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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.

drinktec

Philippines. San Miguel Brewery sees strong profits

San Miguel Brewery, Inc. (SMB) could book P12 billion to P15 billion in net income by the yearend, with the company already netting P4 billion during the first quarter, its chairman said.

“I think SMB is doing very well [because] for the first quarter alone, net income is P4 billion. And that’s not the peak season yet, usually Christmas season and summer,” its Chairman Ramon S. Ang told reporters after a stockholders’ meeting in Pasig City on Monday.

The beer subsidiary of San Miguel Corp. managed to grow its net income by 23% from the P3.3 billion posted a year earlier, as new campaigns further boost consumption of its products.

The company’s revenues rose 23% to P23.3 billion, while sales increased 25% to P20.3 billion, following a 25% growth in volume to 51 million cases.

“In the Philippines, the company introduced new campaigns backed by consumer and trade programs to strengthen market leadership and further generate consumption,” SMB noted in a statement.

Net income from the company’s Philippine operations alone jumped 18% to P3.8 billion in the first quarter of the year.

SMB also registered improved results in 2015. The company posted a net income of P13.5 billion, after increasing its consolidated revenues by 4% to P82.4 billion and operating income by 3% to P22.6 billion.

When asked about expansion plans for the beer business, Mr. Ang said: “The beer business does not need too much expansion or what. It’s already doing very very well.”

Ang is bullish about its premium beer and non-alcohol beverage business this year.

“We have 97-percent market share… In fact, our SMB premium beer is doing very, very well. Even in international market, our SMB premium is doing very, very well. We are in every segment,” he said.

Mr. Ang also downplayed the recently announced joint venture of rival Asia Brewery, Inc. and Heineken International B.V. for the local production of the latter’s products.

“In the beer business side, SMB does not need to do anything. We have been competing with every major beer maker in the world, none of them were successful in competing with us in the Philippines,” he said.

SMB is also expected to continue turning profits amid the liquor ban proposed by president-elect Rodrigo R. Duterte.

“Liquor ban is nothing new for us. Our volume in Davao is not affected at all. The liquor ban is up to 1 a.m. or 2 a.m., it has no effect on us,” Mr. Ang said.

1 Jun. 2016

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