points of the increase are attributable to Cido Partikas Grupa, which is included in the Group’s financial statements as of Q3 2004. Beer and malt drinks sales aggregated 3.4 million hectolitres, which is a 10.9% increase over 2003, whereas soft drinks sales (including mineral water and fruit juices, etc) aggregating 1.4 million hectolitres increased by 39.9% primarily as a result of the acquisition of Cido Partikas Grupa. Net revenue amounting to DKK 2.9 billion in 2004 increased by 9% over 2003. Just below 5 percentage points of the increase are attributable to the acquisition of Cido Partikas Grupa. Furthermore, the Caribbean (in consequence of the acquisition of Impec Holding SAS in Q4 2003) and Germany showed considerable growth...more info

Poland: Brewery Brok-Strzelec, which controls two beer production plants with a total capacity of almost 1,000 hectoliters of beer annually, has failed to meet its financial prognosis for 2004...more info

USA: Molson Coors Brewing Co., the world's fifth-biggest brewery, said on March 17 it will pay the new head of its U.S. subsidiary, Frits van Paasschen, an initial base salary of $625,000 per annum plus annual bonuses...more info

Australia: Foster’s Group Ltd., Australia's biggest beer maker, said the A$203 million (US$161 million) sale of its Kent Brewery site in Sydney to Australand Holdings Limited fell through. Foster’s Group Limited announced on March 17 that it’s Australian beer, cider, spirits and non-alcohol division Carlton and United Beverages (CUB), would pursue an alternative approach to the sale of its Kent Brewery site in NSW. Foster’s said in a press release that in September 2003 CUB signed a conditional agreement to sell the Kent Brewery site to Australand Holdings Limited. The gross proceeds of the sale amounting to A$203 million were due in instalments from June 2005, when development approvals were expected, to 2010. After extensive consultation, Australand Property Group and CUB have elected to mutually rescind their contractual arrangements. CUB and its property advisers will now seek greater certainty around potential planning outcomes for the site before proceeding with any sale process. CUB will continue to work with all stakeholders to ensure the best outcome for the site. Australand said the costs incurred by it to date for design and other costs in respect of the project were about $4 million after tax and would be expensed in Australand's June 2005 half-year results. "This amount is not material and will not impact on forecast 2005 distributions of at least 16.5 cents per stapled security as previously announced," Australand said. Foster's shares were four cents lower at $5.33 on March 17. Australand securities were steady at $1.74.

Barley News

EU: Reports from Australia indicate a reduce supply of malting barley for China. Normally they supply over 1.0Mmt but are likely to be well under that amount this campaign...more info

World barley trade 2004/2005: United States Department of Agriculture (USDA) published on Mach 11 its latest forecast of world trade changes of barley in 2004/2005. According to USDA, 2004/2005 Bulgaria barley export is raised by 200,000 tonnes up to 400,000 tonnes because of newly available trade data. Canada barley export is dropped 200,000 tonnes down to 1.5 million tonnes because of malting barley quality issues. Russia barley exports for 2004/2005 is cut again this month to the lowest level in 5 years (1.0 million tonnes) due to slow exports. However, Ukraine barley export is raised again this month, this time by 300,000 tonnes to a record 3.8 million tonnes.

Theoretical malt prices.

* - 70/30 = 70% Average Two Row Spring and 30% Six Row Winter
** - 50/50 = 50% Average Two Row Spring and 50% Six Row 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

Malting Barley Price Evolution

Canadian Malting Barley Prices compared to Danish 2Row

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		2005	2004	2005	2004
EU-15	Austria	444	551	1,006	1,004
	Denmark	2,800	2,887	3,672	3,634
	Finland	1,840	1,748	1,840	1,748
	France	3,060	3,691	9,907	10,944
	Germany	2,845	3,372	11,899	12,963
	Ireland	1,005	1,104	1,170	1,274
	Belgium/Lux.	35	35	367	355
	Netherlands	254	274	271	294
	Spain	6,922	7,940	9,173	10,582
	Sweden	1,670	1,638	1,698	1,699
	UK	2,943	3,116	5,444	5,818
	Italy			1,272	1,148
	Greece			327	372
	Portugal			11	16
TOTAL EU-15		23,819	26,356	48,056	51,850
EU-10	Czech Republic	1,269	1,814	1,860	2,401
	Hungary	429	600	1,127	1,460
	Poland	2,758	2,850	3,245	3,518
	Slovakia	545	778	731	984
	Cyprus			110	92
	Estonia	280	286	285	290
	Latvia	299	296	293	306
	Lithuania	647	653	740	690
	Slovenia			28	29
	Malta			3	3
TOTAL EU-10		6,227	7,276	8,420	9,772
TOTAL EU-25		30,046	33,632	56,476	61,622
Europe Non-EU	Romania	330	350	1,014	1,386
	Bulgaria	69	82	780	850
	Serbia			269	279
	Croatia			140	158
	Bosnia			50	53
	Macedonia			138	149
	Albania			30	30
TOTAL Europe Non-EU		399	432	2,420	2,906
TOTAL EUROPE 31		30,445	34,064	58,896	64,529

Source: Coceral, Brussels, February 2005

Graph of the week

Agenda

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;
UzFood. International Exhibition for Food, Drink Packaging Technology. Uzbekistan.;
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;
Tour de Geuze 2005. Payottenland, Belgium;
FAB 2005 - BC Food & Beverage Conference. Vancouver, BC;
Grains Week 2005. Queensland, Australia;
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;
SOUTH-UKRAINIAN DAYS OF FOOD AND DRINKS;
SIBFOODEXPO, Siberian Beer. Novosibirsk;
WINES, BEERS AND DRINKS Exhibition for the Beverage Industry. Krasnoyarsk, Russia;
Excursion to West-Flanders;

May 2005:
HOFEX 2005. 11th Asian International Exhibition of Food & Drink. Hong Kong;
30th Congress of the European Brewery Convention;
Beer International Brewing Technology Exhibition. Sochi, Russia.;
Export Credit Guarantee Programs Seminar. USDA;
California Festival of Beers;

More events are available on site e-malt.com