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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.

Heineken to invest 400 mln euros in Congo over 5yrs

* Seeks to upgrade Bralima brewery, build new one
* Sees strong growth potential in Congo beer market (Adds quotes, details)

Heineken (HEIN.AS) plans to invest 400 million euros ($561 mln) in its Bralima breweries in Democratic Republic of Congo over the next five years, to tap into the country's rapidly growing population, Bralima said on Wednesday.

Hans van Mameren, Bralima's managing director, said the outlook was positive despite uncertainity hanging over elections, as economic growth looked robust and any boost to infrastructure would see new markets open rapidly.

Bralima, which has been majority-owned by Heineken since 1986, has been operating in Congo since 1923 and makes the country's most popular beer, Primus.

Mameren said 250 million euros would be spent on renovating the original brewery in Kinshasa and building a new one 40 km (35 miles) away. Another 150 million euros will be used to buy equipment and improve other breweries across the country.

Congo is due to hold its second post-war election on Nov. 28 and the capital has already seen several violent protests.

Yet despite the political uncertainty and increased tensions, Mameren believes the country's economy will continue to grow, as will people's thirst for beer. "Even if they fight a war in parts of Congo, the economy keeps going," he said.

Congo's annual per capita consumption of beer is just 3 litres, as opposed to 20 litres in Nigeria and 30 litres in neighbouring Congo Brazzaville, according to Mameren.

Mameren said expansion is inevitable with population growth at around 3 percent and roughly one third of the country's 67 million people still unreachable by road.

"Everyone can see if you put a minimum of infrastructure in this country, it immediately opens up markets, it's all about access," Mameren said, pointing at vast roadless areas on a map.

When the road between Kisangani, in the centre of the country, and Beni, in the far east opened two years ago, Bralima's Kisangani brewery raised its output by more than 500 percent, he added.

Congo's vast infrastructure gap is far off being bridged but some roads are slowly being built on the back of foreign aid and a $6 billion minerals-for-infrastructure deal with China.

But transport remains the biggest challenge, with beer often travelling hundreds of kilometres by road or river to reach its destination, pushing up the price, according to Mameren.

"If you sell it around the chimney it's fine, but if you have to transport it... it's ludicrously expensive," he stated.

Although Congo's business climate remains one of the most hostile in the world and tax is as high as 40 percent, Mameren believes the nature of their product protects them from the worst excesses of corruption and government hassle.

"We're producing the cheapest luxury in this country; if there was a situation where there was no beer, the population would be very surprised to say the least," he said. ($1 = 0.712 Euros)

7 Sep. 2011

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