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European Business News – Week ending August 27, 2010

 Breaking News
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  • Thirsty Business – How Water Reuse Can Benefit the Food and Beverage Industry By Martin Kunz, EMEA Segment Leader, Industry for Xylem’s Applied Water Systems business Only 2.5 percent of the world’s water is fresh water, and of that, only one percent is accessible as much is trapped in glaciers and snowfields. By one estimate, global fresh water demand will exceed supply by 40 percent in 2030 if current [...]...
  • Hilton Food Group to Move into UK Fish Processing Hilton Food Group, the UK-based specialist international meat packing business, has agreed to acquire Icelandic Group UK (Seachill), a leading chilled UK fish processor, for cash consideration of £80.8 million. The acquisition will provide Hilton with entry into the processing and supply of fish in the UK. Robert Watson OBE, chief executive of Hilton Food Group. Founded [...]...

European Business News – Week ending August 27, 2010

August 20
10:30 2010

Brewing and dairy were prominent within the European food and drink
industry during the past week. International brewers Heineken and Efes
Breweries, despite its exposure to the troubled Russian beer market,
both produced solid first half performances. However, the beer market
in Europe is likely to remain weak due to constrained consumer
spending and planned austerity measures across many countries.

The outlook for Russia is improving even in the wake of significant
price increases after the imposition of higher excise duty. Market
leader Carlsberg now expects a high single-digit percentage decline
for the Russian beer market for 2010 – an improvement on the low
double-digit percentage decline originally anticipated.

Meanwhile, SABMiller, the world’s second largest brewer, is
considering launching a £7b bid for Foster’s beer business, which is
one of the few remaining ‘major’ targets within a consolidating global
beer industry.

In the dairy industry, Glanbia, the international nutritional
ingredients and cheese group, delivered strong revenue, profit and
margin growth in the first half as its Irish dairy ingredients
business was restored to profit. While volatility continues to be a
feature of global dairy markets, a degree of stability has returned.
Full year 2010 pricing is expected to be broadly in line with five
year averages but in most instances below the market peak of 2008.

In Britain, farmer involvement in UK dairy processing is set to deepen
with Arla Foods Milk Partnership looking to increase its investment in
Arla Foods UK, as the continental dairy co-operative model and the
benefits of vertical integration continue to find favour with milk
producers. Of course, Britain’s two largest dairy co-ops, First Milk
and Milk Link, have been expanding their processing activities despite
the collapse of a third co-op, Dairy Farmers of Britain, last year.

French group Lactalis consolidated its standing as one of the world’s
leading dairy processors and increased its sales in Spain to Eur1.2b
following approval of its Eur630m acquisition of Ebro Puleva’s dairy
arm. Having disposed of its sugar business to Associated British Foods
for Eur526m, Ebro Puleva is now focused on rice and pasta.

Indeed, acquisition and merger activity is gathering momentum after
remaining subdued throughout 2009 and the early part of 2010.

Campbell is considering a £1.5b break-up bid for United Biscuits with
PepsiCo, Kraft Foods and Kellogg other possible US-based suitors.
However, selling the biscuits and snacks business for the desired
price may prove problematic for UB’s private equity owners when the
prospect of rising grain prices is likely to cause a sharp jump in raw
material price inflation in the bakery sector.

Nestle has strengthened its balance sheet and its acquisition
‘war-chest’ following the $28.3b sale of its remaining 52% sale in eye
care business Alcon.

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