September 2016 Campden BRI food and drink innovation Industry Brewing Industry News News Monthly Update

Contents Australia...... 1 Poland...... 5 ...... 2 South Africa...... 5 China...... 2 ...... 5 Denmark...... 2 Switzerland...... 6 Europe...... 3 United Kingdom...... 6 India...... 3 USA...... 9 Japan...... 4 Venezuela...... 11 Netherlands...... 4 Vietnam...... 12 Nigeria...... 4 World...... 12

Australia CRAFT- START-UP HAS EYES ON EXPANSION FROM ADELAIDE TO ASIA. http://www.beveragedaily.com, 14 Sept. 2016 (published online). The establishment of a new trading enterprise called Small Beer, which is based in Adelaide, South Australia, is reported. The company buys beer from small independent brewing firms and sells it directly to consumers via the Internet, for delivery to the purchaser's home. It also offers a subscription service for consumers interested in trying new , under which mixed packs containing diverse products of Small Beer's suppliers are delivered to subscribers once per month. Initially, it has mainly sold beers brewed in South Australia and the neighbouring state of Victoria, but has begun discussions with a number of prospective suppliers in other parts of Australia. The aim is to benefit both consumers (by enabling them to buy beers which they would otherwise be unable to obtain unless they visited the places where these beers are brewed) and brewing firms (by making their products available to a far larger consumer population than they could otherwise reach). Furthermore, because the list of products for sale on the Small Beer website shows only those beers which are currently in stock, the goods purchased can always be sent out immediately, ensuring that they reach consumers while still fresh. The word "Asia" in the title refers to the fact that Small Beer is already considering the possibility of extending its trading territory beyond Australia into some southeastern Asian countries and

Information contained in this publication is confidential to Campden BRI member companies. Copyright © Campden BRI 2016 perhaps as far as China at some time in the future. It is also stated to be considering the possibility of trading in cider as well as beer.

Belgium AB INBEV CONTINUES CRAFT BEER SPREE WITH ACQUISITION OF BELGIAN BREWER BOSTEELS. http://www.beveragedaily.com, 12 Sept. 2016 (published online). The acquisition by Anheuser-Busch InBev (AB InBev) of Brouwerij Bosteels, hitherto an independent family brewing firm, is reported. It is stated that the firm's brewery in Buggenhout, Belgium, will remain in operation and will continue to be run by its existing management (including members of the Bosteels family) as part of its new owner's international speciality beer division (which also includes several breweries in the USA, originally established by former "craft" brewing firms that have been taken over by AB InBev over the past few years). Bosteels is well known for its speciality beers, including a strong called Kwak which is served in a very unusual drinking glass, with a flared upper part and a bulbous bottom, suspended in a specially made wooden stand.The purchase price has not been officially disclosed, but is estimated in this report to be equivalent to around US$225.4 million.

BELGIAN BREWERY'S PIPE DREAM BRINGS RELIEF TO MEDIEVAL BRUGES.

Brewing IndustryBrewing News http://www.reuters.com, 16 Sept. 2016 (published online). A firm called De Halve Maan (Flemish for "The Half Moon") has had a pipeline laid to carry beer from its brewery in the centre of Bruges, Belgium, to its bottling hall outside the city, about 3 km distant. The construction work took about 5 months, but by then it had taken about 4 years to develop the original concept into a practicable plan. The project cost about 4 million euros; some of the money was provided by the government of the Flemish-speaking region of Belgium (presumably in consideration of the benefits of eliminating the need to transport the beer by road, which required heavy goods vehicles, weighing over 40 t, to pass through streets dating from the Middle Ages and originally intended for use by nothing bigger than a horse-drawn cart), but about 350000 euros came from a "crowdfunding" scheme, in which individuals contributed small sums (up to a maximum of 7500 euros per person) towards the project and will receive their return on the investment in the form of beer, the amount of which depends on the size of each person's contribution. In 2015, De Halve Maan produced about 50000 hl of beer (30% more than in 2014), but could have sold considerably more if production had not been constrained by the difficulty of transporting the beer from the brewery to the bottling hall. As this problem has now been eliminated by the installation of the pipeline, it is predicted that its output for the whole of 2016 will be about 20% higher. The pipeline has sufficient carrying capacity to handle over 4 times the brewery's current output.

China CHINESE CRAFT BREWERIES LOOK TO AUSTRALIA FOR PREMIUM WATER SUPPLY. http://www.beveragedaily.com, 5 Sept. 2016 (published online). A company named PH8 is reported to have entered into negotiations with a number of speciality brewing companies (not individually identified in this report) in China about proposed arrangements for supplying Australian mineral water to these firms for use as brewing liquor. The water concerned is obtained from an underground geological formation on the Yorke Peninsula on the coast of South Australia, where it is said to be "filtered naturally through black limestone". It is described as being rich in potassium, calcium and magnesium and somewhat alkaline, with an average pH value of about 8 (hence the company name). It is already being marketed in Australia and other countries as bottled mineral water.

ROK STARS TAKES ABK BAVARIAN BEER TO CHINA. http://www.drinks-business-review.com, 6 Sept. 2016 (published online). In 2013 (as was reported at the time), a company named ROK Stars acquired a controlling interest in the brewing company Aktienbrauerei Kaufbeuren, of Kaufbeuren in Bavaria. It then began to develop an international trade (managed via a subsidiary called ROK Drinks) in Kaufbeuren's products, which are exported to several countries under the brand-range name of ABK Beer. It is here stated that ROK Stars has entered into an agreement with a company named REN Distributions, which is based in the UK, to distribute its beers in China (where they underwent successful marketing trials in 2015).

Denmark CARLSBERG REVEALS PHYSICAL PROTOTYPE OF GREEN FIBER BOTTLE.

2 http://www.beveragedaily.com, 29 Sept. 2016 (published online) In January 2015, it was reported that Carlsberg, a packaging company called ecoXpac, the Technical University of Denmark and a body called Innovation Fund Denmark had begun to collaborate in a project for the development of processes for making fully biodegradable beverage bottles and closures from renewable raw materials (primarily wood fibres) which can be obtained from environmentally sustainable sources. It is here stated that a prototype of such a bottle was presented at the Sustainable Brands 2016 Conference, which was held in Copenhagen, Denmark, in the last week of September 2016. A Carlsberg representative has stated that the project was still presenting technical challenges in several areas, including some aspects of the development of the "impulse drying" technology (to be used to solidify the bottle body in the mould which shapes it) as well as of the closure, binding materials to be used in the production process, coatings to be applied to the bottles and inks for printing branded decoration and product information on them. However, it appears that the project has already made significant progress.

CARLSBERG "REBREWS" ORIGINAL 1883 . http://www.morningadvertiser.co.uk, 29 Sept. 2016 (published online). Carlsberg has launched a "limited edition" lager called Re-brew, fermented by yeast that was cultured from a bottle of lager dating from 1883 (found in the company's old brewery in Copenhagen, Denmark, in 2013) and brewed according to a reconstructed recipe from that time. The yeast taken

Brewing IndustryBrewing News from the old bottle was found to be an early specimen of the first pure cultured yeast strain to be used in commercial beer production, which had been isolated and propagated by E.C. Hansen (who worked for Carlsberg and was one of the pioneers of brewing microbiology) and in 1884 became the first brewers' yeast strain to be marketed commercially, under the designation "Carlsberg No. 1". The use of pure yeast strains, obtained by Hansen's isolation and propagation methods, greatly reduced the frequency and severity of quality problems arising from the contamination of brewers' yeast by spoilage microorganisms. A batch of 600 bottles of Re-brew will be sold in the UK through a firm in London called St. Bart's Brewery, to raise funds for the International Centre for Brewing Science (ICBS) at the University of Nottingham in central England. Some of the proceeds will be used to pay the course fees for a brewing science student there.

Europe BREWERS ADD INGREDIENT & NUTRITION INFO IN EUROPE. http://www.beveragedaily.com, 27 Sept. 2016 (published online). In March 2015 (as was reported at the time), the industry organisation Brewers of Europe (BoE) issued a statement calling for the declaration of the ingredients, calorific value and content of various nutritionally-relevant constituents of beer on containers and outer packaging and announcing that member companies of its affiliated national organisations in countries where such declarations were not already required (by legislation, industry standards or the like) would add them to their labels, etc., as soon as possible. It is here reported that BoE has issued a statement predicting that by the end of 2017, more than half of the volume of beer sold in European Union member countries will consist of brands which carry such information. It is also stated that recent market research surveys, carried out in various European countries, have found that about 86% of respondents expressed the opinion that such information should be provided for all commercially marketed beverages. EU rules in force at the time when this report was written already require the provision of such information on most products intended for human consumption, but beverages containing more than 1.2% alcohol by volume are exempted from that requirement, unless they are to be sold to consumers in a country where it is imposed on them by national legislation. At the time when this report was written, such a requirement was imposed on beer in at least 4 EU countries.

India HEINEKEN UPS UNITED BREWERIES HOLDING AGAIN. http://www.just-drinks.com, 20 Sept. 2016 (published online). Heineken is reported to have raised its shareholding in United Breweries (the largest beer producer in India) from 43 to 43.7%. The additional shares were purchased from an enterprise called the Yes Bank for a sum equivalent to 20.3 million euros. According to Heineken, this acquisition should not have any effect on United Breweries' management or business operations. However, it reinforces the perception that Heineken appears to have established a policy of buying shares in United Breweries whenever it has an opportunity to do so (as has already happened several times in recent years), which has already given rise to speculative rumours about Heineken's alleged intention to become United Breweries' majority owner.

3 Japan BROOKLYN BREWERY IN "CONVERSATION" WITH KIRIN OVER JAPAN DEAL. http://www.just-drinks.com, 15 Sept. 2016 (published online). The City "craft" brewing firm Brooklyn Brewery has issued a statement denying a story circulated by a Japanese news agency, which claimed that it had agreed to set up a joint venture, in partnership with the Japanese beverage concern Kirin (said to be the joint venture's majority owner), to brew its beers for sale in Japan. Brooklyn's statement added that while it has been "in conversation" with Kirin over the possibility of making some kind of arrangement between the companies to supply Brooklyn's beers to the Japanese market, no specific plans had yet been agreed up to the time of issuing the statement. Brooklyn already has a small presence in Japan, as its Brooklyn Lager is imported by the Nippon Beer Company, while some of its beers are made under licence by the Kiuchi Brewery, near Tokyo, but are produced there only in keg form for the public house and restaurant trade.

Netherlands HEINEKEN APP INVITES OFF-PREMISE DRINKERS TO HEAD TO ON-PREMISE. http://www.just-drinks.com, 28 Sept. 2016 (published online). Heineken has launched a scheme in the Netherlands to encourage persons who buy its beer Brewing IndustryBrewing News for consumption off the retailers' premises to drink the beer in on-premises-consumption trade outlets (such as public houses) as well. The company has released an application package to be downloaded onto Internet-enabled mobile telephones, which allows consumers to use the digital cameras in their telephones to scan coded markings on containers or multipacks of Heineken beer when they buy them in the off-premises trade. Scanning the codes activates the transmission of a signal to a facility connected to the Internet, which then sends electronic credit vouchers, which can be used to buy keg Heineken in participating on-premises trade outlets, to the telephones from which the codes were sent. The facility also enables participating outlets to make information about themselves available to consumers. By the time when this report was written, about 2000 , restaurants, etc., in the Netherlands had already joined the scheme.

HEINEKEN PICKS CRAFT BRAND DEVELOPMENT OVER BREWER PURCHASES. http://www.just-drinks.com, 9 Sept. 2016 (published online). Senior members of Heineken's management have indicated that the company is unlikely to acquire any further interests in smaller, previously independent speciality brewing enterprises like the US regional company Lagunitas, of which (as was reported at the time) it purchased 50% in 2015. However, it does intend to increase its involvement in the speciality sector of the beer market, mainly by developing new speciality beers of its own. These may be marketed as "brand extension" products associated with some of its mainstream beers, as has already been done in the case of a lager called H41, which was launched in March 2016. H41 was brewed to a recipe similar to that of the standard Heineken lager (and displayed a miniature version of the Heineken brand logo on its bottles), but was fermented by an unusual yeast strain (said to be descended from a wild yeast found in the Patagonia region in South America, which includes the southernmost portions of both Argentina and Chile) which gave it a distinctive flavour. The company also expects to find opportunities for new product development and market expansion in the alcohol free, low alcohol and "medium-low alcohol" (i.e. containing less alcohol than standard-strength beers but more than low alcohol beers properly so called) sectors of the beer market, as well as in cider.

Nigeria GUINNESS NIGERIA BOOKS FULL-YEAR LOSSES AS CURRENCY WOES CONTINUE. http://www.just-drinks.com, 21 Sept. 2016 (published online). In the year finishing at the end of June 2016, Guinness Nigeria (of which Diageo is the majority owner) made sales to the value of 102 billion Nigerian naira (14% less than in the previous year) and its overall financial result, after tax, was a loss of 2 billion naira.The decline in performance is attributed mainly to the general deterioration of the Nigerian economy (which depends heavily on petroleum exports and consequently has been badly affected by the low international price of that commodity). In particular, a recent drop in the exchange value of the naira against various currencies used in international trade, such as the US dollar, has raised the cost of imported goods (including various ingredients, processing aids, packaging and other materials used by Guinness Nigeria, although it has already been reported to have made significant progress towards finding acceptable locally-produced substitutes for at least some of the foreign materials which it has hitherto used).

4 Poland POLISH BILLIONAIRE MAY JOIN RACE FOR SABMILLER'S EAST EUROPE BRANDS. http://www.reuters.com, 15 Sept. 2016 (published online). A Polish business newspaper, Puls Biznesu, is cited as the source of a report that an enterprise based in Poland, named Kulczyk Investments, or its proprietor (the "Polish billionaire" of the title, whose surname is Kulczyk but who is referred to by 2 different personal names in different parts of this report, leaving it uncertain which, if either, is correct), may be preparing to join forces with international investment enterprises to make a collective bid for a set of assets belonging to SABMiller (including breweries in 5 countries in central and eastern Europe as well as the beer brands produced by them), which will be put up for sale if the proposed acquisition of SABMiller by Anheuser-Busch InBev (AB InBev) is approved by sufficient majorities of both parties' shareholders. Kulczyk Investments has a small shareholding in SABMiller (which, as was reported at the time, was reduced to 1.5% by the sale of some of its shares in April 2016). Investment firms named in the newspaper report as having expressed interest in these SABMiller assets (and therefore as being potential partners for Mr. Kulczyk or his firm in a bidding coalition) include Advent International, Kohlberg Kravis Roberts and Company (KKR), BC Partners, CVC Capital Partners and Mid Europa Partners. Other potential bidders mentioned by the newspaper include China Resources Enterprises (hitherto the joint owner, with SABMiller, of China Resources Snow Breweries (CRSB), the largest brewing concern in China, but it has been agreed that if the AB InBev takeover is implemented,

Brewing IndustryBrewing News SABMiller's portion of CRSB will be sold to China Resources Enterprises) and the Japanese beverage concerns Asahi (which has already entered into a provisional agreement to buy other SABMiller brewing assets in the Netherlands, Italy and the UK if AB InBev acquires SABMiller) and Kirin.

South Africa HEINEKEN ADDS SOL TO SOUTH AFRICAN FIREPOWER AHEAD OF ANHEUSER-BUSCH INBEV ENTRY. http://www.just-drinks.com, 14 Sept. 2016 (published online). Heineken has begun to expand the range of products marketed by the brewing and trading operations in South Africa of which it is the majority owner (the rest being owned by Namibian Breweries since Diageo, which formerly also held shares in these operations, sold them to the 2 present owners in 2015, as was reported at the time). The first of the new additions is Heineken's Mexican lager brand Sol, which was launched in South Africa on 9 September 2016. The expansion of the product range is intended to enable the Heineken-controlled operations to compete more effectively against SABMiller in South Africa if the proposed acquisition of the latter by Anheuser- Busch InBev (AB InBev) takes place as expected. SABMiller's share of the South African beer market is about 80% and other enterprises which sell beer there, including Heineken, expect that competing with it will become more difficult if AB InBev, which has significantly greater economic resources, takes it over.

SOUTH AFRICA'S REMGRO EYES SABMILLER'S DISTELL SHARES. http://www.just-drinks.com, 28 Sept. 2016 (published online). Remgro is a South African conglomerate and a partner in a joint venture called Remgro-Capevin Investments, which owns 52.8% of the South African wine and spirits company Distell. It is here reported that Remgro has stated that it is considering whether to buy SABMiller's 26.4% shareholding in Distell, following the (already reported) inclusion of a requirement for the sale of that shareholding among the conditions under which the business competition regulating authorities in South Africa have granted permission for the acquisition of other SABMiller assets in that country by Anheuser-Busch InBev (AB InBev). In its statement, Remgro also claimed to have a "preemptive right" to buy SABMiller's shares in Distell, but added that no agreement between it and SABMiller concerning these shares had yet been reached and that it would "only exercise its preemptive right on commercially-appropriate terms".

Sweden VERDICI TO DISTRIBUTE ROK DRINKS' ABK BEER IN SWEDEN. http://www.drinks-business-review.com, 22 Sept. 2016 (published online). An enterprise called ROK Stars, which owns a controlling interest in the brewing company Aktienbrauerei Kaufbeuren (of Kaufbeuren, Bavaria) and sells the latter's products internationally (via a subsidiary called ROK Drinks) under the brand-range name of ABK Beer, has awarded a contract to a commodity trading company named Verdici to distribute these products in Sweden.

5 Switzerland BEER "MAKES PEOPLE MORE SOCIABLE", SAYS STUDY. http://www.beveragedaily.com, 19 Sept. 2016 (published online). A research team based at the University Hospital in Basle, Switzerland, has announced the findings of a study which is reported to have produced experimental evidence in support of the popular belief that drinking beer facilitates social interaction. Study subjects of both sexes, aged from 18 to 50 years, were subjected to various psychological tests intended to evaluate their capacity for certain emotional responses relevant to social interaction. The results of such tests on subjects who had consumed 500 ml of beer (either alcohol free or a conventional beer of normal alcoholic strength) were compared with those obtained from the same persons when they had not recently consumed beer. After consuming the conventional beer, study subjects showed higher values of a number of emotional and behavioural variables positively associated with social interaction, as well as greater sensitivity to other persons' emotion-indicating facial expressions and "enhanced emotional empathy for positive stimuli". It was also noted that those subjects who, when they had not been drinking beer, tended to be more inhibited in their social behaviour showed the greatest effects of conventional beer consumption. This report does not explicitly state whether the alcohol free beer had any positive effects, but does indicate that at least some aspects of the effects of the conventional beer were attributed at least partly to its alcohol content. It is also stated that a paper describing the study and its findings has been published in a journal called Psychopharmacology, but the present report does

Brewing IndustryBrewing News not give any other particulars of that paper (such as the title, author(s), publication date or volume, issue or page numbers).

United Kingdom WHAT PUBS NEED FROM THE LICENSING ACT INQUIRY. http://www.morningadvertiser.co.uk, 5 Sept. 2016 (published online). A committee of the UK parliament's House of Lords has begun an inquiry into the functioning and the social and economic consequences of changes in alcoholic beverage trade regulating legislation enacted in 2003 (in force since 2005), concerning such matters as the licensing of alcoholic beverage traders and the operation of their trading premises (including public houses and the like) in England and Wales. A number of bodies representing the alcoholic beverage industries and trades have submitted statements to the committee, expressing their opinions on various matters relating to the legislation and suggesting possibilities for improving it. Brief notes on the content of the statements of 2 of these bodies, namely the British Beer and Association (BBPA) and the Association of Licensed Multiple Retailers (ALMR), are presented. Both organisations have agreed that the legislation concerned, as originally enacted, removed many of the unnecessary and arbitrary restrictions imposed by the previous law, but that subsequent changes in the legislation and in the administrative regulations governing its enforcement have again increased the constraints affecting the ability of traders to run their businesses, as well as their operating costs. They have therefore called for a return to the more flexible and non-prescriptive approach to alcoholic beverage trade regulation which formed the basis of the original legislative act.

CORNISH BREWER SKINNER'S INCREASES VOLUME WITH NEW BOTTLING FACILITY. http://www.drinks-business-review.com, 6 Sept. 2016 (published online). The installation of a bottling line at a brewery in Truro, Cornwall, belonging to the firm of Skinner's (which had previously had its beers bottled by an external contractor), is reported. The line was installed in response to rising demand, as the firm has recently begun to market its bottled beers (which were originally sold only in Cornwall and the adjacent counties of southwestern England) throughout the UK. It is expected that the continuing growth in the firm's bottled beer sales will lead to the creation of about 5 new jobs in its trading and customer service operations, in addition to the bottling workers' jobs already created by the installation of the line.

MOLSON COORS' CARLING BRAND LAUNCHES WORLD'S FIRST CONNECTED BEER BUTTON. http://www.drinks-business-review.com, 6 Sept. 2016 (published online). The Molson Coors Brewing Company has launched a novel system in the UK to enable consumers to purchase its lager brand Carling from home and have the beer delivered to them. It uses a device intended to be kept in a domestic refrigerator where the consumer stores the beer, which is linked by a wireless communication facility to an Internet-enabled mobile telephone onto which a special application software package has been downloaded and installed. Pressing a button on the device causes the telephone to send a message ordering a multipack of Carling from a local trade outlet where the consumer has an arrangement for that purpose. The trader then delivers the beer to the consumer's home and collects the payment for it by electronic transfer from the consumer's

6 bank account. By enabling consumers who have the device to buy Carling much more easily and conveniently than any other beer, this innovation is intended to secure a competitive advantage for the brand.

MAJOR DRINKS COMPANIES LAUNCH ALCOHOL INFORMATION PARTNERSHIP TO "BALANCE UK ALCOHOL DEBATE". http://www.just-drinks.com, 7 Sept. 2016 (published online). The respective UK arms of 8 international alcoholic beverage concerns (Diageo, Pernod Ricard, Campari, Bacardi, Brown Forman, Remy Cointreau, Moet Hennessy and Beam Suntory) have jointly formed an organisation called the Alcohol Information Partnership (AIP). It is a non-profit body, which will help to support existing efforts by the UK's alcoholic beverage industries and trades to promote moderate and socially acceptable drinking habits and thereby enable consumers to enjoy alcoholic beverages while avoiding the problems associated with an excessive (or otherwise inappropriate) alcohol intake. In particular, in support of that aim, it is also intended to draw the attention of the news media, politicians, public service bodies and the general community to the fact that the vast majority of alcoholic beverage consumers in the UK already drink in reasonable moderation and that the occurrence of seriously excessive alcoholic beverage consumption is decreasing, to inform consumers about the evidence for beneficial effects of regular moderate alcoholic beverage consumption on human health and to expose the misleading nature of the dogmatic anti-alcohol propaganda which depicts even the occasional consumption of small quantities of alcoholic

Brewing IndustryBrewing News beverages as harmful.

CYCLOPS BEER SCHEME CELEBRATES MILESTONE. http://www.morningadvertiser.co.uk, 12 Sept. 2016 (published online). Since it was launched in 2006, the Cyclops system for describing the sensory attributes of beer has been used to profile at least 2525 individual beers, produced by at least 418 different breweries. The scheme was originally devised by a brewing company, Everards, to describe its own products in a way that would help consumers to determine which of the beers available to them would best suit their personal tastes. It was later adopted by many other brewing companies in the UK, which led to the establishment of a national organisation (now called the Cyclops Beer Board) to oversee the preparation of brand descriptions according to a standardised procedure. The format of the descriptions indicates sweetness and bitterness by intensity ratings on a 5-point scale, while other attributes are indicated by brief descriptive terms or sets of a few such terms. The scheme's name comes from the drawings of an eye, a nose and a mouth (symbols representing appearance, aroma and flavour) which are displayed alongside the descriptors and form an image reminiscent of the single-eyed giants called "Cyclops" in ancient Greek mythology. Particulars of all of the beers for which profiles have been prepared are held on a database, the contents of which are listed on the scheme's website. The list and profiles will also be made available via a new version (scheduled to be launched in October 2016) of a downloadable application package ("app") for Internet-enabled mobile telephones, called "CaskFinder", which is intended to help consumers to identify beers that suit their personal tastes and find public houses where these beers are sold.

BROOKLYN BREWERY TRANSFERS DISTRIBUTION RIGHTS TO CARLSBERG UK. http://www.beveragedaily.com, 13 Sept. 2016 (published online). The company which operates the Brooklyn Brewery in New York City has appointed Carlsberg to be the importing agent and distribution contractor for its beers in the UK (where they have been imported since 2001 by the firm of James Clay and Sons), with effect from 30 December 2016. Brooklyn already has business connections with Carlsberg through a microbrewery called Nya Carnegiebryggeriet in Stockholm, Sweden, and the Ringnes E.C. Dahls Brewery in Trondheim, Norway, both of which are owned and managed by joint venture partnerships between the 2 companies.

MOLSON COORS SET TO BUY MORE BEER BRANDS. http://www.morningadvertiser.co.uk, 14 Sept. 2016 (published online). The UK arm of the Molson Coors Brewing Company has begun to market a collection of premium and speciality beers and ciders in the UK under the brand range name "Brew + Press". Its marketing director is here reported to have stated that it is working to expand the range, partly through developing new products of its own and partly through acquiring existing products which it considers suitable for inclusion, either by taking the brand owners over or by making arrangements with them (e.g. obtaining contracts to import foreign beers into the UK or to brew them under licence for the UK market). In addition to the marketing of the brand range mentioned above, the "Brew + Press" operation also involves a campaign to inform bar staff in public houses, etc., about various aspects of the products which, if better understood by trade personnel, might be useful in helping to sell them (such as the sensory characteristics of the various beers and ciders and the harmonious combination of each of these beverages with food). 7 ASTON MANOR LOOKS TO EXPORTS AS UK CIDER MARKET GOES FLAT. Grocer, 17 Sept. 2016, 239(8273), 10. In its business year 2015, Aston Manor Cider (one of the UK's largest makers of cider and related beverages) obtained total sales revenues of £108.7 million (11.5% less than in the previous year), on which it made a pre-tax profit of £5.3 million (down 23%). However, the revenue contributed by export sales rose to £2.3 million (up 28%) and is likely to increase further in future years, as the company's managing director is reported to have expressed an intention to expand into new foreign markets. It is also reported that another UK cider-making enterprise, the Brothers Drinks Company, likewise suffered a decline in sales takings, to £14.6 million (down £5 million), in its business year 2015 and that this is largely attributed to changes in the purchasing policy of one of the customers for which Brothers Drinks has produced cider under contract.

SIBA BOSS: MORE BREWERS ARE JUMPING ON THE "CRAFT" BANDWAGON. http://www.morningadvertiser.co.uk, 19 Sept. 2016 (published online). The representative organisation of the small and medium-sized independent sector of the UK brewing industry, the Society of Independent Brewers (which until 1995 was called the Small Independent Brewers' Association (SIBA) and is still commonly known by the abbreviation for its old name), has launched an accreditation scheme to differentiate traditional and speciality beers produced in the UK by genuinely independent brewing firms from those marketed by large concerns

Brewing IndustryBrewing News under names which consumers could mistake for those of independent firms.The ownership of accredited firms must be independent of any larger brewing enterprise and the firms must also undertake to adhere to the rules, principles and guidelines (on quality and related matters) specified in the Society's Manual of Good Brewing Practice. Accreditation entitles the firms concerned to display a logo on bottle labels, cask ale dispensing pump clips, advertising materials, etc., identifying their beers as products of an "Assured Independent British Craft Brewer". By the time when this report was written, over 150 Society member firms had already joined the scheme.The title refers to a statement by the Society's managing director, which drew attention to recent market research findings indicating that many consumers are concerned about the authenticity of beer and want to be able to distinguish genuine products of independent firms from beers marketed by large concerns under names which have the effect of concealing the true identities of the brand owners (these may, for instance, be names of subsidiaries created by the brand owners for marketing purposes or of formerly-independent firms that were taken over by the brand owners or their predecessors).

DIAGEO JOB CUT FIGURES "LIKELY OVERSTATED". http://www.just-drinks.com, 19 Sept. 2016 (published online). On 18 September 2016, a newspaper in the UK, the Sunday Times, published an article about a project being conducted by Diageo to improve productivity and efficiency in all its operations worldwide, which stated that the newspaper had been informed by "some workers" at Diageo's global head office in London that many of the office's 1500 employees feared that up to 400 of them could lose their jobs through changes in management structures resulting from the efficiency project. However, the present report also states that other unidentified "sources" have said that the number of job losses is likely to be much lower than was indicated by the newspaper article, although a Diageo representative declined to comment on these statements, saying only that if any changes affecting jobs or working conditions were to be made in the future, the employees affected by them would be informed before they were publicly announced. The efficiency project was announced at the beginning of July 2016 (which was also the beginning of the company's business year 2016/17) and is intended to continue until the end of June 2019, with the aim of reducing Diageo's global operating costs by up to UK£500 million.

WHISKY GIANT DIAGEO'S BIOGAS PLANT SEES 25% REDUCTION IN FOSSIL FUEL ENERGY. http://www.beveragedaily.com, 22 Sept. 2016 (published online). Diageo has released a report on the performance of an effluent treatment plant, supplied by a company named Clearfleau and installed in 2015 at Diageo's Glendullan Distillery in the Speyside region of Scotland. The plant features an anaerobic bioreactor, which produces "biogas" for use as a substitute for fossil fuel gas, as well as a facility for aerobic treatment (using the activated sludge process) to complete the purification of the anaerobically treated effluent. Pipes have been laid to bring effluents to the Glendullan treatment plant from 2 other distilleries nearby (which, like Glendullan, produce Scotch malt whisky). The plant has a processing capacity of about 1000 cu m/ day and a biogas output of about 1 million cu m/year (with a thermal energy value of about 6000 MWh), which is used as boiler fuel for process heating, thereby reducing the distillery's fossil fuel consumption by about 25% and decreasing its emissions of fossil fuel combustion products by an amount estimated to be equivalent in potential environmental impact to around 1000 t/year of carbon dioxide. The organic pollutant content of the effluent (expressed as chemical oxygen demand (COD))

8 is reduced by over 95%. The treatment process also produces a solid residue, which is rich in various plant nutrients and is therefore supplied to local farmers for use as fertiliser.

MARSTON'S PUMPS £10M INTO NEW HEADQUARTERS. http://www.morningadvertiser.co.uk, 27 Sept. 2016 (published online). Marston's, which is one of the UK's largest brewing and public-house-owning companies, has moved its head office into new premises, in an extensively refurbished building inolverhampton, W in the West Midlands of England, where one of its breweries is also located. The office building had been constructed in the 1960s and had changed very little until the alterations for the new office project (which cost about £10 million) were carried out.

BREWERY BOSS SAYS ISINGLASS WILL ONLY BE BANNED IF CONSUMERS PUSH FOR IT. http://www.morningadvertiser.co.uk, 29 Sept. 2016 (published online). The chief executive of St. Peter's Brewery Company, a regional firm based near Bungay, Suffolk, in eastern England, has issued a statement commenting on the already apparent effects and possible further consequences of a recent "media sensation" concerning the clarification of beer with isinglass finings. In mid-September 2016, it was reported that incorrect stories had appeared in some of the UK's news media, alleging that the beer consumers' organisation called the Campaign for Real Ale (CAMRA) had called for legislation to ban the clarification of beer with isinglass or had banned the sale of beers thus clarified at its beer festivals, which had alarmed many beer consumers

Brewing IndustryBrewing News (presumably making them think that isinglass constituted a health hazard or something of the sort) and induced some of them to telephone or e-mail the companies that brew the beers which they habitually drink, asking whether these beers were fined with isinglass and demanding that if so, the use of such finings should cease. Although CAMRA's governing body made it clear that the stories were not true as soon as it became aware of them, the attention drawn by the stories to the nature of isinglass (which is made from the swim-bladders of certain fish) and the fact of its widespread use in the UK brewing industry has continued to have an impact on consumers' attitudes to beer. St. Peter's produces an alcohol free beer which is made without isinglass and, because of the recent rise in public interest in that aspect of the beer's composition, is considering the question of whether it should stop using isinglass to clarify at least some of its other beers. Its chief executive has expressed the opinion that, if there is sufficient consumer demand for beer to be isinglass free, economic pressure will put an end to the use of isinglass without any need for legislation or the like. Although the strongest opposition to the use of isinglass comes from vegetarians, there are others who object to the use of fish products because of the environmental impact of the fishing industry or who simply feel that the presence of fish products in beer is not appropriate. St. Peter's chief executive also pointed out that in order to be able to stop using isinglass in some beers which would be difficult to clarify by any other means, the brewing companies concerned would have to educate consumers to accept the cloudy appearance of the unfined versions of these beers.

USA US TO “CAREFULLY SCRUTINISE” FUTURE ANHEUSER-BUSCH INBEV CRAFT ACQUISITIONS. http://www.just-drinks.com, 8 Sept. 2016 (published online). The business competition regulating division of the US government’s Department of Justice (DOJ) has closed its investigation into Anheuser-Busch InBev (AB InBev)’s acquisition of the Devils Backbone Brewing Company, which has breweries in Roseland, Virginia, and in Lexington, in the same state. As was reported at the time, the sale was agreed between the parties in April 2016. It appears that the investigating officials had concluded that the effects of the acquisition on competition in the beer market could not be predicted with sufficient certainty to justify further action. However, the DOJ stated that it reserved the right to reopen the investigation if its resumption should appear to be justified by new evidence and/or by any significant change in relevant circumstances. If AB InBev’s proposed acquisition of SABMiller takes place, these circumstances would include the extent of AB InBev’s compliance with the conditions imposed by the DOJ in return for permitting the said acquisition, which include a ban on certain practices relating to the wholesale beer trade that are believed to have been intended to induce wholesalers to stop distributing the products of AB InBev’s competitors. Furthermore, the DOJ will thoroughly investigate any prospective acquisitions by AB InBev of hitherto-independent brewing or wholesale beer trading enterprises which may be proposed in the future and will permit them only if reasonably certain that the freedom and fairness of business competition in the US beer market will not be impaired thereby.

MAPLEWOOD BREWERY & DISTILLERY GEARS UP FOR FALL BREWING SEASON WITH NEW FLAVORS AND UPDATED PACKAGING. http://www.beveragedaily.com, 22 Sept. 2016 (published online).

9 The Maplewood Brewery and Distillery in Chicago, , has begun to introduce canned versions of its beers. In future, its permanent brands will be sold in multipacks holding 4 or 6 x 16 US fluid ounce (473 ml) cans. However, some of its seasonal and “limited edition” speciality beers will continue to be available in 22 ounce (650 ml) “bomber” glass bottles, which were previously used for all of its beers. The firm’s complete product range includes 11 brands of beer and 3 of whiskey. It is also stated that the firm is planning to establish a “brewery tap” public house on or beside its production site.

NORTH AMERICAN BREWERIES UNVEILS PLANS FOR $49.1M EXPANSION PROJECT. http://www.drinks-business-review.com, 9 Sept. 2016 (published online). North American Breweries (NAB) (the US arm of Cerveceria Costa Rica, which itself is the brewing division of the Ice and Farm Company, based in the Central American country Costa Rica) is to invest US$49.1 million in the expansion of its Genesee Brewery in Rochester, New York State, according to an official announcement made by the state's governor. The project will involve the demolition of some of the existing brewery buildings and the construction of new ones, as well as the installation of additional equipment (some of which will incorporate recent technological innovations) and the refurbishment and enlargement of the Genesee Brew House (a public house, restaurant and entertainment venue, with its own microbrewing plant, which occupies a building in the grounds of the main brewery). It is expected to create 128 jobs. The governor's role in announcing the project suggests that it is expected to confer politically significant benefits on the general economic

Brewing IndustryBrewing News prosperity of the area around the brewery.

HEINEKEN USA BRINGS EIGHT MORE BEERS TO US MARKET. http://www.drinks-business-review.com, 13 Sept. 2016 (published online). Heineken has announced its intention to establish a new trading subsidiary in the USA, to be known as the Five Points Trading Company, which is scheduled to become operational on 1 January 2017 and will import and market a range of international beer brands, including some which are brewed by Heineken subsidiaries (or by companies in which Heineken is a shareholder). The first 8 of these have hitherto been imported into the USA by independent traders under contracts that are due to expire before the end of 2016.

BLUE MOON BREWING OPENS NEW RINO BREWERY IN COLORADO, US. http://www.drinks-business-review.com, 13 Sept. 2016 (published online). In April 2015, MillerCoors announced its intention to establish a second small brewing facility in Denver, Colorado, which (like its older microbrewery in that city, called the Sandlot Brewery) was to be used to develop and produce speciality beers intended to compete with "craft" brewery products. It is here reported that the new facility, a public house brewery, has now opened. It is located in the River North Art District in Denver (locally known as "RiNo") and called the Blue Moon Brewery RiNo (after MillerCoors' Belgian-style "white" wheat beer brand Blue Moon). It has 2 sets of brewhouse vessels (configured for wort outputs of 2 and 20 US barrels/brew respectively) and a production capacity of about 10000 barrels/year. The smaller brewhouse is used as a pilot plant and to produce certain specialities which are unlikely to sell in quantities sufficient to make their production in the main brewery economically viable.

BPA-FREE EPOXIES LAUNCHED BY VALSPAR. Canmaker, Sept. 2016, 29, 11. The Valspar Corporation, which is based in the USA, has launched a new range of coating preparations, free from bisphenol A (BPA), for metal food-contact products (including the interior surfaces of food and beverage cans) under the trade name "valPure V70", which are claimed to have the same performance characteristics as established conventional coating materials for the same purposes that contain BPA. BPA has long been a common constituent of such materials, but is widely believed to be potentially hazardous to human health, which has led various pressure groups to campaign for legislation to ban its use in food-contact products. However, most food and beverage can manufacturers have hitherto resisted efforts to persuade them to adopt BPA-free substitutes for their customary coating materials, alleging that the substitutes are deficient in certain properties (including the capacity to prevent corrosion of the cans and freedom from detrimental effects on the flavour of their contents) that are essential for preserving the quality of canned products.

DONALD TRUMP A DANGER TO CONSTELLATION BRANDS' BEER GROWTH. http://www.just-drinks.com, 28 Sept. 2016 (published online). A financial business analyst, Mr. Pablo Zuanic, who works for an organisation called SIG, has issued a statement warning that if the Republican Party candidate for the presidency of the USA, Mr. Donald Trump, wins the election in November 2016, Constellation Brands, which brews the Modelo range of beer brands in Mexico for sale in the USA, could suffer a serious loss of sales. Mr.

10 Trump has repeatedly expressed hostility to persons of Mexican and other Latin American ethnic origins and has threatened that, if elected, he will order the deportation of large numbers of Latin American immigrants, whose presence in the USA he regards as illegal, as well as the construction of a wall along the USA's border with Mexico to prevent further immigration from that direction. As the Modelo beers are popular among persons of Mexican origin in the USA, Mr. Zuanic estimates that the implementation of Mr. Trump's proposal for mass deportations could deprive Constellation of perhaps as many as 8 million regular consumers. Furthermore, in Mr. Zuanic's opinion, the election of Mr. Trump to the presidency would probably be widely construed in the USA as "legitimising" racial prejudice against Mexicans on the part of persons of other ethnic origins, especially those of northern European descent, who might thereby be induced to reduce or terminate their consumption of foods and beverages of Mexican origin, thus inflicting further losses of sales on Constellation. In the "worst case scenario", Mr. Zuanic has calculated that if all the predicted consequences come to pass, Mr. Trump's election could cut Constellation's beer sales volume by up to 40% and cause the stock market price of shares in it to fall by as much as 30%.

ANSA McAL BUYS FLORIDA BEER COMPANY. Brew. Distill., Sept. 2016, 12(9), 16. An investment group called ANSA McAl, which already owns an enterprise called Carib Brewery (in fact comprising 3 breweries in 3 different Caribbean countries, namely the island groups ofTrinidad and Tobago and of St. Kitts and Nevis and the island of Grenada), has acquired an enterprise in

Brewing IndustryBrewing News the USA called the Indian River Beverage Corporation, which operates the Indian River Brewery in central Florida via a subsidiary called the Florida Beer Company.

PROPOSED BEER RULE PROMPTS PRIVACY CONCERNS. Brew. Distill., Sept. 2016, 12(9), 52. Legislation was recently enacted in Alabama, taking effect on 1 July 2016, to permit brewing enterprises to sell small containers or multipacks of beer directly to consumers, but with a limit on the quantity that may be purchased at a time by any individual. It is here reported that the state's alcoholic beverage industry and trade regulating authority, called the Alcoholic Beverage Control (ABC) Board, is considering a proposal for an administrative regulation (which would have the force of law under the legislative act mentioned above) to require brewing enterprises which sell beer to consumers to record the names, addresses, ages and telephone numbers of all persons who buy beer from them and pass these particulars to the ABC Board. The Alabama Brewers Guild, which represents the state's "craft" brewing enterprises, has condemned the proposal as both "an administrative nightmare" for the brewing enterprises and a gross violation of consumers' privacy, especially as the ABC Board had refused to explain why it wanted the information.

SIXPOINT BREWERY UNVEILS HIGHLAND PARK BEERS WITH EDRINGTON. http://www.just-drinks.com, 27 Sept. 2016 (published online). The Sixpoint Brewery, a regional "craft" brewing firm in New York, has collaborated with the Scotch whisky company Edrington to develop 2 speciality beers that have been specifically created to complement the flavours of 2 whiskies from Edrington's Highland Park Distillery, located on one of the islands of the Orkney group, off the northern tip of Scotland. Both beers will be sold only in a few outlets in New York City where these whiskies are also sold. One of them is a golden ale, brewed using oats, called Rune, which is intended to match Highland Park's 12-year-old single malt whisky, while the other is a dark ale called Sköll, intended to go with a "special finish" whisky (matured under conditions designed to give it a particularly distinctive flavour profile) called Highland Park Dark Origins. The names of both beers are intended to reflect Orkney's Norse heritage (the islands belonged to Norway until 1472, when they were ceded to Scotland, together with Shetland, another group of islands some way to the north of Orkney, as security for a debt owed to the King of Scots by the King of Denmark and Norway, which was never paid).

Venezuela VENEZUELAN BEER SALES PLUNGE AMID CURRENCY TURMOIL. http://www.just-drinks.com, 20 Sept. 2016 (published online). A Colombian news media source is stated to have reported that beer sales in at least some parts of Venezuela have fallen by 70 to 80% since the recent introduction of a new system for regulating the changing of money between the Venezuelan bolivar and various other currencies that are widely used for international trade (such as the US dollar), which includes the establishment of fixed official exchange rates. At the time when this report was written, alcoholic beverage makers purchasing imported raw materials, etc., were being subjected to an exchange rate of over 200 bolivars to the US dollar (which had been valued at only 13 bolivars as recently as March 2016). In consequence, according to the head of a Venezuelan industry organisation quoted in the Colombian news source

11 mentioned above, the average price of a standard crate of bottled beer has risen from 3500 bolivars in April 2016 to 10000 bolivars at the time when the Colombian report was written, which is said to have induced some consumers to drink less beer and more rum, as the price of the latter has risen more slowly. The same source also claimed that many beverage retailers in Venezuela have ceased trading since the country's legal minimum wage was raised in August 2016 to a level which they allegedly could not afford to pay. Because the Venezuelan economy depends heavily on petroleum exports, it has been seriously impaired for some time by the falling international market price of that commodity, aggravated by the disruptive effects of continuing political conflict between the government and its opponents (with each side accusing the other of corruption, of various human rights violations and of trying to suppress the liberty of the people in order to exercise dictatorial power).

Vietnam VIETNAM'S TOP BREWER SABECO CLEARED FOR SHARE LISTING BY DEC. http://www.reuters.com, 27 Sept. 2016 (published online). Following on from an earlier report, published on 1 September 2016, that the Vietnamese government's majority shareholdings in the brewing companies Sabeco and Habeco were to be put up for sale, it is here stated that the government's Ministry of Industry and Trade has approved the addition of Sabeco (which is the largest beer producer in Vietnam) to the official list of enterprises Brewing IndustryBrewing News in which shares are traded on the country's stock market. At the time when this report was written, the date from which the listing will take effect had not yet been set, but the shares were expected to come onto the market by December 2016.

World ANHEUSER-BUSCH INBEV, CARLSBERG AND HEINEKEN EXPAND RESPONSIBLE DRINKING CAMPAIGN. http://www.just-drinks.com, 19 Sept. 2016 (published online). A global campaign, first held in 2015, to promote the enjoyment of beer in reasonable moderation and to support the development of safe and socially acceptable drinking habits by consumers has been repeated. Major international brewing concerns (including Anheuser-Busch InBev (AB InBev), Carlsberg and Heineken), as well as regional and national brewing industry organisations (including Brewers of Europe (BoE) and the national bodies affiliated to it), are collectively supporting the initiative, which involves activities in at least 76 countries. The renewed campaign designated 16 September 2016 as its second "Global Beer Responsibility Day" (the first one was 18 September 2015, when the original campaign was launched).

SABMILLER NEARS THE END. http://www.brewersguardian.com, 29 Sept. 2016 (published online). On 28 September 2016, the acquisition of SABMiller by Anheuser-Busch InBev (AB InBev) was approved by both companies' shareholders. SABMiller's 2 largest shareholders, Altria and BevCo, confirmed their (already reported) agreement to a separate deal withAB InBev, under which they will be paid for their SABMiller shareholdings partly in cash and partly in AB InBev shares (in order to limit their liability to pay taxes on the proceeds). Over 95% of votes cast in a ballot of SABMiller's other shareholders were in favour of accepting AB InBev's all-cash offer of UK£45 per share (the few votes against acceptance were cast by those who wanted to hold out for a higher price). As a similarly large majority of AB InBev's shareholders also approved the deal, it was expected at the time when this report was written that the remaining formalities of its implementation (such as the termination of the stock market listings of shares in SABMiller) would be completed, as previously planned, on 10 October 2016. As already reported, some of SABMiller's subsidiaries are to be sold to third parties, as required by the conditions under which the deal was approved by the business competition regulating authorities of the countries where these enterprises operate. The rest of SABMiller will be absorbed into AB InBev, which will continue to operate under its present name.

Campden BRI, Centenary Hall, Coopers Hill Road, Nutfield, Surrey RH1 4HY United Kingdom Email: [email protected] Tel: +44 (0) 1737 822 272 Web: www.campdenbri.co.uk 12