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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.

Philippines. San Miguel Corp. planning P80 bln preferred shares offering

San Miguel Corp. (SMC) has unveiled a plan to raise some P80 billion from the sale of preferred shares, the diversified conglomerate said in a disclosure to the stock exchange on January 14.

SMC intends to seek regulatory approval for the shelf registration of up to P80 billion worth of Series 2 preferred shares, or 1.066 billion shares at a price of P75 apiece. The shares will be issued for a period of three years.

The first tranche of the offer will involve the sale of 400 million preferred shares, yielding up to P30 billion, San Miguel said.

The company, however, did not indicate the timing of the issuance or how it intends to use the proceeds from the share sale.

SMC President and Chief Operating Officer Ramon S. Ang had said in October the company may raise as much as $1 billion from the sale of preferred shares to repay dollar debt.

In September, SMC raised P33.5 billion by selling preferred shares at P75 apiece to partly refinance P54 billion worth of similar securities due that month. Investors swamped that offering, which was five times oversubscribed.

San Miguel has some $13 billion equivalent of bonds and loans outstanding, according to data compiled by Bloomberg. Of that, US currency notes total $6.8 billion, with a weighted average fixed coupon of 5%.

Meanwhile, Mr. Ang on January 15 said the conglomerate will partner with Japan’s Kirin Holdings Co Ltd if it bids for SABMiller PLC’s Grolsch and Peroni beer brands.

Mr. Ang told Reuters San Miguel was still interested in acquiring the European beer brands through San Miguel Brewery Inc. Kirin owns nearly 50 percent of San Miguel Brewery.

He did not say whether his company had already submitted a bid.

Anheuser Busch InBev which agreed to buy SABMiller has sought bids for Grolsch and Peroni and attracted a number of international suitors.

SMC plans to at least double its revenues to $40-50 billion in the next five years, through organic growth and acquisitions, Mr. Ang had said in October.

Led by Mr. Ang, the country’s largest food and beverage company started an aggressive diversification program in 2007 that saw the conglomerate make a series of acquisitions in attractive growth sectors such as infrastructure, fuel and oil, energy, telecommunications and banking.

21 Jan. 2016

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