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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.

Anheuser-Busch InBev, Modelo deal could pave way for SABMiller ‘mega-merger’

Anheuser-Busch InBev's US$20.1bn acquisition of Grupo Modelo is a “test case” in seeing how competition authorities would react to a “mega-merger” between the Belgium brewer and SABMiller, according to a new report.

The 81-page study – Global Beer: the Road to Monopoly – published by advocacy group the American Antitrust Institute, examines recent consolidation in the sector and assesses its future make-up. A-B InBev last week said it is “working proactively” with US regulators over the Modelo deal, having had approval in Canada, the UK and Mexico.

“The manner in which the DOJ (Department of Justice) treats the A-B InBev-Modelo transaction will provide clues to how it might treat a merger of the two leading suppliers of the US market and the world market,” the report says.

In July, A-B InBev's CEO, Carlos Brito, argued that the combination of A-B InBev and Modelo will make "no change" to the US beer market.

On the long-rumoured merger between A-B InBev and SABMiller, the report highlights that “it is becoming more difficult for beer companies to expand their businesses without entering new markets and absorbing existing facilities”.

It adds: “Some analysts see this as a good geographic match for the two companies. A-B InBev is strong in North America and China. SABMiller has greater international presence, particularly in high-growth emerging markets in Latin America and Africa.”

However, the report's author, Bernard Ascher, also flags one commentator's view that a combination of the “bitter rivals” would be like “a merger of Catholics and Protestants”.

"The two giant firms are keen rivals with different strategies and business cultures," Ascher says in the report. "Both firms, however, are publicly owned and need to show profits and growth to their stockholders at a time when it has become more difficult to grow without mergers and acquisitions”.

Ascher also suggests that further acquisitions of US craft brewers by larger companies is likely, following A-B InBev's purchase of Goose Island last year.

22 Nov. 2012



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