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U.S beer exports increasing rapidly.

U.S. Beer Exports Increasing Rapidly

The value and volume of malt beverage exports worldwide on the rise.

Exports of beer by U.S. brewers reached 119 million liters (31 million gallons) in 1988, for a value of $66.3 million in 1988, a 31-percent gain over the 1987 quantity and 21 percent above the 1987 value of $54.6 million.

Lower average prices are credited for this second annual strong increase for U.S. beer exports. Changes in currency values and trade policy have also helped U.S. beer exports make a better showing, especially in Japan. While Japan and Canada accounted for most of the increase in U.S. beer exports in 1988, a number of new markets are opening up where orders are still less than three million dollars annually.

U.S. beer exports to Japan tripled in value during 1986-1988, rising from $5.4 million in 1986 to $10.7 million in 1987 and to $17.2 million for the 32.3 million liters shipped in 1988. Japan has opened up as a market for U.S. beer and demand for American beer there is increasing. Previous barriers to the trade have declined as Japan attempts to buy more American products and reduce the trade deficit of more than $75 billion annually. The sharp decline of the U.S. dollar versus the Japanese yen contributed to the 87-percent rise in U.S. beer exports to Japan in 1987 and the 129-percent gain in 1988. If this trend continues in 1989, U.S. beer exports to Japan may possibly double again and surpass $30 million.

Favorable pricing

While the U.S. dollar has stabilized recently, the price for U.S. beer is still viewed as attractive by importers in Japan and some other countries where changes in currency values have been substantial in the last several years. The United Kingdom and Sweden are the leading European markets for U.S. beer. The combination, meanwhile, of demand for U.S. beer from establishments catering to tourists and lower prices contributed to gains in U.S. beer exports to the Netherlands, France, Switzerland and Belgium in 1988. U.S. beer exports to the Netherlands increased from $35,000 in 1986 to $184,000 in 1987, to $342,000 in 1988, almost a tenfold gain in two years. Belgium is a relatively new market where the value rose from only $3,000 in 1987 to $247,000 in 1988.

Spain's entry into the European Community contributed to a marked rise in imports of beer from other EC countries. The relaxation of barriers also resulted in greater imports from some non-EC suppliers at the same time. U.S. beer exports to Spain increased from $92,000 in 1987 to $527,000 in 1988. Further gains should occur because of the increased distribution of imported beer, especially to tourist spots.

Italy is another expanding market for imported beer, particularly from other EC members. U.S. beer is not much higher in price there than some imported European beer brands. U.S. exports of beer to Italy were steady during 1986-1988, averaging over 300,000 liters annually or more than $200,000 annually.

West Germany could be a larger market for U.S. beer after 1992 when some specifications for imported beer are likely to change. U.S. exports of beer to West Germany increased from $20,000 in 1987 to $64,000 in 1988, but the value had been $66,000 in 1984. Duty-free ports provide an opportunity for U.S. products to have a limited market in West Germany.

Neighboring markets

U.S. beer exports to Canada increased steadily from $8.3 million in 1986 to $11.3 million in 1987 to $15.5 million in 1988. Recent moves to allow free trade between the United States and Canada should contribute to further gains in 1989. In fact, smaller U.S. brewers may be able to increase export sales to Canada, a market which has proven valuable to larger brewers.

Mexico was a growing market for U.S. beer in 1988 when the value reached $1.57 million, up from $173,000 in 1987. Sales of imported beer are increasing in tourist areas of Mexico. The 1987 boom in Mexico's exports of beer to the U.S. and a modest retreat in 1988 may have helped Mexican beer importers serving the international tourist centers to get better treatment in requesting foreign exchange for imports.

Caribbean markets for U.S. beer rebounded in 1988, following a loss of market share in the Bahamas and Netherland Antilles to European and Latin-American suppliers during 1987. Sales in these two markets remained below earlier peaks in 1988, but gains in the Dominican Republic, Cayman Islands and Turks and Caicos Islands contributed to a 10-percent rise in U.S. exports of beer to the Caribbean overall. While exports to the Bahamas declined 3.4 percent to $2.07 million, exports to the Dominican Republic rose from $14,000 in 1987 to $430,000 in 1988. Exports to the Cayman Islands increased 40 percent to $1.2 million. U.S. beer exports to the Netherland Antilles increased 22 percent to $695,000 in 1988, but this was still less than a third of the 1984 value of $2.15 million, when the U.S. share was larger.

Central America exports

U.S. beer exports to Central America increased 44.7 percent in 1988, mostly because of the 46-percent rise to $4.3 million in sales to Panama. Exports to Belize advanced 79 percent to $458,000, while those to Guatemala zoomed from $3,000 in 1987 to $62,000 in 1988.

U.S. exports of beer to Honduras tripled in 1987, reaching a value of $224,000, but remained steady in 1988. A similar pattern occurred in sales to Costa Rica in 1987, followed by a seven-percent gain to $158,000 in 1988. Exports to El Salvador made a tenfold increase in value to $81,000 in 1987, but dipped in 1988.

While South American countries seek to export more beer to the U.S., exports to South America declined by one-half in 1988 to only $324,000. Exports to Columbia were down 49 percent to $148,000. The unusual export of beer to Uruquay, valued at $137,000 in 1987, was followed by sales of only $7,000 in 1988. Exports to Paraguay were down 36 percent to $110,000 in 1988.

Africa is a growing market for both U.S. and European beer. U.S. exports of beer to Africa tripled in 1988, reaching $1.43 million. Morocco has emerged as a new market with purchases valued at $694,000. Changes in trade policy and efforts to provide supplies for foreign tourists contributed to the exports to Morocco. Exports to Egypt, meanwhile, declined 41 percent to $104,000 as European suppleirs took a greater share of the limited market consisting primarily of hotels catering to foreign tourists. A larger market in grocery stores is hampered by the shortage of foreign exchange.

Cameroon is a significant market for EC beer exports, and U.S. beer exports to this market doubled in 1988, reaching $207,000. Exports to Kenya reached $123,000 in 1988, following only occasional purchases in earlier years and none in 1987. A new market for U.S. beer opened in the Central African Republic, valued at $67,000 in 1988, and apparently related to demand from foreigners exploring for oil and minerals. Petroleum workers accounted for part of the sales to Angola where U.S. exports nearly quadrupled to $96,000 in 1988.

Non-alcoholic exports

Middle East imports of beer, meanwhile, are hampered by laws in some countries which forbid or restrict use of alcoholic beverages. However, non-alcoholic beer has become a major beverage in Saudi Arabia and the Gulf countries, competing with soft drinks bottled locally. U.S. exports of beer to the Middle East reached $2.9 million in 1988, nearly six times the 1987 value. A major reason for the advance was the tenfold increase to Saudi Arabia--a major importer of non-alcoholic beer from Switzerland and the EC--to $2.2 million. Apparently the U.S. has now entered this market in a significant way, although European suppliers still have over 80 percent of the sales.

Bahrain and the United Arab Emirates allow sales of alcoholic beverages, in contrast to laws forbidding this in Saudi Arabia. The land causeway from Saudi Arabia to Bahrain has added to Bahrain's tourist business. U.S. exports of beer to Bahrain reached $367,000 in 1988, double the value of 1987 exports. Exports to the United Arab Emirates tripled, meanwhile, reaching $270,000 in 1988. Iraq is a growing market for beer from trade agreement partners, especially Yugoslavia and Turkey, as well as a new market for U.S. ingredients used by Iraqi brewers. Oman is a growing market for beer imported from Europe and Australia. U.S. exports of beer to Oman nearly doubled in 1988, reaching $19,000.

Hong Kong tripled its purchases of U.S. beer between 1985 and 1987, as the value rose from $2.9 million to $10.5 million. The value dropped back to $2.9 million in 1988 as Hong Kong beer output increased. Wide swings in sales to Taiwan included a rise from $1.1 million in 1986 to $5.1 million in 1987 to a decline of 49 percent in 1988 as local output rose. Exports of U.S. beer to South Korea quadrupled in 1988, reaching $386,000.

U.S. beer exports to the South Pacific were up 46 percent in 1988, with sales of over $1 million to Micronesia and the Marshall Islands each. Exports to Australia doubled in 1988, reaching a value of $400,000, and sales to New Zealand also doubled.

New markets

The opening of new markets and unexpected sales to small markets could further boost U.S. beer exports in 1989. Iceland removed the ban on sales of beer with over 2.5-percent alcoholic content in early 1989, and may be a considerable market for imported beer in 1989, mostly from Sweden. The potential for sales of American beer in Iceland may range from $100,000 to possibly $1 million.

Another market with great potential, but with a number of barriers related to the allocation of foreign exchange, is the Soviet Union. No exports of beer from the U.S. to the Soviet Union were reported during 1984-1987, but in 1988 the value reached $16,000. Soviet beer imports from Europe, primarily for hotels and shops catering to foreign tourists, are rising. Czechoslovakia and East Germany are major suppliers, but EC members and Finland have also increased sales. Exports of U.S. beer to the narrow market now open in the international tourist centers could increase markedly. Some locations are desperately seeking American beer for sale to tourists.

Finally, Poland opened as a market for $153,000 worth of U.S. beer in 1988, with no purchases reported in the four previous years. Exports of American brands to tourist centers in Yugoslavia were at token levels in the past and could increase. Small sales to the public agencies serving international hotels in Romania, Bulgaria and East Germany may serve as exciting prospects for new exports of U.S. beer.
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Publication:Modern Brewery Age
Date:Jul 10, 1989
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