AB-InBev enters price wars
How silly of us to think that beer price wars are only a thing the Germans and the Brits engage in. In neighbouring Belgium brewers seem to have resorted to this last ditch effort too given that beer sales in the self-styled Beer Paradise have gone south for almost two decades.
For two days in September 2011, AB-InBev had an offer running at supermarket chains Spar and Delhaize which gave you one crate (24 x 25 cl) of Jupiler pils free if you bought at least EUR 20 (USD 27) worth of other AB-InBev beers.
The timing of the bumper offer says it all: hoping to drive up beer sales for Belgium’s top-seller brand Jupiler at the end of the third quarter, AB-InBev’s managers probably sought to meet volume targets and related bonus payments.
Beer sales for the third quarter (July – September) must have been awful. From what BRAUWELT International has heard, they declined in the high teens in July alone year-on-year. In August they dropped at a lower rate. Still, not good. Hence brewers felt they had to slash prices to prevent further volume losses in the third quarter.
However, if truth be told, AB-InBev’s September offer was also in response to a long-running special by rival brewer Alken Maes (Heineken-owned) for its Maes pils at the Carrefour hypermarkets. On certain dates, if you returned an empty crate of any pils brand, you got a full crate of Maes Pils free.
Alken Maes isn’t the only brewer to discount its pils beer. Prior to the Jupiler special, discount retailer Aldi had the Schultenbrau beer brand (brewed by Belgium’s Martens brewery) on sale for EUR 0.49 (USD 0.66) per 0.5 litre can.
Pils brands in Belgium usually retail at between EUR 9 and EUR 10 per crate plus deposit. In effect, a litre of Pils sells for EUR 1.0 to EUR 1.50.
Top-fermenting beers (at 6% to 11% ABV) are available for EUR 2.0 to EUR 3.0 per litre, while Trappist beers set you back EUR 3.0 per litre.
In November 2011AB-InBev and Heineken will release third quarter figures. Then we will know the true extent of this summer’s Belgian beer sales drama.
