Heineken’s revolving doors

We remember only too well what Heineken’s CEO Jean-François van Boxmeer said in February upon releasing last year’s financial results. He said that “in particular, the performance in the UK was below expectations as the combination of recession, on-trade downturn, unprecedented excise duty rises, the smoking ban and the fall in the value of the British pound made the market exceptionally challenging.”

In the UK, sales of Heineken’s beers in pubs, or on-trade, were down by 10 percent, while sales in supermarkets and off-licences, or off-trade, rose by just 0.5 percent.

Of its brands, Foster’s was its worst performer, with sales volumes down by 10 percent in 2008, although Heineken blamed this on a lack of promotional activity. Sales of John Smiths and Kronenbourg fell by 5 percent, which Heineken said was in line with the declining beer market.

However, if you cut through all the corporate embellishment, there remains the undeniable fact that Heineken was forced to write down EUR 389 million against the Scottish & Newcastle businesses it acquired last year.

If you are looking for a reason for Mr Blood’s departure, look no further.

Unfortunately, the general situation has not improved. UK beer sales dropped by 8.2 percent in the first quarter of 2009, it was reported.