Sweet tooth for beer

Had it not been for the contribution of its Chinese brewing operations which realised a turnover of more than US$131.6 million according to the latest annual report, the turnover of the Chocolate Products (Malaysia) Bhd would have been significantly lower than the US$179 million reported. The group ventured into China in 1995 where it has nine breweries. The Chinese operations are expected to contribute significantly to the group’s performance in the medium turn even as its chocolate operations are rationalised because the effect of the severe economic downturn in Malaysia will continue to dent earnings.

Strange bedfellows

Coca-Cola’s and PepsiCo’s Indian officials have come together to protest against excise duties which are in excess of related goods and commodities. An Indian Soft Drink Manufacturers’ Association representative said that it was surprising that the government decided to tax the industry at 40% which is significantly higher than the 8% duty put on sugar confectionery and fruit juices and the 16% duty placed on mineral water, instant coffee and chewing gum. It is believed that together Coke and Pepsi have accumulated losses of US$138 million. Growth is at an all time low of 5% against last year’s growth of 25%.

Leader in the GMO field

The state of South Australia is fast becoming an important centre for research into genetically modified crops. Last year genetically modified field peas and potatoes were trialled.
The University of Adelaide’s research programme included 600 transgenic wheat plants and 1,500 transgenic barley plants which were trialled at trathalbyn.
This year paddock trials are scheduled for genetically modified barley, wheat, indian mustard and canola. Most field work is reserved for genetically modified canola by Aventis Crop Science and Monsanto Australia.
Peter Langridge, professor of plant science at the University of Adelaide, urged a rational debate on GMO and said that the state of South Australia should resist calls for a moratorium..

On the move

They are sitting on packed suitcases. Lion Nathan announced plans to move headquarters and its primary share market listing from Auckland to Sydney. This move across the Tasman is supposed to make access to global financial services and markets easier. More-over, the company derives more than 80% of its profits from Australia where it has 70% of its assets. Chairman Douglas Myers explained the change of domicile would bring a 20% increase in dividend payment which could rise to A$8c from NZ$8c. Lion Nathan announced half-year profits up 17% to NZ$97.1 million (US$45.4 million) for the six months to 29 February. For the same period, Lion Nathan’s share of the Australian beer market has risen by 0.5% to 41.6%.6% compared with Foster’s 85%. From presently 5.9%..

Gone are the days...

... when Australia’s maltsters were sitting on their hands. However, fresh are the memories of the 80s’ calamity when Australia’s maltsters witnessed a decline in exports. As Lesley MacLeod, Barrett Burston Malting Co. pointed out in her presentation at the IOB Asia Pacific Section’s conference in Singapore, Australia’s maltsters had a 32% share of the Japanese malt market in 1981 and only 19% in 1996.
The 80s witnessed a change in brewing parameters - alcohol content, adjunct choice, malt usage etc. - which the maltsters were unable to comply with immediately, having stuck to their barley varieties for too long. Since then, the industry has taken a keen interest in barley breeding so that it can better keep up with market changes. The same applies to pesticides. (BIL).
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Endangered species

The beery Aussi has become an endangered species. Beer is rapidly loosing its status as the national drink after a peak in consumption in 1981 when Australians aged over 18 years consumed 129 litres of beer each. After a constant decline they now consume about 95 litres per capita. 68% of males and 48% of females are regular consumers with 14% of males and 6% of females drinking every day. People aged over 60 years are more likely to drink every day than any other age group (31% of males and 18% of females). These figures were revealed in the Australian Institute of Health and Welfare’s "Statistics on Drug Use in Australia".

What a surprise

After having made two (failed) attempts to buy big (see BWI 2/00), Tasmanian brewer J. Boag & Son itself became the target of a take-over bid. At the end of April, San Miguel Corp. (SMC) of the Philippines made an A$92 million offer (US$53,3 million) for Boag’s which was just too good to be refused.
After all, SMC already controlled 14.9% of Boag’s. At the beginning of the 1990s, SMC showed an interest in Tasmania. In those days, the Cascade Brewery was the object of desire. However, SMC’s bid was considered too low and thus CUB could mount a successful take-over in January 1993.
Boag’s and the pub real estate - the rest of the Cascade group - were bought by Philip Adkins’ company Cadenza. Through Cadenza he holds a significant slice (about 30%) of Boag’s..

Expanding beverage market

The pickup in economic activity and rising exports have been positive for the food and beverage industry in Switzerland in 1999.
Non-alcoholic beverages account for almost three quarters of the industry’s turnover. In 1980, it was only two thirds. Volume growth of non-alcoholic beverages is largely due to rising sales of mineral water.
The introduction of a standard tax rate on spirits has put importers of these beverages on a par with domestic producers, with the result that import prices have dropped significantly. Swiss producers plan to counter the stronger import pressure with qualitative advantages and increasing emphasis on exports.
1999 was a year with a very good wine harvest. To reduce stocks, sales prices were lowered. Their market share rose by 1.8% to 85%..

Small breweries welcome

The South Korean Fair Trade Commission has announced that it will liberalise start-up conditions for new breweries which will clear the way for the establishment of micro breweries. Currently, prospective brewers face heavy start-up capital costs as a storage tank size of 60,000 hl is required. In comparison, Japan allows tanks of just 600 hl. The long-term imperative is to be on par with Japan. The official Yonhap news agency reported that in 1999 per capita intake per category was 59 360ml bottles of soju (traditional Korean spirits), 61 half-litre bottles of beer and 1.28 half-litre bottles of whiskey. However, the report said that this year alcohol consumption is expected to fall by 8.7%.

Greater focus on core businesses

Fraser&Neave (F&N) has said that it will focus on its core businesses and new ventures as part of a its strategy to restore the company to its pre-Asian Crisis performance. The group has recently reorganised its management and acquired selected businesses, including a 60% stake in United Food’s ice cream business in Thailand. It has also divested loss-making F&N Coca Cola. A strong earnings recovery in the brewing division will be possible if Asia Pacific Breweries, in which F&N has a stake, restructures its China operations.