Big harvest, decreasing demand for malt

After several years of impressive growth the worldwide consumption of beer could remain flat this year as the economic downturn hurts demand.

 Between 2005 and 2008, worldwide beer
production rose 14 percent to 1.8 billion hectolitres to meet rising
consumption, especially in emerging countries. After rising 5.3
percent in 2007, global demand had been forecast to grow by 2 to 2.5
percent in 2008.

"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," Alain Le Foch, Malteurop's
managing director, said. In China, for example, the amount of malt
used to make a hectolitre of beer has fallen to 7.75 kilograms
versus 13 kilograms on average in Europe. In Russia, where beer is a
relative luxury, malt firms have cut capacity by 25 percent,
Interbrau's Girard said.