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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.

US: Anheuser-Busch InBev “working proactively” with DoJ over Modelo deal

Anheuser-Busch InBev has said it is “working proactively” with regulators over its US$20.1bn acquisition of Gruppo Modelo, while fresh concerns have been raised over the deal.

A company spokesperson told just-drinks yesterday (14 November) that the firm believes the transaction “should be approved” and still expects it to close in the first three months of 2013. "We are working proactively with regulators to move through the review process efficiently," the spokesperson said.

It comes after US not-for-profit advocacy group the American Antitrust Institute (AAI) argued ths week that the authorities should stop the deal to prevent “the march towards a US beer monopoly”.

“If the proposed transactions amount to a de facto merger between A- B InBev’s and Modelo’s product portfolios in the US, it is likely to create serious anti-competitive effects,” the AAI said.

It added: “In local markets with large Latino populations, current concentration levels and the post-merger increases may be even higher than they are nationally. The potential anti-competitive effects include reduced product variety and higher prices for consumers.”

Meanwhile, analyst Trevor Stirling of Bernstein Research said it is a “material possibility” that Modelo will have to off-load its Piedras Negras brewery, with 10m hectolitres capacity, to satisfy the Department of Justice.

“However, we do not view this as a deal-breaker as we think the crown jewel remains the Mexican domestic beer business for A-B InBev,” added Stirling.

It also emerged yesterday that the UK's Office of Fair Trading has approved the deal. Details of the decision have yet to be published, but are expected next week. An OFT spokesperson told just-drinks the full text would be made available after “both parties have a had a chance to redact confidential information” from the papers.

A-B InBev also received clearance for the deal from the Canadian Competition Bureau in September.

15 Nov. 2012



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