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4-2017

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.

NYC Company Expected to Tap into Iron City Brewing

Almost two years after Iron City Brewing Co. left Pittsburgh, a New York City-based private equity firm is expected to announce plans to buy the beer brand as soon as today.

Iron City President Tim Hickman said he is legally prohibited from commenting on details of the pending sale, but that he hopes to make more information available.

"There's going to be a press release (today)," Hickman said when reached by phone. "I'm under a pretty tight disclosure schedule right now."

In July 2009, Iron City shut down production at its 10-acre Liberty Avenue facility in Lawrenceville after 148 years and transferred operations to a brewery in Latrobe that once produced Rolling Rock beer. Rolling Rock was sold in 2006 to Anheuser-Busch, which moved operations to New Jersey.

Iron City's move cost about 50 Pittsburgh workers their jobs and eliminated the last of the brewers from Pittsburgh, which was home to more than two dozen breweries at the turn of the 20th century.

Iron City brews several brands, including IC Light, Augustiner Lager, Great American, Great American Light, Stoney's of Jones Brewing Co. in Smithton and McSorley's and Southhamptom Ale of Pabst Brewing Co. of Woodbright, Ill.

Pennsylvania Liquor Control Board records show ICB Acquisition, a limited-liability corporation based in Dauphin County, applied for a license as a malt beverage manufacturer.

ICB stands for Iron City Brewing.

The only name on the application is Scott M. Porter, a partner at Uni-World Capital L.P., the New York City private equity firm.

Porter declined to comment on the pending sale. He e-mailed a statement that said Uni-World "does not comment on rumor or speculation" and referred questions to public relations firm Ketchum. A spokesman for Ketchum declined to comment.

"That's sort of between them," said George Parke, CEO of City Brewing Co. of La Crosse, Wis., which owns the Latrobe plant. "We're aware of (the sale), but beyond that, I can't really comment on it. It's their deal."

If the sale goes through as expected, it would be the second time ownership changed since 2005, when previous ownership group Pittsburgh Brewing Co. filed for bankruptcy protection because it owed $2.6 million in unpaid sewer and water bills to the Pittsburgh Water & Sewer Authority.

Hickman has said Iron City Brewing is talking with several buyers interested in purchasing the Lawrenceville brewery site, a jumble of 22 buildings, constructed starting in 1868 and as recently as the early 1990s. Iron City Brewing is seeking historic landmark status for some of the buildings.

Hickman was part of an investment group that purchased the brewery out of bankruptcy in September 2007. That group included nearly 20 investors and was led by Connecticut equity fund manager John N. Milne and Jack Cerone, a Chicago lawyer who handled labor relations for former Pittsburgh Brewing owner Joseph Piccirilli.

Milne is serving a federal prison sentence for fraud and conspiracy to falsify the books and records of United Rentals Inc., an equipment rental company in Connecticut, while serving as its chief financial officer.

Milne was the third consecutive Iron City chief to go to prison. Former brewery owner Michael Carlow spent more than five years in a federal prison beginning in 1996 for masterminding a $31 million check kiting scheme that kept the brewery, a bakery and candy company afloat.

Carlow in 1992 succeeded Australian financier Alan Bond, who bought the brewery in 1985 with ambitions to build an empire. His dreams went flat when he went bankrupt under $4 billion in debt. He spent three years in an Australian prison for fraud.

29 Mar. 2011

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