Carlsberg unloads stake in brewery URBB to CBC
Why did Carlsberg decide to sell its stake in United Romanian Breweries Bereprod (URBB) to its Israeli partner Central Bottling Company (CBC)? According to URBB’s CEO Shachar Shaine, URBB’s turnover in 2017 is to exceed EUR 120 million amid rising exports and local sales. URBB’s sales were nearly 335 million lei (EUR 74.6 million) in 2015. In 2016, URBB’s businesses reportedly increased by around 14 percent in turnover, while profit rose 40 percent.
“[In 2016] we gained market share, we have improved our market position and product mix and exports. We do not rely on a growing market, but on market share,” Mr Shaine told Romanian media in February 2017.
Mr Shaine refrained from making a forecast for 2017 as this is the first winter that Romania’s brewers will experience the full effect of the ban on smoking, which was introduced in March 2016.
Carlsberg entered the market in 1998. It acquired a 15.5 percent indirect stake in URBB and helped build a 500,000 hl brewery, whose capacity was eventually hiked to 2.1 million hl.
Since entering, Carlsberg has increased its stake in URBB to 23 percent, which probably did not give it much of a say in the running of the business and little in terms of profit shares. Carlsberg did not disclose how much it received from the sale, merely saying on 8 February 2017 that the net effect was “not significant”.
CBC, a privately owned Israel-based company, and Carlsberg know each other well as Carlsberg has already sold to CBC its stakes in an Israeli and a Turkish beer business.
URBB’s portfolio includes the brands Tuborg, Carlsberg, Holsten and Skol in addition to Granini juices. In 2016 it put its mineral water company Bilbor on the market, which had become insolvent, at a price of about EUR 5 million. Bilbor Mineral Water was launched in 2010 and involved an initial investment of over EUR 10 million for the construction of a bottling plant.
Romania’s beer market has declined from 18 million hl in 2012 to 15.9 million hl in 2015. URBB is the country’s number four brewer with a market share of 8 percent (1.3 million hl beer), basically unchanged from 2012.
SABMiller’s Ursus Breweries (31 percent market share) dominated the market in 2015, followed by Heineken Romania (29 percent), Bergenbier/Molson Coors (9 percent), and Martens from Belgium (3 percent). The five macro brewers provide jobs to over 4,000 people in eleven breweries.
In 2015 there were 15 microbreweries in Romania, up from only two in 2012, according to The Brewers of Europe.
