Friday, February 18, 2011

Beer Industry News and Updates for 2/18/2011

  • SAM: $95.74
  • TAP: $45.60
  • BUD: $54.90
Well there certainly is a lot to discuss this week within the brewing industry. First off, China New Borun Company made the news this week again with some positive news for their shareholders. On Thursday the company announced that they have signed two letters of intent with parties in Sichuan Province. These two pre-sale letters of intent state that the company will provide 6,500 tons of their famous corn-based edible alcohol per month starting in the second quarter of this year to their customers in Sichuan Province. This volume will account for about 15% of the companies expanded total production for 2011. These agreements along with the others they have made since the opening of there Daqing Phase III facility will account for 90% of the companies projected production for this year.
Next, in the news was Molson Coors Brewing Company LLC. This week, MCBC announced their regular quarterly dividends that will be payable to their shareholders on March 15, 2011. The company announced that the quarterly dividends payable to their Class A and B shareholders will be US $.28. Also, Molson Coors Canada, Inc, the wholly owner subsidiary of Molson Coors Brewing Company, announced that they too will be paying quarterly dividends to their exchangeable shareholders in the amount of CDN $.28 as well. All dividends will be payable to their shareholders on record on February 28, 2011.
Another story this week deals with a news article written by Ian Wyatt of Seeking Alpha. Mr. Wyatt's article was written about two companies he feel has blossoming stocks for under $10. The reason this is important to me is that one of those companies he happens to be referring to is The Craft Brewers Alliance (HOOK) who is headquartered in Portland, Oregon. In his article he discusses the amazing growth seen by the Craft Brewers Alliance over the last 12 months. The growth he is discussing focuses on how HOOK has made a growth of over 250% in stock prices since March 1, 2010 where they closed at $2.26 per share. As of today HOOK reported a closing price of $7.78 which leads me to agree with Mr. Wyatt's analysis. Now, although I do agree that they would certainly be a wise investment, I also have to agree with many industry analysts who feel that the growth of The Craft Brewers Alliance will most likely plateau or show less significant increases over the next year versus the previous 12 months.My last topic for discussion this week deals with an interview that was done on Fox News on February 15th about the "Beer Stimulus Plan". Being interviewed here were Dan Kopman, Co-Founder of Schlafly Beer, Nick Matt, Chairman and CEO of Matt Brewing Company/Saranac and Leslie Henderson, CEO and Head Brewmaster of Lazy Magnolia Brewery.  In the interview these three brought for a point about their plea to lower the federal excise tax being imposed on micro brewers. The reason these companies feel that they have a valid argument is that although micro brewers only account for about 5% of the beer by volume in the U.S. the do account for 50% of the jobs with the brewing industry. Currently, the nations 1,700 micro brewers employ over 100,000 people in this country and that is why these companies feel they have a valid argument in their favor. Beyond that, if they are able to get this bill through congress it will also lower the cost to taxpayers per employee within this industry. Currently, it would cost taxpayers around $90,000.00 per person employed in the brewing industry and this bill would drastically lower that cost to taxpayers down to only about $4,000.00 per employee. Lastly, the succession of this bill would give the many micro brewers nationwide the needed capital to not only expand their businesses with much needed equipment but also the funding to be able to hire many more employees in our nations goal of lowering the unbearable unemployment rate that we face. I say it sounds like this will be a win-win for all parties involved and I certainly hope they will be able to get a favorable vote in congress.
Well that's all for this week so, don't forget..........."stay thirsty my friends!"

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