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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.

Myanmar. Heineken takes back Tiger and ABC beers

Two of Myanmar’s best-loved beer brands, Tiger and ABC Extra Stout, were officially returned to Dutch beer-maker Heineken yesterday after years under the ownership of local giant Myanmar Brewery.

The two brands will now be made under the portfolio of APB Alliance Brewery Company (APB-ABC), a joint venture between Heineken and local firm Alliance Brewery.

Myanmar Brewery gave up its rights to the brands when it split from Singapore-listed Fraser and Neave last year after a drawn-out ownership dispute. F&N owned the rights to produce both beers.

Last August, the licences expired and Myanmar Brewery has not sold ABC or Tiger since. In the past, Heineken held both licences and has now taken them back.

“As the licence holder, they did a good job penetrating the market to ensure [these beers] are significant brands to Myanmar drinkers,” said Lester Tan, managing director of APB-ABC.

Tiger and ABC will now be brewed at APB-ABC’s new US$60 million brewery in Hmawbi township which opened in July last year.

When they return to the shelves, the beers will look a little different – they have been re-designed to reflect a more modern look with a stronger quality, said Mr Tan, adding that the ingredients and the taste will remain unchanged.

“Currently our factory can produce 25 million hectolitres per year, but amid huge demand for Heineken brands we are in the process of raising the capacity to produce 45 million hectolitres for all the four brands under APB-ABC,” he said.

The other two brands are Heineken and a new, locally produced beer called Regal Seven which will target the mainstream market, competing head-to-head with Myanmar Brewery’s Myanmar Beer.

Mr Tan said his company has contracts with around 150 beer stations and is selling bottles and cans to over 4000 stores. This is very low compared with the number of stations and shops across the country, he said, but growth is held back by brand competition laws.

Hiroshi Fujikawa, Myanmar Brewery’s CEO, told The Myanmar Times last year that losing Tiger and ABC was a blow. “It is always sad to say goodbye to something you have become familiar with, but it’s also important to innovate and to take on challenges,” he said, declining to discuss specific details of the contract.

“There were no licence fees. Those brands belonged to Heineken – it was their right to terminate the contract, so we had to give it up.”

31 Mar. 2016

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