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Global hop market

A local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms. 

Hop Market in Russia

Germany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.

Cobra beer posts inaugural profit

Cobra beer announced its first ever annual profit on Monday and said it will nearly double marketing spend this year to grow sales.

The group posted pre-tax profits of ?4.9 million on sales of ?48 million last year, which comes after a deal in 2009 that left the group majority owned by Molson Coors.

Cobra underwent a 'pre-pack administration' in May 2009 in a controversial deal that saw Molson - which brews Carling, Grolsch and Worthington's - acquire a 50.1% stake in the business for a reported ?14 million, while unsecured creditors lost ?75 million.

The business, which was founded by Lord Karan Bilimoria, moved production of the beer from Bangalore to Molson Coors' factory in Burton last May as part of cost cutting measures following the deal.

Cobra has also been benefiting from Molson's marketing expertise and buying power, according to the group.

It spent ?3 million last year on a marketing campaign and said it will boost this to around ?5 million this year.

Adrian Davey, managing director of the Cobra Beer Partnership, said the move would help grow the brand. He said: "2011 marks a new chapter and we are very excited as Cobra moves on to the next stage of its brand evolution. Up to this point, the Cobra Beer Partnership has been about stability and ensuring the long-term health of both the brand and the business."

Cobra, which was first imported into the UK in 1990 by Lord Bilimoria, claims to be the perfect accompaniment to curry because it is less fizzy than most lagers. While the beer has proved popular, especially in curry houses, the business failed to make a bottom-line profit for nearly 20 years.

By 2008, it became clear that Cobra needed the help of a large brewer to succeed in the highly competitive beer market and the company unsuccessfully tried to find a buyer, including drinks giant Diageo. Cobra then attempted to secure a company voluntary arrangement (CVA) - an alternative to administration - to reduce its losses.

But this was blocked by some of the company's creditors, including Bombardier-brewer Wells & Young's, which brewed for the company under licence in the UK. Cobra went into a pre-pack administration that saw it bought immediately by Molson.

UKPA

28 Mar. 2011

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