Romania and Bulgaria join the European Union

Poor but sexy? When on 1 January 2007 the two countries completed their long-awaited accession to the EU, brewers in Romania and Bulgaria continued to go about their business as if nothing had changed. When it comes to beer, these two countries are already well integrated into the world market.

There is not a lot in which Bulgarians can take pride: Poverty? Organised crime? Corruption? On all these counts Bulgaria with its 7.4 million inhabitants (official figure as many Bulgarians live abroad as illegal workers) scores highly. Its neighbour Romania, with more than 22 million people, does not fare any better. No matter how hard they tried, the two eastern European countries could not shake off their past. But keeping them out of the European Union also seemed impossible. Where else could they have turned after the fall of communism? Both countries looked west – and the EU, it has to be said, looked east. Romania and Bulgaria both border on the Black Sea, which constitutes an important geopolitical field of gravity between the Atlantic and Central Asia. This is where the EU wanted to be: at a table, or literally on the seashore, with such heavyweights as Russia and Turkey and a few volatiles, the Ukraine and Georgia, both of whom also want to join the EU – eventually.

Having said that, integrating Bulgaria and Romania into the EU seemed like a good idea. Interestingly, as concerns the brewing industry, politics followed business. Because when it comes to beer, the two countries are already well integrated into the world market.

Were it not for the worst excesses of Soviet style power architecture, there would not be much to write home about from Romania and Bulgaria. Except: The quality of beer produced meets the highest European standards, while being traded at double lower prices than in the EU. Isn’t that something?

Bulgaria’s 2006 beer output reached 5.2 million hl, the Union of Brewers in Bulgaria announced in January. The annual consumption of beer in Bulgaria rose 14 percent to 68 litres per capita in 2006. This year’s growth is expected to slow down to 4 percent to 5 percent.

While the Bulgarian beer market has virtually all been acquired by international players, there is more room for consolidation within Romania, writes Lyle Frinks from Prague. In late 2006, the Turkish brewer Efes stepped out of the Romanian market, selling its share of the joint-venture to former partner InBev. It is estimated that international brewers have about 75 percent of the Romanian market. Notable local players include Bere Mures (1 million hl) and European Drinks (4 million hl).

The Romanian Beer Producers Association (APBR) represents the international players: Brau Union Romania SA (Heineken), Interbrew Romanian SA (InBev), United Romanian Breweries Bereprod SRL (Carlsberg) and Ursus Breweries SA (SABMiller).

The Romanian economy – and temperament – is exuberant, buoyed among other things by Renault’s revival of domestic automaker Dacia. “If you got it, flaunt it. That is the Latin temperament and life is short,” said a bank executive. This applies to cars, clothing, and, yes indeed, to beer.

APBR members had sales volume up about 20 percent in the first three quarters of 2006 and expect the overall Romanian beer market to reach 16 million hl for the year.

In the historic quarter of Bucharest, the traditional way to drink a beer was at the outdoor grill on Lipscani street: a plate of mici (lightly grilled, spicy, ground meat sausages, spices) and a glass of beer. Which beer depended on the specific payout counter, with at least four brands sold on the premises. While a vibrant example of local flavour, the slightly grimy Lipscani grill has remained virtually unchanged in the past decade, with only euro disco replacing the previous gypsy music.

But elsewhere in the Lipscani District, major changes are underway. A few blocks away, a microbrewery is being installed in the Carul cu Bere restaurant. (“the Beer Wagon”). This architectural gem is something of a cross between a Byzantine church and a German beer hall with its vaulted ceiling and stained glass windows. Carul cu Bere was an early meeting place for Romanian nationalists a century ago and has been returned to a descendent of the pre-communist era owner.

Between construction sites in the District, large beer gardens have sprung up, with international brands such as Tuborg and Carlsberg prominently displayed on the table umbrellas. With a regular schedule of rock bands on the itinerary, this is a top place for the up and coming to be.

Brewers able to tap the vibrant Romanian social life are altering how and where beer is consumed. Last summer, the APBR said draught beer was a record 8.5 percent of its members’ sales volume, up from 6.3 percent the previous year. The association said this shows Romanians are spending more of their spare time in bars, pubs or restaurants.

Despite the changes in restaurants and beer gardens, the Romanian beer market still comes down to the tiny neighbourhood store where consumers can buy beer in a variety of bottles, PET plastic, and cans. All told, the APBR says there are 65 different brands in the market.

Romanian beer consumption was about 70 litres per capita in 2006. As the Romanian economy drives into Europe, look for this figure to grow.

Timisoreana becomes leading beer brand

SABMiller’s brand Timisoreana rose to top beer brand in only six months, boasts SABMiller. “Ordinary people and their extraordinary stories” is the communication platform launched last year by Timisoreana, a strategy that led the beer, whose brand is closely linked to the first brewery in Romania, to a new stage. In a country where beer is a very competitive category (number two media spender after telecom), Timisoreana has hit a market share of 10.8 percent in December 2006, says SABMiller, passing by its competitors and becoming the leader in the beer market.

SABMiller has been operating in Romania since 1996 and acquired the Timişoara brewery in 2001. Its local brewer, Ursus, is the second largest brewer in Romania with an estimated annual market share of 22 percent behind Heineken’s Brau Union. Ursus Breweries currently has four breweries with a total capacity of more than 3 million hl and 1,300 employees. The company conducts its operations in Bucharest, Cluj-Napoca, Timişoara, Buzău, Braşov and Tunari. The brands brewed by Ursus Breweries are: Ursus, Timişoreana, Ciucaş, Stejar, Peroni and Pilsner Urquell.