CEO of Austria’s Brau Union departs suddenly

Austria | What is going on at Heineken that two local CEOs resigned recently? In April, Jörg Lehmann, CEO of Germany’s Paulaner Group, in which Heineken has a 30 percent stake, bowed out. Then, on 15 June, Klaus Schörghofer, CEO of Austria’s leading brewer Brau Union, which has been fully owned by Heineken since 2003, stepped down.

Their departures were sudden and unexpected.

In the case of Paulaner, the official statement said that Mr Lehmann, 54, and the owners (Paulaner is 70 percent owned by the Schörghuber family) had divergent views on the future growth of the company. According to the trade publication Inside, the owners had set Mr Lehmann, a well-respected technologist who also served as the President of the German Brewers Association, a profit target, which he did not meet.

Chasing profit

Mr Lehmann had been promoted to CEO of Germany’s fourth-largest brewery group in 2018. The following year, said Inside, Schörghuber and Heineken determined that Paulaner Group should achieve an EBIT of EUR 100 million (then USD 114 million) in the medium-term, which would have made it one of the most profitable breweries in Germany. In 2019, the group’s turnover was put at EUR 700 million (Statista).

Despite his best endeavours – and covid did not help –, the group recorded an EBIT of only EUR 50 million in 2022, per Inside. This must have sealed Mr Lehmann’s fate.

Inside also estimated that Paulaner Group’s most recent annual output was 6.2 million hl beer, plus some 2 million hl of non-alcoholic beverages, of which 1.3 million hl were Paulaner Spezi, a cola and lemonade mix.

Doing things the Austrian way

The reasons for Mr Schörghofer’s departure from Brau Union and Heineken are less clear. The official press release was full of praise for Mr Schörghofer, 42, who has worked at Brau Union for some 18 years, mostly as a controller, before he was promoted to CEO in 2020.

Only at the end does the statement allude to Mr Schörghofer and Heineken differing over “priorities and further business developments”. Insiders say that Mr Schörghofer and his Austrian allies ran Brau Union more like an independent unit. They safeguarded the headquarters in Linz rather than move them to Vienna, they preferred to push Brau Union’s domestic brands to the detriment of the Heineken brand, while failing to submit plans as to how Brau Union could become more profitable. Heineken is said to be looking at cost reductions of some EUR 100 million, which, observers fear, might lead to brewery closures.

According to its website, the Austrian market leader (5 million hl beer output annually) operates nine breweries and four craft breweries in Austria, employing some 2,700 people. From what we hear, attempts at reorganising Brau Union floundered on Mr Schörghofer’s watch.

Brau Union quickly appoints new CEO

On 10 June, Brau Union announced that it has appointed Heinz Böhm, 51, currently Managing Director of Heineken Netherlands, to take over from Mr Schörghofer on 1 September. Observers say this is a clear indication that Heineken is now picking up the reins at Brau Union in earnest.