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Joh. Barth & Sons see tough future for hops.

Joh. Barth & Sohn, the largest German-based hop merchant, sees difficult years ahead for the global hop market.

"Since 2006 the world hop industry has been riding a rollercoaster," said Stephan Barth, managing partner of Barth & Sohn during a recent presentation. "As a result, demand for hops will continue to fall."

He advised hop growers to let land go out of cultivation--even in the celebrated Hallertau region. "There is no point in producing hops for a market that will not buy them," he said.

Mr. Barth added that the recession in the hop market until 2005 was followed by an unprecedented boom on the spot markets in crop years 2006 to 2008.

"In response," he said, "the international brewing industry placed long-term forward contracts on the assumption that beer output would continue to rise. The reality, however, turned out to be different: the hop supply deficit in crop years 2006-2008 has now become a supply surplus. The world economic crisis also left its mark on the beer market. In 2009, for the first time in years beer production not only failed to rise, but fell slightly instead. However, after the 2007 harvest in particular, due to the high volume of forward contracts with the brewing industry, the hop growers had increased hop acreage. Now it emerges that the brewing industry clearly has forward contracts that are surplus to requirements."

In summing up, Herr Barth emphasized that, "Too many hops are being grown! Without further clearing of plantations, the hop market will not be able to recover in the medium and long term."

Regine Barth, managing partner of Joh. Barth, noted that nearly all the western industrialized countries registered a fall in beer output. "For the first time since 1992, world beer output did not continue to rise, but fell by nearly 10 million HL," she said.

Going against that tide, China upped production to more than 423 million HL. China is now the uncontested largest world beer market, she observed, followed by the US, Russia, Brazil, and Germany.

Ms. Barth also noted that the five largest brewers--ABI, SABMiller, Heineken, Carlsberg and China Resource--now represent nearly 50% of the world beer mkt.
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Publication:Modern Brewery Age
Date:Jul 23, 2010
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