Beat them or buy them

US brewer Anheuser-Busch, which owns 91.8% of the Budweiser Wuhan International Brewing Company in Wuhan, China’s 5th largest city, is said to be in exclusive talks with Tsingtao Brewery, China’s largest brewer, to increase its stake
in the company (5% in 2001). Shares in Tsingtao went up 19 per cent at the beginning of August after Tsingtao announced that it signed a pact with Anheuser-Busch to help Tsingtao develop its business in China. China is the world’s largest beer market after the United States and is believed to grow at about 6 per cent each year.
However, returns on investments are either very low or non-existent, write market observers at Canadean, because the market is expensive to supply. For many, going alone has proven very costly and often unprofitable.

Keep your customers satisfied

Sometimes desperate measured are called for. In order to keep prices down, Australia’s two biggest brewers, Carlton & United Breweries (CUB), which is part of the Foster’s Group, and Lion Nathan have reduced the alcohol content of some of their top selling beer brands. That way they benefit from a lower excise rate. According to reports, CUB has lowered the alcohol level of its brand Carlton Draught and Carlton Cold to 4.7% Alc./Vol., although the alcohol content of its best selling beer, Victoria Bitter, remains at 4.9% Alc./Vol. The cuts in alcohol help to curb rising beer prices and should keep customers happy, especially since a spokesperson for CUB claimed that the changes were minor and equivalent to a teardrop of alcohol per can.

A bloke thing

Real men may not eat quiche, but in Australia they go for pre-mixed spirits, malternatives, or Ready-To-Drink mixes or whatever you like to call those girlie drinks which taste so sweet that you can’t feel the alcoholic bite. Figures released by the Distilled Spirits Industry Council of Australia show that men account for 6 times as many sales of pre-mixed drinks than women. That’s why Australian brewer Lion Nathan decided not to leave this segment unattended for much longer. It set up a new company, Indio Beverages, to expand its product range beyond the beer market. In March, Lion Nathan released three new RTD brands - Nitro, Axel, ESPI Spritzer - which contain guarana, ginseng and caffeine among others..

Small wineries threatened with extinction

With only two corporations, Coles Myer and Woolworths, controlling most of Australia’s bottle shops - i.e. places where you can by alcohol - it is feared that many small wineries will be squeezed out of the industry. At present there are 1318 wineries in Australia, having risen from 990 in just five years.
However, this figure is mildly misleading since four groups
- Foster’s through Beringer Blass, Southcorp, BRL Hardy and Orlando Wyndham - are dominant and are supported by Coles and Woolworths. Small wonder that that their share prices reflect their market dominance.
Comparing share price to company earnings for 2002, Foster’s has the lowest multiple ranging from 16 to 19 times compared with Southcorp and BRL Hardy’s multiples beyond 20..

Lucky winners

It was a fertile season for US brewers. First came the UK’s Brewing Industry’s International Awards many of which they won. Next came the Australian International Beer Awards in which the Boston Beer Company took home two awards. Samuel Adams Double Bock was awarded both the Grand Champion Trophy and the Champion Lager. The Champion Stout trophy went to Rogue Imperial Stout, brewed by Rogue Brewing Company in Newport, Oregon. Three of the eleven awards were given to a newish Australian brewery by the funny name of Little Creatures Brewing in the town of Freemantle in Western Australia. The Best Packaging Award was won by First Harvest Ale from Carlton & United Breweries (we reported).

Mad as a brewer

As mad as a hatter? Oh ye faithful brewers, some of you can do even better or ... madder. For example, those about-to-be-certified brewers at Sydney’s Malt Shovel brewery. They launched a seasonal Australian White Beer at 5.0% Alc/Vol depicting a shark with a gaping mouth. We are still puzzled as to what could possible constitute an Australian White Beer. But the spiel these mad brewers have given it is real OZ. And the spiel is good. Here’s the story.
"The Mad Brewers of the Malt Shovel Brewery have created this Australian White Beer using purest Camperdown water, fresh wheat, extremely pale malt and Willamette hops. Top-feeding fermentation gives a naturally cloudy appearance and a creamy head. These fanatical fundamentalists of beer also share a passion for Australiana..

Cost cutting 1

Since November 2001 Coca-Cola Amatil has undertaken a major cost cutting review and already identified at least A$30 million in savings, including corporate office and Austral-ian business costs. Many jobs could go. Coca-Cola Amatil also announced that it plans to launch new products in response to changing consumer tastes. Up to nine new beverages are planned although vanilla coke was not one of them. In June Coca-Cola Amatil launched a diet Coke with lemon flavour into the Australian market.

Focus on new plants: Stepan Razin brewery, St. Petersburg, Russia CSS - A new process in combined beer stabilisation

A sharp increase in the lengths of distribution channels and, consequently, in the demands on the minimum shelf life of beers
- this is a challenge which the combined stabilisation system, CSS, has been set to cope with.

The Stepan Razin Brewery near the city center of St. Petersburg presently produces 1.7 hectoliters (1.45 US barrels) of beer annually, employs its own malt house and delivers its beers to nearly every region of Russia. The brewery’s fast growth in output has meant a sharp increase in the lengths of its distribution channels and, consequently, in the demands on the minimum shelf life of its beers. Since November 2001, Razin Brewery has installed the new and innovative, combined stabilisation system, CSS. In addition to the plant in St. EUR0.45/hl. 1).e.
.

Seeing is believing

Haven’t we heard this one before? "The developing beer market in India may soon get more fizz." The question is: how soon? Still, United Breweries, which is India’s major brewer and holds around 40 per cent of the 5.5 million hl beer market (2000), expects to raise its sales volume this year by 12 per cent.
With a population of over one billion people and a total of 57 operational breweries, India has a per capita consumption of just half a litre of beer. That’s why there is definitely room for growth.
South African Breweries (SAB), which has four breweries and around 11 per cent of the market, is also pushing for growth. SAB would like to develop quality portfolios of local as well as international brands in India and is not in favour of scrapping its acquired brands..

Coopers sells Adelaide Malting Company

The timing was immaculate. First Coopers built a new brewery, next it got out of malting. In June, the Coopers family and management sold the Adelaide Malting Company, which produces 75,000 tons of malt a year, to the grain handler AusBulk. The price was not disclosed. In 2001, Adelaide Maltings’ turnover had reached A$25 million. AusBulk was quoted as saying that it hoped to double the business by 2007 to produce 150,000 tons of malt. Coopers’ Managing Director Tim Cooper was also quoted as saying that the sale would allow the brewer to focus on its new A$40 million Regency Park brewery. AusBulk is going to go for a stock market floatation sometime this year. The capital-raising target had not been decided yet.