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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.

Kenya: Diageo’s East African Breweries’ H1 sales rise

Diageo's African beer subsidiary, East African Breweries, has survived a consumer shift towards lower-priced beers to report higher net sales in its fiscal half-year.
East African Breweries (EABL) said yesterday (17 February) that net sales in the six months to the end of December increased by 10% to KHS20.46bn (US$250m). Volume sales increased quicker, by around 12% on the same period of the previous year, as consumers traded down to cheaper beers following duty tax rises in the region.
Local brands such as Senator in Kenya and Tusker in Uganda reported double-digit sales increases for the six months. Guinness also increased net sales by 6%, although volumes have been held back in the last year due to price increases.
Higher tax charges led the Diageo-controlled brewer to report a reverse in profits for the half-year. Net profits slipped by 1.7% to KHS4.15bn, although operating profits increased by 14.5% to KHS6.1bn.
Despite the pressure on net profits, EABL and Diageo have been in expansive mood.
The brewer's cashflow sank during the six-month period after it used cash reserves to buy a 51% stake in Tanzania's Serengeti Breweries for KHS4.9bn. Serengeti is the second largest brewer in Tanzania, behind SABMiller-controlled Tanzania Breweries, but has been rapidly increasing its market share.
Separately, just-drinks understands that Diageo's EABL is seeking to increase its presence in Southern Sudan, which last month gained independence. The group is considering building a production base in the country.
A Diageo spokesperson declined to comment specifically on the plans, but added: "Southern Sudan is an important market for us. We constantly analyse and assess the effectiveness of our routes to market in light of the competitive environment wherever we do business. Southern Sudan is no different."
Last year, SABMiller said that it would double beer production and increase soft drinks capacity by more than five times at its own brewery in Southern Sudan.

18 Фев. 2011



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