Heineken sells stake in Ottakringer – will Paulaner be next?

Eleven years ago, BBAG acquired a minority interest in the Viennese Ottakringer brewery – which was five years before Heineken bought BBAG. Although Heineken professedly wanted out of Ottakringer immediately, it has taken Heineken and Ottakringer six years before they could go their separate ways. The final bone of contention was Ottakringer’s plan to integrate the mineral water brand Vöslauer into the company, which would have doubled Ottakringer’s turnover. It presently stands at EUR 80 million annually.

Both parties would not disclose the terms of the deal.

Ottakringer (592,000 hl beer) is Austria’s number four brewer, behind Brau Union (owned by Heineken), which has a 50 percent market share, the Stiegl brewery in Salzburg (1 million hl) and the Egger brewery in Unterradlberg (650,000 hl).

Austria’s beer market is flat. Growth is achieved only at the price of crowding out the competition. During the first half of 2009, beer production in Austria declined 5 percent, while the number of breweries remained constant: 67 breweries and 108 brewpubs in a country of 8.2 million people.

Heineken reported that during the first six months of 2009 beer production at its 60 breweries in central and eastern Europe dropped 9.8 percent to 22.5 million hl compared to the same period last year. Turnover went down 14 percent to EUR 1.5 billion, mainly because of currency devaluations.

Austria did not perform any better: Brau Union registered a volume decline of 11 percent during the first half of 2009.