E-Malt.com News article: 3991

Australia: Over the outlook period to 2008-09, there will be a small decline in annual domestic beer sale volumes per capita (following a significant decline in the previous ten years), according to IBISWorld forecast. However, price increases and a rising market share from premium beer will enable revenue to increase, albeit modestly. Beer producers will continue to face competition for sales from wine and other alcoholic drink producers over the next five years.

IBISWorld expects slow growth in domestic demand for malt while export prospects are moderately favourable. Some weakness in Asian demand (especially Japan) is expected to be relegated to the past during late 2004-05 and beyond, but a continued appreciation of the Australian dollar over much of the outlook period will have an offsetting adverse effect on export growth, mostly to the US, and to a lesser extent, Japan.

Some improvements in efficiency and in product quality will facilitate a small growth rate in value added over the next five years, at an annual average increase of 0.9% to A$1.24 billion.

Due to slow growth in global demand for malt, IBISWorld expects some softening in global malt prices over the outlook period.

ABARE forecasts that over much of this five-year period, there will be a real decline in prices received by Australian farmers for malting barley. However, improvements in the quality of Australian malt will most likely provide some price premiums. Due to fairly unfavourable demand conditions, beer prices are forecast to either stabilise or fall during the outlook period.

Employment levels are anticipated to remain quite steady over the forecast period as revenue is expected to do the same. Minor reductions in staff numbers are likely to follow any falls in sales and will be required as mechanised production replaces some employees. By 2008-09, approximately 2,658 people are expected to be employed by this industry, down slightly from 2,730 in fiscal 2004. Wage and salary decline is expected to be negligible, and so the wages/salaries’ share of industry revenue is forecast to slowly fall from 6.5% in the two years to June 2006 to 6.3% by 2008-09 as processes become a little more capital intensive.

Export growth is predicted for malt and beer although the focus continues to move toward offshore production or licensing. In addition, recent appreciation of the Australian dollar over the past year or so is making locally-produced beer products less attractive in key overseas markets.

It is anticipated that industry profitability will increase slowly but steadily (i.e. from 32% currently to 33.3%) for the period. This is due to the expectation that value added will generally move in the same direction as industry revenue, although gaining some ground, and the wages/salaries’ share of revenue will be reduced marginally and as some price increases are implemented.


15 January, 2005