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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.

Malaysia. Carlsberg expects a tough year in FY16

Carlsberg Brewery Malaysia Bhd (Carlsberg Malaysia) expects a tough year in the financial year ending Dec 31, 2016 (FY16), given the slower economic growth in Malaysia and Singapore compounded by the increase in the excise duty.

"We see subdued consumer sentiment; spending power will not come up during the year," Carlsberg managing director Henrik Juel Andersen told reporters after the company's annual general meeting today.

He said even though it is a tough year moving forward, there are still opportunities for growth. He added that the brewer will not reduce its investment in its brands.

Andersen also expressed his disappointment towards the excise duty hike on March 1, which he described as "hefty", and favours the importers of foreign beer and liquor over local beer producers.

The new tax regime saw the quantum of a tax increase on locally produced beer, stout, and cider, ranging from 10% to 99%.

"It has forced us to increase our price," he said, adding that this may encourage an illicit trading of beers.

The group posted an increase in net profit by 18.36% to RM74.48 million in its fourth quarter ended Dec 31, 2015 (4QFY15) compared to the corresponding quarter in 2014, due to effective revenue optimisation, better product and price mix, as well as prudent cost management across the group.

For its full year (FY15), Carlsberg registered a slight increase of 2.05% in net profit compared to a year ago.

At 4.13pm, shares of Carlsberg traded unchanged at RM13.78, for a market capitalisation of RM4.25 billion.

22 Apr. 2016

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