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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.

Modelo Said to Seek Support for Foster’s Bid

Grupo Modelo SAB de CV (GMODELOC), the Mexican brewer of Corona beer, will seek board support for a possible joint bid with Molson Coors Brewing Co. (TAP) for Foster’s Group Ltd. (FGL) at a June 13 meeting in Mexico City, according to people with knowledge of the situation.

Such a proposal would need the backing of Anheuser-Busch InBev NV (ABI), which has nine seats on Modelo’s 19-person board and holds a 50 percent non-controlling stake. An offer would have to be at least $9 billion, or more than Foster’s current market value, said the people, who declined to be identified because the talks are private.

AB InBev is likely to tell Modelo at the meeting whether it will officially support or oppose a bid, said the people. The companies have discussed the idea, and AB InBev has raised concerns, including how the two companies would work together to manage a business based in Australia, one of the people said.

Jennifer Shelley, a spokeswoman for Modelo, declined to comment. Colin Wheeler, a spokesman for Denver-based Molson Coors, and Marianne Amssoms, a spokeswoman for Anheuser-Busch InBev, also declined to comment.

Molson Coors remains interested in pursuing a joint bid for Foster’s, said one of the people. If a joint Modelo-Molson Coors bid falls apart or is thwarted by AB InBev, then Modelo and Molson Coors could also pursue a bid on their own or with other partners, people said this month.

Modelo fell 1.57 pesos, or 2.2 percent, to 71.02 pesos in Mexico City trading as of 4:10 p.m. New York time. Molson Coors fell 52 cents to $44.22 in New York Stock Exchange composite trading.

Financing the Deal
The brewers are working with banks including Bank of America Corp. and Deutsche Bank AG on lining up financing for a potential purchase, said the people, who declined to be identified because the matter is private. Melbourne-based Foster’s has a market value of about A$8.8 billion ($9.3 billion).

Modelo is being advised by Bank of America and Greenhill & Co., and Molson Coors is working with Deutsche Bank, the people said. The Mexican brewer had about $2.27 billion of cash and cash equivalents at the end of March and no bank or bond debt.

AB InBev inherited its Modelo stake with the $52 billion purchase of Anheuser-Busch in 2008. Carlos Fernandez, chairman and chief executive of Modelo, sued to block the sale of the Modelo shares to AB InBev and lost in a ruling last year.

Fernandez has rejected selling control of Modelo to AB InBev and has said he’d be interested in buying back the stake. The company faces increased competition in Mexico after Fomento Economico Mexicano SAB sold its brewery to Heineken NV last year in a transaction valued at $7.35 billion.

11 Июн. 2011



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