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• Canada: This year, Sapporo will buy 80 % of its barley under grower contracts through the chain of maltsters and grain companies in Canada ...more info



• Heineken and Interbrew’s ratings has been changed by Delta Lloyd Securities on March 9. Delta has downgraded Heineken to “in-line” from “outperform” ...more info



• Kenyan beer maker, East African Breweries Limited has announced their Half Year Financial Results for the period ending December 2003 ...more info



• Bitburger Brauerei will maintain its independence going forward, the brewer’s chief executive Michael Dietzsch told Die Welt on March 9 ...more info



• Russian brewers produced about 5.09 million hl of beer in January 2004, 22% more than in January 2003 ...more info



• Ukrainian Brewery ZAO Obolon has increased its production by 26.1% in February 2004 versus February 2003. In the second month of the year the brewery output 45 million litres ...more info



• The Czech Republic sold about 3,6 million hl of beer to Russia in 2003, according to the CzechTrade data. This figure is to increase by 10% in 2004 ...more info



• Poland’s brewers sold about 27.4 million hl of beer in 2003, 4.6% more than last year. However, Polish brewers are afraid of a drop in beer sales ...more info



• Danish Carlsberg A/S’ acquisition of Orkla’s 40 % shareholding in Carlsberg Breweries has been completed on 8 March 2004 ...more info



• Belgian beer maker, Interbrew, is launching a new beer for women in France this month ...more info

Brewery News

Hong Kong: China Resources Breweries Limited (CRB), a subsidiary of Hong Kong-listed China Resources Enterprise, Limited (CRE) and a joint venture with global brewing giant SABMiller plc (SAB), announced that it has entered into a conditional agreement with the majority shareholder of Zhejiang Qianpi Group Company Limited (Qianjiang) to expand further into China's eastern beer market. CRB, the second largest beer maker in China by volume, said that under the terms of the agreement, both parties will cooperate to reorganize Qianjiang into a joint venture company in which CRB will have 70% equity interests in Zhejiang Qianpi Group Co Ltd, also known as Qianjiang and the current shareholders of Qianjiang will hold the remaining 30%. CRE expects that through the close cooperation with Qianjiang, CRB will be able to bring its experience, capital, management expertise, technical skill and success from the Northeastern part of China to the Eastern market. Qianjiang is the single largest brewery in Zhejiang Province in terms of production capacity. With the new company, the annual production capacity of CRB will be increased by about 480,000 kilolitres to approximately 4.56 million kilolitres with breweries in the North Eastern, South Western, Central and Eastern regions of mainland China. Qianjiang achieved sales volume of 240,000 kilolitres in 2003. Furthermore, Qianjiang produces beer under two well-known brands in Zhejiang Province. With these two brands, CRB can strengthen its leading position in the brewing industry in China. CRB already has a portfolio of famous brands of beer, in which "Snow" is a national brand. Frank Ning, Chairman of CRE, said: "With Qianjiang, CRB not only can strengthen its leading position in the brewing industry in China but also be able to expand its geographical coverage to the Eastern part of China...more info

South Africa, Johannesburg: Brewers Diageo, Heineken and Namibia Breweries said on March 5 that South Africa's competition commission had approved a joint sales, marketing and distribution venture in the country. The joint venture is set to spearhead the assault by Namibia Breweries on SABMiller's hold on the South African beer market, which it dominates with a massive 98 % share, according to Reuters. Diageo, Heineken and Namibia Breweries Limited (NBL) said they were in negotiations to finalise the terms of the joint venture, which South Africa's Competition Commission had approved unconditionally on March 2. Diageo and Heineken took an effective 28.9 percent stake in Namibia Breweries in mid-2003 after Heineken decided not to renew SABMiller's licence to brew its trademark green-labelled beer in South Africa. NBL plans to brew Heineken in Namibia. The move laid the ground for a battle for market share in South Africa's premium beer sector -- which some analysts say is growing by around 16 percent a year. "This decision sanctions the commencement of an exciting new phase that will step up the remarkable growth of NBL's popular premium brands in South Africa," Namibia Breweries Chairman Sven Thieme said in Friday's statement...more info

Japan: Beer shipments by Japan's five top brewers in February rose 1.0% from a year earlier for the first year-on-year increase in 47 months, according to reports the five released on March 10. Beer shipments by Kirin Brewery Co, Asahi Breweries Ltd, Sapporo Holdings Ltd, Suntory Ltd and Orion Breweries Ltd totaled 17.41 million cases in February. One case holds 12.66 liters, or an amount equivalent to 20,633 millilitre bottles.

The shares of Mexican beverage company Femsa fell 2.5% to $48.49 on March 8 as management prepares to hold a series of meetings this week with Brazil's Ambev. Ambev assumed Interbrew's 30% stake in Femsa's beer division when it merged with Interbrew last week, but it's not clear whether Femsa will seek to ally itself with the Brazilian-Belgian behemoth or try and tackle the neighboring U.S. market on its own. Brazil's AmBev is set to meet with Femsa this week to discuss its 30% stake in the Mexican brewer. Following last week's merger between Interbrew and AmBev, the Brazilian brewer is set to take control of Interbrew's stake in Femsa, although the Mexican brewer now has first refusal to buy back the share. AmBev is keen to keep the share in Femsa, but following the fractious relationship between Interbrew and Femsa, it is thought that the Mexican company may jump at the chance to buy back the share. In a conference call, AmBev co-chairman Marcel Telles said; "We are starting talks (with Femsa) to figure out the best alternatives for both companies going forward. "Hopefully we'll find alternatives to further enhance our partnership," added Telles. In a research note, Bear Stearns analysts said on Friday: "We believe Femsa should and will repurchase the Interbrew stake at a compelling valuation for Femsa investors."

Danish brewing giant, Carlsberg A/S, posted on 8 March 2004 that Carlsberg Breweries seeks full ownership of Carlsberg Okocim, Poland. On 23 December 2003, Carlsberg A/S announced a public offer for the remaining shares in Carlsberg Okocim S.A. The offer closed on 16 January 2004, resulting in an increase in Carlsberg Breweries’ shareholding in Carlsberg Okocim from 85 % to 93 %. With the objective of delisting Carlsberg Okocim from the Warsaw stock exchange Carlsberg Breweries announced on March 8 yet another public offer for the outstanding shares in Carlsberg Okocim. The offer price per share is PLN 25.50 (approx. DKK 40). The offer is effective as of 15 March 2004 and closes 14 April 2004.

Malt News

Russian beer giant OAO Baltika Brewery has already invested about US$ 22 million in building a malting plant in Tula. 70% of the plant construction has already been finished. The company is to invest some more US$ 10 million. Baltika plans to launch the plant in the second half of 2004. The plant will have a production capacity of 105 thousand tonnes of malt per annum. The pay-back period is estimated at 6-9 years. The new malting plant of Baltika is to consume about 11 thousand tonnes of high quality barley per month. Enterprises of Tula region will be able to sell grains to Baltika at a value of US$ 10 million per year. The brewery has already signed contracts with the farmers regarding barley purchasing.

Barley News

EU barley outlook for 2004/2005, in million tonnes

	2001/02	2002/03	2003/04			2004/05
			winter	spring	total	winter	spring	total
Germany	13.49	10.93	7.05	3.61	10.67	9.14	3.22	12.36
Denmark	3.97	4.12	0.77	3.00	3.77	0.67	3.10	3.77
Spain	6.25	8.00	2.02	6.68	8.70	1.90	6.80	8.70
France	9.81	10.99	5.84	3.97	9.82	7.44	4.04	11.48
Ireland	1.28	0.96	0.13	1.03	1.16	0.15	1.11	1.26
The Netherlands	0.39	0.32	0.02	0.35	0.37	0.02	0.32	0.34
United Kingdom	6.66	6.13	2.85	3.52	6.37	2.48	3.42	5.90
Austria	1.01	0.86	0.34	0.54	0.88	0.35	0.55	0.90
Finland	1.79	1.74		1.70	1.70		1.80	1.80
Sweden	1.64	1.78	0.03	1.51	1.54	0.02	1.57	1.60
Others EU15	1.69	1.80	1.44	0.08	1.52	1.63	0.07	1.67
Poland	3.33	3.37	0.36	2.50	2.86	0.38	2.96	3.35
Hungary	1.30	1.05	0.44	0.37	0.81	0.65	0.45	1.10
Czech Republic	1.97	1.79	0.31	1.76	2.07	0.51	1.28	1.79
Slovakia	0.69	0.70	0.03	0.78	0.81	0.05	0.77	0.82
Other New States	1.44	1.53	0.17	1.31	1.47	0.17	1.35	1.51
EU 15	47.97	47.62	20.49	25.99	46.49	23.80	26.01	49.81
New States 10	8.72	8.44	1.31	6.73	8.04	1.76	6.80	8.57
EU 25	56.68	56.06	21.80	32.72	54.52	25.57	32.81	58.38

Source: HGCA

The EU is currently the only malting barley producing region for which a fairly sound estimate can be made, as harvest is just over 5 months away, HGCA posted on March 8. Strategie Grains estimates that the 2004/05 EU-15 winter barley area could increase by 30,000ha to 4.3M ha while the spring barley area could rise by 70,000ha to 6.3M ha. Spring barley plantings are expected to stay at a high level this year due to the cut in the set-aside rate. For the EU-25 Strategie Grain expects the total barley area to remain stable at 13.5M ha, since the slight increase in the EU-15 barley area is being offset by an area decrease in the new EU member countries. The 2004/05 EU-15 barley production is currently forecast at 49.8M tonnes (46.5M tonnes in 2003/04).Adding some 8.6M tonnes (8M tonnes) for the 10 accession countries, Strategie Grains estimates the 2004 barley crop for the enlarged EU at 58.4M tonnes. The majority of this rise is due to the higher yielding winter barley (table). For 2004/05, even though the overall EU-15/25 spring planted area is expected to be higher, Strategie Grains forecasts a reduction in the EU (15 and 25) spring malting barley production. This is due to a slightly lower planted area in the key producers of France, Germany and the Czech Republic, and due to a lower yield potential in the UK and the Czech Republic. This has led Strategie Grains to forecast a 34 per cent (37 per cent in 2003/04) proportion of the 2004/05 spring barley crop suitable for malting purposes for the EU-15, while the proportion for the 10 accession countries is projected lower at 19 per cent (21 per cent in 2003/04). Although some 8.6M tonnes of barley will be added to the EU balance sheet when the 10 accession countries join, the immediate impact of the enlargement on the EU-15 market is likely to be limited...more info

In 2004, barley plantings in Canada are expected to be 5-10 per cent lower than in 2003 according to the Canadian Wheat Board (CWB), although continued dryness in spring could boost the area back to 2003 levels. Canadian barley production in 2004 is currently forecast by the CWB at 12.2M tonnes, down just slightly from 2003. Canada’s bulk malting barley exports are forecast to be relatively stable in 2004-05. Since the 2003/04 crop in Australia has only just been harvested, it remains too early to forecast what may happen to barley in Australia.What will be key is the El Niño effect on weather patterns, HGCA posted.

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 2004 are available on site www.e-malt.com/MarketPrices

Malting barley prices. French barley prices. Nominal prices.

EURO = USD 1.2316 March 10, 2004
Crop year		2003		2004
Parity		FOB Creil		FOB Creil
Position		July 2003		July 2004
Type	Variety	EURO	USD	EURO	USD
2RS	Scarlett	129.00	159.00	129.00	159.00
2RS	Prestige/Cellar	128.00	158.00	128.00	158.00
2RS	Aspen	127.00	156.50	127.00	156.50
2RS	Optic	127.00	156.50	127.00	156.50
2RS	Astoria	126.00	155.50	126.00	155.50
2RS	Cork	126.00	155.50	126.00	155.50
6RW	Esterel	nq	nq	118.00	145.50

nq - Not quoted

Prices for Danish and UK malting barley are available on site www.e-malt.com/MarketPrices

Graph of the week

Agenda

March 2004: PIVEX - INTERNATIONAL BREWING & MALTING FAIR ; New York City Real Beer Festival; Real Ale Festival; The Night of Large Thirst; Zythos Beer Festival; International course - Malting and Brewing Science; ALIMENTARIA 2004; FOODEX Japan 2004; ANTAD 2004; FOOD & DRINK EXPO 2004; Forth Russian Conference on Non-alcoholic Beer; 2004 BIENNIAL CONVENTION; Beer Auction 2004, the international exhibition of beer, technology and equipment; China Drinktec 2004. China International Exhibition on Beverage and Brewing Processing Technology
April 2004: InterFood; INTERFOOD UZBEKISTAN /INTERFOODTECH 2004; INTERFOOD ST. PETERSBURG 2004; SIBFOODEXPO 2004; BEER. WINES & DRINKS International Beer; World Beer Cup; 2004 National Craft Brewers Conference; FOODASIA 2004; ASTANA FOOD 2004; INTERFOOD AZERBAIJAN/ INTERFOODTECH 2004; 43rd MBAA District Caribbean Convention; IFEX 2004; EXPOVIVIENDA 2004;
May 2004: EBC SYMPOSIUM 'FOOD SAFETY & TRACEABILITY'; CANADEAN'S 4th INTERNATIONAL BEER CONFERENCE; CITBUSMED 2004; PIVO, GASTRO, BAKERY / Bulgaria; ALCO + SOFT 2004 / Ukraine; FOOD & DRINKS/FOOD TECHNOLOGY 2004 / Moldova; Beer International Brewing Technology Exhibition / Russia;

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