E-Malt.com Flash 15b. April 14

New Zealand & Czech Republic: DB Breweries has recently announced that it is adding imported beer Budejovicky Budvar to its premium portfolio...more info

Russia: SUN Interbrew announced on April 14 the launch of Brahma®, one of InBev's global flagship brands, on the Russian market...more info

China: The investment bank Merrill Lynch said on April 13 it has maintained its 'sell' recommendation for Tsingtao Brewery Co Ltd on concerns over the outlook for growth despite improved earnings last year, according to AFX News. China's biggest brewer reported on April 12 2004 net profits of 285 million yuan, up 16.4 % over the previous year and above Merrill Lynch's estimates, but the brokerage said Tsingtao is likely to continue losing market share and feel margin pressure. Tsingtao's gross margin and operating margin also significantly decreased in the second half of last year due to surging raw material costs. That trend is likely to continue in 2005, driven by higher expenses for packaging, selling, distributing and utilities, the brokerage said. 'With rising cost pressure and limited pricing power, we think it's hard for Tsingtao to pass on rising costs down the value chain. Therefore, margin erosion is inevitable,' it said. Tsingtao's market share dropped to 12.7 % in 2004 from 12.8 % in 2003 as competition from Yanjing Brewery and China Resources Brewery intensified, Merrill Lynch said in a research note. US beer producer Anheuser-Busch (AB) recently raised its stake in Tsingtao to 27 % from 9.9 % by exercising its convertible bonds, but the move indicated a commitment to the Chinese market in the long-term rather than acting as a near-term catalyst for Tsingtao itself, Merrill Lynch said. 'Considering Tsingtao's origin as a state-owned enterprise, we expect AB to be very cautious in terms of any major strategic initiatives with Tsingtao.' With estimated 2005 earnings per share (EPS) at 36 times, while comparable Chinese consumer stocks are trading at about 20 times, Tsingtao is the 'most expensive China consumer stock,' Merrill Lynch added. Tsingtao's shares were unchanged at 8.35 hkd in late morning in Hong Kong. (1 usd = 8.3 yuan) (1 usd = 7.8 hkd)

United Kingdom: One of the world’s largest beer makers, Scottish & Newcastle, which accounts for 27 % of the beer market in the UK, announced on April 13 it believed it could achieve organic sales growth (stripping out acquisitions) of 3-5% per annum. The group, which is closing two breweries, at Fountainbridge in Edinburgh and in Newcastle, said it was confident it could also deliver continued improvements in net operating margins through greater efficiency, Business Scotsman posted on April 14. The comments were made at a marketing seminar in London, where Stephen Glancey, S&N’s operations director, spoke of the opportunities for further efficiencies in areas such as procurement, manufacturing, distribution and research and development. At the seminar, Britain’s biggest brewer would not comment on current trading other than to say it was in line with comments made at the announcement of its annual results in February. Then, S&N, whose brands include Kronenbourg, Foster’s and John Smith’s, reported an 11 per cent rise in underlying profits to £373 million. A theme of the year was strong performances in the UK and Russia helping to offset flat trading in western Europe. It said at that time that, while its UK business was set to grow, its European divisions would have a subdued performance due to weak consumer confidence. Nigel Popham, brewing analyst at broker Teather & Greenwood, said S&N’s statement on trading had been expected. However, he said targeting 3 to 5 per cent organic sales growth was "fairly ambitious" and thus "quite positive". In February, Scottish & Newcastle reported 2004 profits in line with expectations. The group said then that sales volumes of its top four brands had risen by 4.5 per cent in the UK , pushing operating profits from its biggest region up by 11 per cent on a year earlier. Overall, group profits before one-off items were in line with market hopes at £373m, compared with the £336m seen in 2003. When including the sale of 1,400 pubs in 2003, profits were down on £471m previously. S&N, which accounts for 27 % of the beer market in the UK, said that while its UK business was set to grow its European divisions would have a subdued performance due to a weak consumer confidence outlook. Scottish & Newcastle shares closed up 1p at 488p yesterday. The stock has outperformed the benchmark FTSE 100 index by 8 per cent since the start of 2005. However, broker Panmure yesterday suggested to investors that they take profits on the recent rise in S&N’s share price.

Bosnia and Herzegovina: Belgian brewing force, InBev, has sold its 59% share in Bosnia’s Uniline brewery...more info

Malt News

EU: Apart from the announced malt factory closures in the U.K., Ireland and Slovakia it is reported now that summer pauses or temporary shutdown will become necessary for a number of factories, specifically in Scandinavia and the Southeastern EU, experts have recently revealed. On the other hand, 250,000 tonnes of missing business present no more than 3 % of the EU’s malt capacity.

Russia: Russian Brewery Ochakovo entered agreements with 60 farms in Belgorod and Lipetsk regions to purchase 100 thousand tonnes of malting barley of crop 2005...more info

Barley News

EU 25 malting barley production in 2005/2006 is forecast by Strategie Grains at about 12.1 million tonnes...more info

Australia: ABB Grain Ltd announced on April 13 it has increased its Victorian and South Australian barley pool indicators for 2005/06 by A$5/t, to A$185-195/t for malting 1 barley and A$145-155/t for feed 1 barley. ABB Grain Ltd managing director, Michael Iwaniw, emphasised that these estimates were based on export prices, and that the east coast supply of grain and the domestic demand for feed grain would be major influences on prices as the season progressed. Michael Iwaniw said that international barley prices were holding steady, and with the recent downturn in the $A/$US exchange rate the company was able to increase its estimated pool indicators for the new season. “Simply speaking, the higher the exchange rate, the less money received when the US sales price is converted back to Australian dollars,” Mr Iwaniw said. “This is the major influence on grower returns at the moment, and with the exchange rate dropping to a lower level we anticipate a greater return to growers for their grain. “Barley prices in US dollars are above historic averages, and have remained at reasonably high, stable levels for some time. “However the high $US prices are not being reflected in the $A prices because of the high level the exchange rate has been sitting at. This demonstrates how much of an impact the exchange rate has on the sales price of grain, compared to what growers actually receive.” Mr Iwaniw said that the while the movements of the exchange rate would be a crucial factor in the returns to growers this season, another key influence was the expected size of the northern hemisphere crop. “Large crops are forecast in both eastern Europe and the European Union (EU), with growers experiencing favourable conditions. Buyers are holding off in the face of this expectation which is, and will continue to, put pressure on international prices. “It’s still early days yet, and barley prices are certainly not set in stone. There are a number of other issues that can impact on pool returns between now and the time that the 2005/06 barley crop is fully marketed. “All we can do is reflect what the markets are indicating at this stage. We will keep growers informed throughout the season of further developments.”

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

Barley Price Evolution

Canada Average Barley Price Evolution

Table of the week

EU Malt Export Licence Fixations:

(in tonnes)	2000-2001	2001-2002	2002-2003	2003-2004	July 01, 2004 - March 29, 2005
France	523,190	701,134	661,772	774,761	566,800
Germany	305,980	468,314	408,063	422,047	195,274
Belgium	277,584	296,368	287,850	317,292	305,908
UK	254,793	350,621	294,995	443,501	185,156
Finland	65,550	91,890	100,758	114,165	35,866
Denmark	52,326	96,812	94,791	90,452	39,994
Sweden	50,847	101,000	76,916	78,369	64,840
Netherlands	54,835	51,310	66,219	80,703	35,908
Ireland	26,003	35,145	31,140	38,900	56,924
Austria	4,850	8,840	8,620	60,211	7,521
Spain	3,000	2,400	5,640	10,000	-
Greece	1,800	1,744	1,306	979	130
Portugal	340	221	85	695	680
Italy	-	-	2	-	-
Total EU 15	1,621,098	2,205,799	2,038,157	2,432,075	1,495,001
New EU members				May-June, 04
Czech Republic				34,340	59,692
Poland				7,604	29,988
Hungary				2,830	50,279
Slovakia				1,000	51,138
Total EU 25	1,621,098	2,205,799	2,038,157	2,477,849	1,686,098

	Total Wheat malt, tonnes
Total 2000-2001	4,686
Total 2001-2002	12,805
Total 2002-2003	30,908
Total 2003-2004	15,768
July 01/2004 – March 29/2005	4,680

	Total Roasted malt, tonnes
Total 2000-2001	23,967
Total 2001-2002	23,480
Total 2002-2003	23,603
Total 2003-2004	24,438
July 01/2004 – March 29/2005	21,431

Graph of the week

Agenda

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;
SAMARA DRINKS. SAMARA, RUSSIA;
WINES, BEERS AND DRINKS Exhibition for the Beverage Industry. Krasnoyarsk, Russia;
Malting Course BRi Nutfield United Kingdom;
INTERPAK 2005 Duessledorf, Germany;
Excursion to West-Flanders;

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

June 2005:
World Barley, Malt & Beer Conference 2005, Germany;
ASBC Annual Convention. American Society of Brewing Chemists Meeting.;
IGC GRAINS CONFERENCE 2005;
BRASIL BRAU International Fair of Beverage Technology;
FOOD TAIPEI 2005. The largest food and beverage show in Taiwan;
BevTek / BrewTek International Exhibition of Beverage and Brewery Processing and Packaging Technology. Bangkok, Thailand ;

More events are available on site e-malt.com