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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.

Carlsberg To Boost Russian Operations As Profit Surges

Brewer Carlsberg A/S said Monday, as it reported a sharp rise in fourth-quarter net profit, that it will spend a up to DKK6.5 billion ($1.16 billion) to gain full control of brewer Baltika Brewery in a bid to swing its ailing Russian business back to growth.

Carlsberg, the world's fourth-largest brewery group, gave a cautious guidance for the current year, even as it said net profit rose strongly, helped by a temporary stocking effect in Russia as well as by cost cuts, a better price mix and solid growth in its Asian markets.

For 2012, Carlsberg expects a slightly-growing adjusted net profit, while earnings before interest and tax are seen at the same level as in 2011: A single-digit beer volume decline in Northern and Western Europe is seen balanced out by continued cost cuts, growth in Asia and a reversion to modest growth in Russia, helped by the full acquisition of Baltika and the replacement of its chief executive and several senior managers.

Carlsberg, which holds a majority of about 85% in Baltika, intends to buy the rest of the shares at a net cost of a maximum of DKK4.4 billion, and then delist the company.

"Full ownership of Baltika will give the Carlsberg Group greater operational flexibility," it said, adding that the transaction--expected to complete in May--will be immediately earnings-enhancing.

St Petersburg-based Baltika is the largest brewery in Eastern Europe, and its Baltika-branded beer the most widely sold in the vast Russian market.

Carlsberg Chief Executive Joergen Buhl Rasmussen said the company's performance in Russia was "unsatisfactory" and it would aim to recover market share lost to its peers in the past year, as it abstained from taking part in a large-scale promotions to protect its margin. But he added that, if market dynamics don't change as predicted during 2012, the brewer may step up promotions to match peers.

The Russian beer market was challenging in 2011, as steep inflation, high input prices and the introduction in 2010 of a hefty new levy on alcohol sales forced brewers to hike sales prices by as much as 30%, causing the market to contract as consumers turned to other drinks or scaled down their intake.

But stocking up in Russia ahead of the implementation on Jan 1, 2012, of a new tax, boosted Carlsberg's sold beer volumes in the country by 14%, helping the quarterly earnings surge.

Fourth-quarter net profit rose sharply to DKK912 million from DKK316 million, comfortably beating the DKK827.7 million analysts expected. Group sales rose 11% to DKK14.85 billion from DKK13.40 billion, slightly above expectations.

Sales growth was also driven by continued strong growth in Carlsberg's Asian markets and higher prices as Carlsberg pushed ahead with its gradual shift towards higher-premium beers. In the full year, the product mix improved 5%, it said, helped partly by 7% growth within the premium segment of its flagship Carlsberg brand.

At 1031 GMT, Carlsberg's shares were up 1.8% at DKK436.7, in an overall Copenhagen OMX C20 index, which traded up 1.3%.

23 Фев. 2012



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