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News
AROUND THE WORLD
“standfirst”>USA – Blavod Extreme Spirits and Suntory International Corp (the US subsidiary of Suntory Limited) have formed a joint-venture company to service the US market…Russia – International brewing megolith InBev has completed its acquisition of the St. Petersburg-based Tinkoff brewery…
Americas
USA
Blavod Extreme Spirits and Suntory International Corp (the US subsidiary of Suntory Limited) have formed a joint-venture company to service the US market. The new 50:50 partnership will be called Diamante Spirits LLC. Blavod will be responsible for the creation, marketing and distribution of new products, while Suntory will provide the funding for the development, operating and marketing costs of the new company. Blavod has reported that trading in Q1 of the current fiscal year is showing significant volume increases (against Q1 last year), up by 38% in the UK and 206% in the US.
Meanwhile, leading soft drinks producers in the US have reached a voluntary agreement to limit the sales of soft drinks in schools. The move by Coca Cola, PepsiCo and other producers follows increasing pressure on the industry over its role in childhood obesity.
The agreement will mount pressure on soft drinks manufacturers to take similar action in Europe, where campaigns are already underway in several countries to ban sugary soft drinks in schools.
Chile
Good news for Chilean producers with the results that exports of Chilean wine of designated origin rose by 21% in value during H1 2005 to US$325.4m, according to figures from the national agricultural policy and research office (ODEPA). In volume terms, export wines of designated origin were up by the same figure of 21% over the same period to 114.5m litres.
Europe
France
More disagreements in Beaujolais as wine growers try to find the best course of action to take to stem growing overproduction in the sector. Stocks of unsold wine currently stand at more than double normal levels, at around 700,000 hectolitres, despite a collapse in the prices to around €70/hl, compared to €170/hl. The Beaujolais trade body (UIVB) is advocating a reduction in authorised annual yields from 57 hectolitres/hectare to 52 hl/ha but the newly-formed Beaujolais Tous Ensemble (BTE) association is against the move. However the BTE and UIVB do agree on plans to uproot 3,000ha of vines from less successful sites.
Denmark
Recent figures from Denmark have confirmed Carlsberg’s claim that the country’s beer market is in decline. The Central Customs and Tax Administration has announced results that show that the volume of beer consumed in the first half of 2005 has dropped by 5% year-on-year, following a decrease of 6% last year.
Tax cuts instigated in October 2003 benefited spirits with consumption rising by 33% in 2004, at the expense of the beer category.
Russia
International brewing megolith InBev has completed its acquisition of the St. Petersburg-based Tinkoff brewery, paying €167m for a 100% stake in Tinkoff. The purchase will immediately add 2.3m hectolitres of capacity to InBev’s current Russian platform, which will now be capable of brewing some 4.8m hectolitres.
More Russian beer consolidation news with the announcement that Heineken has signed an agreement to acquire Ivan Taranov Breweries (ITB). As part of the deal it is possible that Heineken may also acquire Severnye Vetry Distribution (SVD), the distribution arm of ITB, which comprises 23 companies across Russia. The move will see Heineken’s share of the Russian beer market increase to 14%, with volumes of over 11.4m hectolitres.
Sweden
Systembolaget has posted a rise in sales for July of 5.5% year-on-year, measured in pure alcohol. The state alcohol monopoly attributes the rise to fine weather in the first half of the month and reduced cross-border shopping. Sales of spirits dropped 1.6%, with wine falling a further 6%. Sales of strong beer were up, however, by 8.5% with cider also rising 10.6%. Mixed drinks saw 12.9% growth and alcohol-free beverages were up most at 25.2%. For the calendar year so far, sales are up slightly by 2.2% year-on-year.
UK
Brewer Adnams has posted very positive figures for the first six months of this year showing a pre-tax profit leap to £2.3m from £832,000 for the same period last year. Turnover for the same period rose slightly from £20.5m to £21.1m.
Asia
China
Rising sales for Tsingtao Brewery have seen its first half net income leap 20% to Y173.64m (€17.54m) compared with Y144.8m the previous year. Turnover for China’s largest brewer was up 15% to Y4.46 billion, despite battling increased competition in the country’s beer market and rising transportation, power and raw materials costs. The company has revealed plans to make higher-margin beer to boost margins. Anheuser-Busch holds a 27% stake in Tsingtao Brewery’s, making them the company’s biggest non-government shareholder.
Japan:
Profits for Japan’s three largest brewers Kirin, Asahi and Sapporo have been hit by slow sales and high expenses. The breweries may be forced to downgrade their full-year earnings projections yet again, having already lowered their forecasts once this year following lower than expected first half figures.
Despite favourable sales of its Nodogoshi Nama third beer brand, Kirin is expecting a drop in group operating profit for 2005 of around JPY1bn (€7.44m) below its initial projection of JPY110bn. Asahi has also reduced its forecast for group operating profit by JPY1bn from its initial projection of JPY101.5bn. Meanwhile, Sapporo Holdings reduced its operating profit projections by 42% year-on-year to JPY13.7bn (€101.9m) as it plans to increase its group promotional expenditures by JPY8.9bn from last year.
Australia/Oceania
Australia:
In spite of flat market conditions in Australia, J Boag and Son Ltd, the Australian beer arm of Philippine food and beverage group San Miguel Corporation, has posted a 13% increase in revenues to A$54.04m (€33.44) in the period from January to July 2005. The Tasmania-based brewer saw sales volume rise by 17%. Boag’s Draught brand saw the strongest volume increase of 48% following the brand’s launch in the mainland beer market last year. Boag’s Premium Light brand grew by 13% in volume.
South Africa:
Stellenbosch-based wine and spirits company Distell has reported an increase in headline earnings of 34.5% to ZAR482.2m (€60.86m) for the year to 30 June 2005.
The result represents compound annual growth in headline earnings of 23.5% over the four years since Distell formed. Before tax profits were up 38.5% from ZAR485.8m to ZAR672.8m, with sales revenue rising 7% to ZAR6bn and sales volume up by 1.8%.
© db September 2005