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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.

Diageo offers $215.94m to EABL to purchase KBL from SABMiller

Diageo's Kenyan subsidiary East African Breweries Limited (EABL) has secured a loan of KES19.5bn ($215.94m) to buy back its subsidiary, Kenya Breweries Limited (KBL), in which SABMiller holds 20% stake.

EABL is in turn selling its 20% stake in TBL, which was earlier owned by SABMiller, through a public offering and is expecting to receive KES7bn ($77.51m), Business Daily Africa reported. After purchase of the stake in TBL, EABL will be able to operate a wholly owned subsidiary in Kenya.

The two transactions will end the alliance which was formed around ten years ago between the two global brewers. The battle between the two giants in the Tanzania, Uganda and Kenya beer markets is growing tougher.

EABL is trying to strengthen its foothold in the Tanzania market through its subsidiary Serengeti Breweries, which is said to be the second largest brewer in the country.

The company is reportedly going to commission a new plant in Moshi, which is anticipated to nearly double Serengeti's brewing capacity. EABL's beer brand portfolio includes Tusker, President, Bell, Windhoek, White Cap, Pilsner, Tusker Malt and Senator.

On the other hand, SABMiller has recently come up with plans to invest $260m to expand capacity in its subsidiaries in Uganda, Ghana, Zambia and Tanzania. The group has seen growth of 34% this year in the African market through its signature brand, Castle Premium Beer.

29 Nov. 2011

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