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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.

Kirin Confirms Tender of Fraser & Neave Stake

--Kirin Holdings to tender entire stake in Fraser & Neave for S$1.9B
--Kirin then aims to buy back F&N's food and beverage ops for S$2.7B
--Kirin shares fall in Friday trading on fears about additional M&A costs

TOKYO--Kirin Holdings Co. (>> Kirin Holdings Company, Limited.) confirmed Friday that it has decided to tender its entire 15% stake in Fraser & Neave Ltd. (F99.SG) to an offer by Overseas Union Enterprise Ltd. (LJ3.SG), which aims to take control of the Singaporean conglomerate.

The Japanese brewer and soft drink maker has decided to tender its stake for 1.9 billion Singapore dollars ($1.6 billion). Kirin then aims to buy back F&N's food and beverage operations for about S$2.7 billion.

It remains to be seen if the plan will be successful, given a pending offer by a Thai billionaire. But investors reacted cooly toward Kirin's additional spending plans for the deal.

Kirin shares were down 2.4% at Y967 midday on the Tokyo Stock Exchange, after falling 4.7% to as low as Y944.

On Thursday, OUE, a unit of Indonesia's Riady family, said it plans to buy shares in F&N for S$9.08 each, trumping a S$8.88 per share offer worth US$7.2 billion by Thai billionaire Charoen Sirivadhanabhakdi.

Kirin said Friday the company "has agreed to accept the offer in respect of its shares in F&N, subject to certain conditions set out in OUE's announcement."

The move is in line with Kirin's main interest in food and beverage operations in Asia.

"We invested in Fraser & Neave because of our main interest in its food and beverage operations," Kirin President Senji Miyake has repeatedly said.

Kirin bought its 15% stake in F&N for about $970 million in 2010 as part of efforts to become a leading food and beverage company in Asia and Oceania. But questions on whether Kirin had any aspirations toward F&N had gone unanswered since earlier this year.

18 Nov. 2012

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