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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.

Huge demand for EABL’s stake in Tanzania Breweries

* Kenyan brewer raises $76.42 mln in share sale
* Foreign investors show strong appetite for shares
* Locals buy more than half of shares on offer

East African Breweries said on Friday the sale of its 20 percent stake in SABMiller's Tanzanian unit was heavily oversubscribed, with foreign investors showing plenty of appetite.

Analysts said Tanzania Breweries Limited enjoyed a huge lead in a market seen as offering significant growth opportunities, hence the massive investor appetite for the shares of a firm that has a record of making good profits.

EABL, which is controlled by Britain's Diageo, was selling 59 million shares in Tanzania Breweries, after it purchased a stake in rival Serengeti Breweries in order to go it alone in east Africa's second largest economy.

"Applications were received ... for a total of 144,462,780 shares, representing approximately 245 per cent of the number of offer shares available," EABL said in a statement.

Foreign investors applied for a total of 111,852,540 shares, which were priced at 2,060 shillings ($1.30) per share, but were allocated 26,375,453 shares, or 44.72 percent of the shares on offer.

Local investors applied for 32,586,640 shares and were allocated all the shares, equivalent to 55.24 percent of the total shares on offer, with investors from other east African nations applying for and picking up 23,600 shares or just 0.04 percent of the stake on offer.

EABL raised 121.5 billion shillings in the share sale. A recent initial public offering in Precision Air attracted demand for less than half of the shares on offer as investors kept hold of their cash in order to buy into Tanzania Breweries.

Shares in TBL, which controls about 70 percent of the beer market in Tanzania, were sold at a 12.4 percent premium, according to brokers. Subscriptions to the placement of the shares in TBL ran from Nov. 4 to 25.

SABMiller owns 52.83 percent of TBL, while 6.04 percent of the shares in the company were listed on the Tanzanian bourse prior to the placement of the 20 percent stake.

Tanzanian pension funds own 8.83 percent of TBL, while other shareholders are Unit Trust of Tanzania (4.49 percent), the Tanzanian government (4 percent) and International Finance Corporation (3.81 percent). ($1 = 1590.0000 Tanzanian shillings)

10 Jan. 2012

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