World’s beer market seen flat in economic crisis

Worldwide consumption of beer could remain flat this year as the economic downturn hurts demand after several years of impressive growth, industry players said at a gathering in northern France on Feb. 5.

“With the financial cri -sis, market conditions are changing. The big question mark is no longer supply but demand,” said Alain Caekaert, buying director at Malteurop, one of the world’s top malt manufacturers.

Between 2005 and 2008, worldwide beer production rose 14 per cent to 1.8 billion hectolitres (39.59 billion Imperial gallons) to meet rising consumption, especially in emerging countries.

After rising 5.3 per cent in 2007, global demand had been forecast to grow by two to 2.5 per cent in 2008, but these expectations have been scaled down.

“With the crisis, some people think it will be more like zero growth,” said Jean-Claude Girard, managing director at malt broker Interbrau. For 2009, the consensus is already for no rise, he said.

In response to stalling demand, brewers may turn more to beer with lower malt content that is cheaper to produce and buy.

“The global recession could lead to changes in consumption patterns,” said Alain Le Foch, Malteurop’s managing director.

In China, for example, the amount of malt used to make a hectolitre of beer has fallen to 7.75 kg versus 13 kg on average in Europe.

The malt manufacturers who supply brewers are already feeling a squeeze from deteriorating worldwide demand.

In Russia, where beer is a relative luxury, malt firms have cut capacity by 25 per cent, Interbrau’s Girard said.

“In the coming weeks, this is going to happen in Europe too, we could go from 95 per cent of capacity used to 90 per cent,” he said on the sidelines of the conference.

A sharp fall in demand for malt could further increase stocks of malting barley – the crop used to produce the beer ingredient – after a big harvest in 2008.

In the European Union, malting barley stocks could reach 1.3 million tonnes by the end of this season, representing six weeks of malt capacity.

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