(It's a recipe for disaster)
From the Wall Street Journal's The Source blog:
This is becoming a worldwide problem. On Nov. 1 we saw "Ethanol Crisis: "Australian rains hold key to malting barley prices":European brewers face a hangover from this seasons’ poor harvest as a fall in malting barley may force them to use lower-quality feed barley to make booze.
Known as the ’soul of beer’ because of its importance in determining flavor, barley markets have suffered this year as drought all but halted supplies from the world’s largest exporter, Ukraine, and cut brewing-quality output from European Union producers.
In a report released this week, French grain analyst Strategie Grains revised down its forecast for EU malting production this season to 10 million metric, 31% lower than in 2009-10, due to quality problems for producers in the north of the bloc.
Lower production is also playing havoc with malting barley prices, which have more than doubled since May. In November, French winter malting barley prices increased €7 month on month to €194 a metric ton, while spring barley was up €6 at €212 a ton.
For beermakers, this poses a serious problem: buy whatever malting barley is available, or adjust the specifications for making beer to use lower-quality grain normally reserved for animal feed.
“What brewers are asking themselves is: if they don’t want to pay the premium can they manage with a lower grade commodity?” said David Dowty, group sales and trading director of the U.K.’s largest arable co-operative, Openfield.
He reckons constrained supplies of malting barley, together with plans from the EU to release around 2.8 million tons of feed barley from intervention stocks in the near future, will make using lower-quality grain become increasingly attractive for brewers....MORE
Uh oh.Now I hear a faint echo of 1923 (from a May 2007 post):
If you thought the Bondi Beach riots* were bad what would happen with higher prices for Tooheys?...
"Beer prices are a very emotional issue in Germany ..."
"It's absolutely outrageous that beer is getting even more expensive," Glutsch said, gulping down the last swig of his half-liter dark beer at lunch. "But there's nothing we can do about it - except drinking less and that's not going to happen."...
...This is serious. Does anyone remember what happened the last time Bavarians got pissed and pissed off?
Lousy architecture, dedicated to the memory of those felled 8-9 Nov., 1923.In the words of Hermann Goering: "Shut up. You've got your beer, haven't you?"
The corporate history, current back to 1920, is:
Inbev acquired Spaten-Franziskaner-Löwenbräu-Group in 2004 which was created by the merger of Spaten and Lowenbrau in 1997. Lowenbrau aquired Burgerlisches Brauhaus (BB) in either 1920 0r 1921. On Nov. 9, 1923 BB owned the Burgerbrau Keller, where a secular religion was founded, complete with myths, heroes, icons and a messiah.
All the companies were publicly held, although I can't imagine the markets were very liquid in April, '45.