Hard landing
Following the announcement, the Finnish Food Workers’ Union on 25 March urged Carlsberg to cancel its plans to close the brewery in Pori in western Finland, warning the Danish brewer the move risked a rapid drop in sales.
The union added that Karhu, the brand of lager brewed in Pori, would lose its position as Finland’s best-selling beer if it were brewed at Carlsberg main Finnish brewery in Kerava near Helsinki.
The unions said Karhu was a symbol of western Finland’s heritage.
But Carlsberg reiterated its claim that aggressive beer price competition, rising alcohol taxation, increasing traveller imports and declining consumption made it impossible for the brewer to keep two breweries going.
Carlsberg is the market leader in Finland. Production in Pori amounts to 10 percent of Sinebrychoff’s total production volume, it was reported. The Pori brewery has 31 employees.
Depending on the employee consultation process, the Pori brewery is expected to shut down in September 2009.
Finnish beer sales fell 2.1 percent to 4.2 million hl in 2008. Total beverage sales (alcoholic and non-alcoholic beverages) dropped 2.5 percent. Only sales of long drinks rose. Almost 80 percent of beer is sold off-trade. On-trade sales account for just under 18 percent and Alko (the former alcohol monopolist retailer) sales for 2.6 percent. Over half of all beer sold is already packaged in cans. The share of beer sold in cans rose from 38 to 52 percent.
Carlsberg’s major competitor is Hartwall, owned by Heineken, following the takeover of Scottish & Newcastle last year.
‘The increase in alcohol taxation and the worsening economic climate have impacted on beverage sales’, says Timo Jaatinen, Managing Director of the Federation of the Brewing and Soft Drinks Industry. Taxation on brewery beverages was put up ten percent at the beginning of 2008 and by another ten percent at the beginning of this year. In connection with its mid-term review, the government has once again decided to propose new alcohol tax hikes.
‘Finland’s beer tax is already the highest in the European Union and almost five times as high as in Estonia. The new alcohol tax hikes will make the tax differences between the countries intolerable. The devaluation of the Estonian Kroon also poses a threat. These factors significantly heighten the risk of an explosion in private imports by travellers. Travel to Estonia hit a record peak last year and is still on the rise’, Mr Jaatinen said.
In an effort to glam up the beer category, Hartwall launched a beer that is intended to be enjoyed with food. Hartwall reckons that Finns are increasingly keen to cook more elaborate meals as cooking shows and food magazines have never been more popular. The new 1836 Classic Gourmet range was developed by brewmasters and chefs and includes a dark beer to be paired with meat dishes and a lighter lager to accompany fish and chicken.
