Break The "Neck Jam" Of Imported Barley

With malt and malt, it's amazing to make a bottle of malt and water. Can Chinese enterprises brew a bottle of domestic beer from raw materials to packaging?

The answer is hard.

"China's dependence on beer raw materials has been very high, which is the biggest short board in the beer industry chain! In 2019, the import of barley accounted for 88% of the market volume of that year. " On October 23, He Yong, Secretary General of China Liquor Industry Association and chairman of beer branch, said exactly what He Yong said at the signing ceremony of the new model of strategic cooperation between Budweiser Asia Pacific (01876. HK) and Jiangsu Nongken Group Co., Ltd. (hereinafter referred to as Jiangsu Agricultural Reclamation).

"China's beer production has ranked first in the world for 18 consecutive years, and China has already become the world's largest beer consumption market. However, the lack of self supply of barley as the main raw material and the long-term dependence on import are not commensurate with the status of a big beer country Zhang Wujiu, chairman of beer raw materials Committee of China Liquor Industry Association and chief consultant of China Food Fermentation Industry Research Institute, pointed out.

Australia is the largest source of barley import in China, and the import proportion has been higher than 70% since 2011. International barley import volume and import price fluctuated greatly, both loss and prosperity. "In May this year, China's international trade policy of" double anti dumping "against Australia and wheat was tightened. In the future, the trend of import barley restricting the development of China's beer industry will be more obvious, "He Yong said. Developing domestic malt is the only way to break through the" neck jam ".

Domestic raw materials are in urgent need! Recently, the China Liquor Industry Association has called together the leaders of Budweiser Asia Pacific, China Resources, Qingdao beer, Carlsberg and Yanjing Beer, which are the five largest beer giants in the Chinese market. With the association as the leader, the association has taken the lead in dialogue with relevant agricultural departments and organizations to promote the expansion of domestic beer raw material base and improve the supply quality.

I didn't expect that it was Budweiser company from Belgium, the world's largest beer brewing enterprise, that fired the first shot of China's domestic beer and wheat raw materials war.

China barley industry with shrinking planting area

On October 23, Jiangsu Nongken malt Co., Ltd., a ship loaded with golden wheat stopped at the Sheyang River Wharf, the inland river, and was transported to the company's warehouse by 10 ton heavy trucks for processing. With an annual output of 250000 tons of malt, Jiangsu Nongken malt company has set a record of the highest single investment in agricultural industrialization projects in Jiangsu Province in 2008.

Sheyang County of Yancheng city is located in the north of Jiangsu Province. After wintering last year, the winter wheat here was harvested in May this year. Under the same golden autumn sun, this batch of wheat that had just been put into storage came from Canada as far as possible. It was transported by cargo ship after landing at Dafeng port in Yancheng via the Yellow Sea.

The person in charge of Jiangsu Nongken malt Co., Ltd. told the 21st century economic report that it will take about one month for barley to be transported back to the east coast of China from North America. The price of foreign raw materials has risen sharply this year. Since October 1, the price of French malt has risen by about 30 US dollars / ton. At present, the CIF price of French wheat has risen to about 395 US dollars / ton, and that of Jiamai is about 420 US dollars / ton. However, malting factories have to "wait for rice to cook".

According to customs data, from 2012 to 2019, the number of imported barley in China increased year on year in half of the year. Especially in 2014 and 2015, the import of barley doubled, reaching 5.41 million tons and 10.73 million tons respectively. This is related to the bumper harvest of agricultural products in Australia, Canada, France and other major importing countries, and the large export volume of beer wheat.

Barley is not only the raw material of beer, but also can be used as feed as corn and sorghum. The three are playing on the seesaw. When the price of corn in arrears rises, the import of barley soars. However, this year, the price of Jiamai and French wheat has increased, mainly due to the decline in Australian wheat imports.

Australia is the largest source of barley import in China. The proportion of barley import in most years is higher than 50% of the total import, and has been higher than 70% since 2011.

But the market has changed dramatically this year. As early as May 18, the Ministry of Commerce issued announcement No. 14 and No. 15 of 2020, ruling that there were dumping and subsidies on imported barley originated from Australia, which caused substantial damage to the domestic industry. Since May 19, the Ministry of Commerce has imposed anti-dumping and countervailing duties on Australia. The anti-dumping rate is 73.6%, and the countervailing duty rate is 6.9%. The collection period is five years. After the announcement, the cost of Australia Wheat Import increased directly. In July, Australia's wheat imports fell 79.4% month on month.

On September 1, the General Administration of Customs announced that the registration qualification of Australian CBH grain Pty Ltd's barley exported to China was revoked and the barley import to the enterprise was suspended. The Customs Department has detected several quarantine pests such as Bromus durum, French wild oats, Solanum nigrum, wheat stripe mosaic virus and other quarantine pests in barley exported to China by the enterprise. CBH is Australia's farmers' cooperative organization and Australia's largest grain exporter.

Subsequently, Australian wheat lost its price advantage, and French wheat and Jiamai rose. Behind the competition of big beer wheat countries for Chinese market is the gradual shrinkage of domestic barley planting area due to poor economic benefits.

As early as October 2018, the China International Chamber of Commerce submitted an application for an anti-dumping investigation on Australian barley to the Ministry of Commerce, saying that in recent years, the "volume increase and price decrease" of Australian barley imports is very obvious. Among them, the import volume increased from 3.88 million tons in 2014 to 6.48 million tons in 2017, with a significant increase of 67%; while the import price decreased from $288.72 per ton in 2014 to $198.05 per ton in 2017, a decrease of more than 31%. Affected by this, China's domestic barley planting area decreased during the same period.

According to the data of the National Bureau of statistics, from 2013 to 2018, the sown area of barley in China decreased year by year, from 440 thousand hectares in 2013 to 262 thousand hectares in 2018. China's barley production also showed a declining trend. In 2018, China's barley output was 956500 tons, a year-on-year decrease of 12%.

Budweiser starts domestic raw material war

The tariff of Australia and wheat has been raised, but the domestic beer and wheat can not keep up with it. China's beer raw material market is still faced with the attack of wolves. After being "choked" for a long time, the price is naturally subject to other countries.

After harvest, malt is made into malt by malting plant, and then transported to breweries. The lower reaches have a loss or a meager profit, and the malting factories that earn processing fees have a better life. In fact, affected by the shrinking of domestic barley production, most malt factories in Gansu, where barley is produced, have closed down. A few years ago, when Carlsberg acquired Chongqing beer (600132. SH) to integrate assets in East China, it also stripped off Jiangsu Jinshan beer raw materials Co., Ltd., which had poor efficiency.

"Domestic beer raw materials have been in a state of depression. On the surface, the purchase price has hit farmers' confidence, but in fact, the beer raw material cultivation industry still continues the small-scale peasant economic model of individual planting, and the traditional cultivation methods and backward management and storage methods have made the industry lose the foundation for sound development. In addition, the state has almost no preferential policy support for the cultivation of beer raw materials, which makes it difficult for China's beer industry to rely on imports As early as 2014, the annual work report of beer branch of China Liquor Industry Association pointed out the root cause of backward barley planting in China.

Domestic beer wheat urgent! To rebuild the raw material industry chain, we have to start from the field.

Budweiser, the world's largest beer giant, is the first to see the raw material crisis.

On October 23, in Sheyang County, Yancheng City, Jiangsu Province, Yang Kai, vice president of purchasing and sustainable development of Budweiser Asia Pacific, a subsidiary of Budweiser company, and Liu Yaowu, deputy general manager of Jiangsu agricultural reclamation, signed the strategic cooperation agreement with farmers' representatives on October 23.

The three parties agreed that farmers would transfer their land to Jiangsu Agricultural Reclamation group by signing the land transfer agreement, and implement the scale planting of unified planting and unified management. Budweiser Asia Pacific purchased barley from the land transfer policy. Jiangsu Agricultural Reclamation Group employs local farmers in busy farming season, and increases farmers' property income through land circulation and flexible employment.

Yang Kai said that in this cooperation, Budweiser Asia Pacific plans to purchase 25000 tons of barley annually, 50000 mu of land for cooperative planting, benefiting 4000-5000 households, so as to improve the economic benefits of the land. The high-quality domestic beer wheat purchased by Budweiser Asia Pacific will be used to produce Jiangsu Regal beer, a local brand purchased by Budweiser Asia Pacific, so as to realize the localization of beer raw materials.

"We've been working with Budweiser for eight years." The person in charge of Jiangsu Nongken malt Co., Ltd. told the reporter of the 21st century economic report that since 2012, Budweiser has introduced hundreds of excellent malting barley lines from the United States and sent a full-time agronomic team to carry out local adaptive planting and breeding in Jiangsu Province.

Jiangsu Province is the main grain planting area in China. The agricultural production capacity has been enhanced and modern agriculture has been further promoted. According to Liu Yaowu, deputy general manager of Jiangsu agricultural reclamation, the land area of the group's reclamation area is 1.83 million mu, including 1.53 million mu of agricultural land, 200000 mu of construction land and 100000 mu of unused land. The 21st century economic report reporter saw in the malt company that it was also a malt research base jointly established with Jiangnan University.

However, it is not easy for Budweiser, which produces high-end and super high-end beer, to meet the requirements of beer production.

"We're on a detour." On October 23, a person who had been responsible for purchasing raw materials from Budweiser Asia Pacific told the 21st century economic report that as early as 1996, Budweiser began to breed malt in China, hoping to find areas with similar climatic conditions at the same latitude as North America. However, after years of practice in Inner Mongolia, the yield of barley per mu is far less than that of wheat, and the large-scale planting is less and less. In addition, the barley producing area is far away from the malting plant, and the cost of raw material processing and transportation is rising, so the breeding of high-quality beer wheat is not smooth.

"Domestic beer enterprises are also aware of the long-term existence of raw material shortage, but it is Budweiser that has been insisting on feeding agriculture in action." Hao Jianqin, an expert at the China Food Fermentation Industry Research Institute, who has been engaged in the research of beer raw materials, said.

After Budweiser took the lead in starting the domestic raw material war, 21st century economic reporter learned that with the turning point of beer industry performance this year and the enhancement of profitability, Anhui Province, a large traditional agricultural province, also extended olive branches for barley cultivation to China Resources beer (00291. HK), a domestic beer giant.

"Beer competition has now entered the product era from channel driven." In an interview with the 21st century economic report reporter, He Yong said that at the closed door meeting held by the five major beer giants recently convened by the China Liquor Association, it was unanimously agreed that the competition in China's beer market dominated by high-end, personalized and differentiated products is in essence the competition of raw materials.

What is differentiation? For beer, he says, it's the uniqueness of the flavor. Where does the flavor come from? Raw materials. The agricultural characters and varieties of malt and hops are mainly reflected in the flavor.

"The typical flavor of wine depends on the emphasis on local conditions and the cultivation of raw materials." He Yong said: when the localization rate of beer raw materials reaches 50%, why can't Chinese beer label the beer producing area on the outer package of the product like wine, so that the value of the production area can finally be expressed as the market value?

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