Noting the UMG presentation.

Firstly, I suppose I like the framing described below on malt, mindful that 90% of it goes straight into beers.

The next 5% goes into whisky. Still, it’s not the point of the note. Instead, our focus is the outlook statement, shown below.

I am thinking that in a market looking for pricing power, none of this screams “easy pass through”.

Beer consumption, in general, has been declining for a long time per capita, but unlike, say, cigarettes (where prices rise as volumes decline), this is a clear consumption preference shift over time towards wine, cider, and well, anything else.

The point (perhaps clumsily made) is that consumer preference shifts don’t auger well for pricing power when something acute hits, like barley prices going to the moon, which they have.

UMG is very interesting to us and is a fine play for an absolute return oriented strategy, although not quite yet one for the flagship core portfolio.

The valuation support is there, the “reopening play” thematic is there, the company itself is a good operator within the industry, and when UKR-RUS hostilities cease, a solid catalyst will present itself (the falling wheat/barley prices).

But not quite yet.

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