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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.

UK court says SABMiller shareholders can be split into two classes

SABMiller shareholders can be treated as two separate groups when they vote on the brewer's 79 billion pound ($103 billion) takeover by Anheuser Busch InBev, a court in London ruled on Tuesday, granting a request from SAB aimed at making the vote as fair as possible.

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The marriage of the world's largest beer makers was agreed last year with an offer of 44 pounds per share in cash for general shareholders and a discounted cash-and-stock offer aimed at the largest two - Altria Group and Bevco - to help them avoid large tax bills.

The agreement grew contentious this summer after a fall in the British currency increased the value of the cash-and-stock offer above that of the cash offer. AB InBev sweetened its offer in July after several shareholders, including activist hedge funds, pressured SABMiller to seek a new deal.

Both brewers' boards have recommended AB InBev's "final" offer, and SAB requested that Altria and Bevco -- which have already signalled their support -- be treated as a separate class.

Justice Richard Snowden said on Tuesday it was an understandable request since it lowered the risk of delays or challenges from dissenting shareholders who might have challenged the vote as unfair given that Altria and Bevco has agreed to a different offer arrangement.

With the judge's ruling, the deal will require 75 percent approval by SAB shareholders, excluding Altria and Bevco, which together control about 40 percent of the shares.

"I have jurisdiction to order a meeting of public shareholders to be summoned that does not include Altria and BevCo," Snowden told the court.

Altria and Bevco, a vehicle of Colombia's Santo Domingo family, will therefore give their support separately, SABMiller and AB InBev said.

Prominent investor Aberdeen Asset Management had voiced opposition to the revised offer, saying it still undervalued the brewer of beers including Castle Lager, which has a strong presence in fast-growing markets of Latin America and Africa.

SAB also said more details about the implementation of the deal were expected to be published along with transaction documents on Aug. 26.

There are planned meetings of shareholders of each company on Sept. 28. If approved, the deal is expected to close on Oct. 10.

The new entity will be almost wholly controlled by executives from AB InBev, maker of beers including Budweiser and Stella Artois.

SAB's shares were down marginally at 4,375 pence at 1159 GMT while AB InBev's stock was up 1 percent at 112.10 euros. ($1 = 0.7663 pounds) (Reporting by Martinne Geller in London; additional reporting by Noor Zainab Hussain and Esha Vaish in Bengaluru; editing by Keith Weir and Susan Thomas)

23 Авг. 2016

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