Economy Hits Beer — And Barley

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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 crisis, 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 percent 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.

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