16 May, 2006

World: Winds of change blowing in the beer industry

All large international brewing concerns published excellent profit figures for 2005, analyst deducted in a recent report. Nevertheless many of them, being confronted by stagnant or declining beer sales in the developed countries of Western Europe and North America, try to reduce further the cost of their operations.

Outstanding examples are the closure of Carlsberg's original Copenhagen brewhouse and InBev's formation of centralized service offices in Eastern Europe at the expense of hundreds of jobs in the West. Shareholders' satisfaction and with it the defense against take-overs by others or the will to expand have become common place in the brewing industry just as much as in many other industries of the world.

During past years brewers became accustomed to cut rather regularly the cost of their raw material procurement. In the malt sector there were three major reasons for the decline of prices: the power of the mighty brewers against a weak defense of too many and comparatively small maltsters, the overcapacities existing in the malting industries, and last not least, depressed prices of malting barley because of continuously abundant supplies.

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