UK: Low-cost brews resembling beer but with no malt could catch on in developing countries

Low-cost brews resembling beer but containing no malt could catch on in developing countries where price is paramount, a British malt supplier said on January 16 according to Reuters.

"Cost is the major driver influencing current and future beer sales in developing countries and this could be at the expense of malt usage with beer type products becoming popular," said Tim Stonehouse, malt sales director for Muntons.Malt, often made from barley, is a key ingredient in the production of beer. Non-malt alcoholic brews are already popular in Japan where they are made from soybeans.

"Developing countries without local barley could move towards malt extract and/or beer type non-malt products to meet the demand for a low cost product," Stonehouse said in a paper issued at a Home-Grown Cereals Authority conference. Stonehouse said the malt industry also faced problems with overcapacity. He noted 1.84 million tonnes of capacity had been added between 2003 and 2005, including 835,000 tonnes in Russia.

He added that the brewing industry would be increasingly localised in the future, relying on local crops and supporting local economies. HGCA senior economist Julian Bell, in a separate paper issued at an electronic malting barley conference, said severe overcapacity across the European Union had made "production of malt for export (in the UK) increasingly unprofitable."

He noted that the UK had a good quality barley crop this year, reducing premiums for malting quality. "Reductions in domestic malting capacity coupled to a good quality crop across the UK have resulted in an increase in the UK surplus of malting barley," he said. The fall in malting premiums was most marked in Scotland where there has been a less significant drop in barley plantings than in England and there is less scope for exports.

"Only a modest tonnage (from Scotland) has so far been exported...A combination of low premiums and higher shipping costs from Scotland means that much of the rest is likely to be consigned to feed," Bell said.

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