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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.

Russia. No Beer to Be Sold After 11

The State Duma approved additional restrictions on alcohol sales in the country Thursday that will end sales of beer at night and from kiosks.

The law is expected to fully enter into force by January 2013, but it is already causing shock waves in the industry. Danish brewer Carlsberg, which owns local market leader Baltika, saw its stock fall to a near four-month low on Wednesday.

Under the proposed law, stores will be banned from selling drinks that contain more than 0.5 percent alcohol between 11 p.m. and 8 a.m. Currently, the threshold is beverages containing 15 percent alcohol or more.

Experts said it is unlikely that the restrictions will have an impact on alcohol consumption because people will simply buy the products earlier or illegally.

“This bill won’t reduce alcoholism in the average citizen, but it won’t harm the consumer and the producer either,” said Vadim Drobiz, director of the Research Center for Federal and Regional Alcohol Markets. “Nighttime crime will be reduced as well as nighttime hooliganism.”

The bill also expands the number of places where alcohol consumption is prohibited. These places will now include courtyards, elevators, building entryways, playgrounds, forests, parks and beaches.

Current laws punish drinking in restricted areas with a fine of 100 to 700 rubles ($3.57 to $28), while being drunk in these areas can lead to a prison stay of up to 15 days, Vedomosti reported.

Train stations and kiosks will be banned from selling any alcohol under the new bill. These semi-permanent outlets now account for one-third of Russia’s beer sales — or about $6 billion, Reuters reported.

Some industry representatives welcomed the restrictions.

“Kiosks are a humiliating presence for a large city such as Moscow,” said Alexander Romanov, general director of the Alcohol Manufacturers Committee. “Kiosks that sell alcohol should not exist.”

“None of these kiosks have up-to-date permits for making sales if they ever had them,” he said.

But other industry representatives fear that the ban on alcohol sales will make kiosks unprofitable and will force them to close. Alcohol sales account for almost half of the profits for kiosks, SABMiller’s Kirill Bolmatov told Vedomosti.

Vyacheslav Kuzmin from the Union of Russian Brewers warned about the disappearance of kiosks from rural areas.

“They are often the only source where people can buy food products,” Kuzmin said. “It will hit people hard.”

Earlier reports indicating that kvas, which typically contains 1.2 percent alcohol, could be classified as alcoholic and also banned, sparked fears among consumers and producers. The Federal Alcohol Market Regulatory Service quickly reassured that the traditional fermented-bread drink — as well as kefir — is not covered by the new bill.

“Nobody is going to label kvas or kefir as alcoholic products,” the service’s press office said.

Kvas has seen a spike in demand in recent years with sales of the drink rising seven to eight times since 2005, according to an estimate by beverage company Deka.

14 Jul. 2011

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