The taxman’s new found modesty

Poland’s lower house of parliament, the Sejm, recently passed a bill which would lower the excise duty on beer by 30 percent as of May this year when Poland and nine other states will join the European Union. The bill still awaits the president’s signature.
Polish brewers have long lobbied for a lowering of the excise regime in order to preserve Poland’s competitiveness in a common European market. In Poland, today, one must pay twice as much in excise for every half-litre bottle than in neighbouring Germany, the Czech Republic, Lithuania and Slovakia. For the nine months to September 2003 Polish breweries registered a sales volume of 21.5 million hl beer, an increase of 3.6 percent over 2002. Okocim currently controls 14 percent of the Polish beer market..

More than meets the eye

Carlsberg-Tetley and Scottish Courage announced that they are in discussions to launch a new independently managed technical services company in the UK. According to an official statement, this company shall provide the equipment and associated support to dispense draught beer from cellar to glass.
Both parties believe that this proposal is the best way to secure significant benefits for customers, including enhanced services, quicker response times and unrivalled product quality. Furthermore, benefits would be derived through streamlined processes, reduced administration costs and a reduction in duplicated activities.The new company, Serviced Dispense Equipment Ltd (SDEL), would own all the dispense assets of both brewers. Mike Foster and Mr. Nick Bryan respectively..

Price war

The government may not like it, but brewers Ringnes and Hansa Borg have started a fierce price war last autumn in an effort to counter falling beer sales. Norway’s two largest brewing groups, Carlsberg-Ringnes (4 breweries) and Hansa Borg (3 breweries) control over 85 percent of the beer market. The rest of the 2.3 million hl market is shared by five independents and four brewpubs. At the end of 2002 official per capita beer consumption was 52 litres. Since then beer sales seem to have dropped as Norwegians have grown more and more displeased with their country’s high excise regime on alcohol. The Norwegian Minister of Social Affairs, Ingjerd Schou (Conservative), voiced her concern to the local media and said: "It is regrettable that the price of beer goes down. This is not what we want..

Beer exports soar in 2003

Hats off - last year Italy’s beer exports rose 38 percent over 2002 according to Assobirra, the national association of beer producers. What may seem a huge increase is really no big deal, as the country’s beer exports in 2002 amounted to less than 700,000 hl. Beer imports on the other hand, stood at 4.4 million hl in 2002. In its preliminary market report for 2003 Assobirra omitted to mention how imports had fared last year but given the rise in beer production of 7.1 percent to 13.5 million hl and the increase in beer consumption from 28 litres to 30 litres per capita, it can be assumed that beer imports went up too. Among Europe’s beer producing countries, Italy ranks 12th with 16 major breweries producing and distributing 120 brands.

Holsten’s sales decline ten percent

Following the introduction of the compulsory deposit on cans, Holsten’s domestic sales in 2003 suffered a massive set-back. Despite a slight increase in international sales, last year’s bottom line still showed a decline of 10 percent to 12.9 million hl. As a consequence, turnover dropped 9.8 percent to EUR752 million. Nevertheless, Holsten declared its 2003 annual results "satisfactory". As Holsten had been one of the major supplier of supermarket own-label beers, the sale of beer in non-returnable container, i.e. cans, suffered most (-73.3%) when discount chains began to de-list their beer brands altogether. But soft drinks in non-returnable containers were affected too: they fell 11.3 percent to 3.5 million hl. Holsten’s beer sales outside Germany, however, grew 2.6 percent to 1.8%)..

Can’t blame it on the weather

Despite a scorcher of a summer, beer sales in Germany (excluding export) declined 2.1 percent to 105.5 million hl last year. Beer mixes, which used to be all the rage, have dropped in volume by 2.6 percent to 2.7 million hl. Brewers blame the introduction of the compulsory deposit on non-returnable beverage con-tainers, especially cans, for the decline in sales. Consumer loyalty to the product category has dwindled fast. Apparently, when Germany’s discount chains, which sold large amounts of beer in cans, de-listed beer altogether –-as they did not want to faff around with empty containers and deposits - consumers remained faithful to their one-stop-shopping habits. Instead of buying beer elsewhere, they just bought what was available beverage-wise at their favourite discounter.

Brau und Brunnen sold

On 13 February, Germany’s number four brewer, Brau und Brunnen (B+B), was finally sold to the Dr. Oetker Group. The diversified family concern Dr. Oetker (shipping, food, champagne, beer, mineral water) is not only Europe’s leading pizza baker. It has also a large stake in the German beer market (7.8%) with its Radeberger Group (Radeberger, Clausthaler, among others), which made it the third-largest brewer before the acquisition. Traditionally, Dr. Oetker has had large cash reserves, which is why it probably paid for B+B out of its piggy bank. Dr. Oetker/Radeberger had been considered the most suitable suitor for B+B as the group would have reaped the highest synergies, once production in both Dortmund and Berlin (where they have a brewery each) would have been concentrated.5 billion..

Nordic Fortress moves southern wall

It did not really come as surprise when Carlsberg announced in January that it was to buy Germany’s second-largest brewing group Holsten for EUR1.1 billion. Having sold its Hannen brewery to the German discount beer producer Oettinger in July last year and their contract brewing agreement expiring this year (or so rumours claim), Carlsberg had manoeuvred itself into a situation where it was short of at least 700,000 hl of production volume in Germany for its Tuborg and Carlsberg brands. Hence it had to clinch a deal ... and soon. Just as well that Holsten had been on the market for some time. Carlsberg also made a voluntary public offer to buy all outstanding shares until the end of March. The offer is conditional upon a 75 percent acceptance rate.1 or EUR70.5 per hl..

Let’s move together

It may just be speculation or a clever leak but according to Danish press reports three Scandinavian brewers are teaming up to counter the dominance of Carlsberg in their respective domestic markets. Denmark’s Bryggerigruppen, Sweden’s Spendrups and Norway’s Hansa Borg are planning a strategic alliance, which will include marketing co-operation and joint purchasing. The move, if it were true, has taken few by surprise as the three brewers have long been involved with each other through Bryggerigruppen’s and Spendrups’ joint 40 percent stake in Hansa Borg. Earlier this year, the Danish press also reported that Carls-berg was losing its cache in its home market, as customers opted for foreign brews and those made by Bryggerigruppen (Faxe)..

Purchase of BBAG and Brau Union completed

Heineken announced that it has successfully closed the public offer to purchase the remaining 29.51 percent of the outstanding shares of Brau-Beteiligungs-Aktiengesellschaft ("BBAG") and 31.22 percent of the outstanding shares of Brau Union Aktiengesellschaft ("BUAG"). The Heineken group now owns 98.73 percent of the shares of BBAG and 98.7 percent of the shares of BUAG. The investment involved in the purchase of these remaining outstanding shares is EUR 711 million and is funded from existing cash resources and the EUR1.2 billion syndicated revolving credit facility that was obtained in December 2003. Heineken launched the public offers following its acquisition of Getränke-Beteiligungs-AG ("GeBAG") in which Hein-eken currently holds 85.58 percent..