Focus on new plants: Browar Kielce, Poland Compact and clear lay-out

Since 1996 Palm has a joint venture with Browar Kielce - a small Polish brewery in Kielce - in the southeast corner of Poland. Kielce is a medium-sized town of 88,000 inhabitants, 170 km from Warsaw towards Kattowice.
At first only a Pils type beer was brewed. The name became Browar Belgia and the Pils was modified and upgraded to "Belgia Pils-Belgian Style", refering to the excellent Belgian brewing tradition. The Palm brand was introduced in ’98 and is very successful so far.

Sales rose from 15,000 hl in ’95 to 80,000 in ’98. Production could barely follow the sales, and at first some investments raised production capacity at the original site. First an existing chicken slaughter-house had to be partly dismantled. The roof was completely renovated.
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Yes, on condition that ...

The Spanish government’s competition tribunal has finally released the conditions under which Heineken can complete its acquisition of Cruzcampo (5 breweries) announced in June last year. The deal promised to raise Heineken’s share of the market to about 40 per cent, putting Heineken ahead of the brewers Mahou and San Miguel which are owned by the French Danone group.
The Spanish government expects Heineken to divest one sixth (17%) of its production capacity and storage facilities. It further calls on Heineken to sell all its beer brands in Spain with the exception of Heineken, El Aguila and Cruzcampo. On top of that Heineken was ordered to lift exclusivity clauses in its contracts with hotels and restaurants and restrict its production and distribution licenses with other groups..

Baltika Brewery receives EBRD credit

St. Petersburg’s Baltika brewery, which is majority owned by Baltic Beverages Holdings, itself a joint-venture of Scandinavian brewers Pripps Ringnes and Hartwall, signed a credit agreement with the European Bank for Reconstruction and Development (EBRD) for US$40 million. The credit has been granted for seven years and will be used to implement strategic development programmes aimed at raising production and developing the company’s distribution network in Russia. In 1998, EBRD already signed a loan agreement with Baltika’s St. Petersburg malting subsidiary. Baltika was founded in 1990 and joined BBH in 1993. Baltika beer is sold in more than 140 Russian cities. In 1998, Baltika produced 4.9 million hl of beer. It expects output to be even higher in 1999..

Beer market booms again

The Russian brewing trade has a resource at its disposal that is the envy of many western countries: a younger generation. With the turn from the vodka of their fathers’ to "hip" beer, the young generation of Russian consumers of the brewing trade are painting a rosy picture for the future. Even if it first takes full effect in the next generation believes Eirat Chairullin, president of the 2-million hl Krasny Wostok Brewery, himself still at a young age of 29. All the more time for long-term the planning of the brewing trade strategists.

The per capita beer consumption of the 146-million Russian population reached 23,3 liters in 1998. An virtually gigantic increase of nearly 50% in only two years. A paradoxical situation arises now and then.6 million hectoliters to 32.
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One to go

Life is tough north of the Arctic Circle, especially for a brewer. Long winter nights, few consumers and difficult distribution do not make for easy living. Now Ringnes’s most northern Norwegian brewery, the Nordlands brewery, is set to close because it does not have a canning line. In a matter of less than a year, canned beer has secured 30 per cent of the Norwegian beer market. Ringnes, which is owned by the Orkla group, operates five breweries in Norway, but Nordlands may soon find itself to be the odd one out.

Beck’s output stable

Contrary to Germany’s beer market declining 3.9 per cent in 1998, Brauerei Beck managed to maintain its output level during its financial year 1998/99 (ended June 1999). Again Beck produced 5.4 million hl of beer, of which 2.6 million hl were exported. The brewer’s export ratio climbed 3.5 per cent points to 48 per cent. In 1998/99, the volume of Beck’s brewed under licence declined by 12 per cent, due to the economic problems in China and Thailand.
The group’s total sales were DM1.6 billion (US$850 million), a drop of 1.2 per cent year on year. Beer sales were DM983 million (US$520 million), down from DM994 million in 1997/98. Sales of soft drinks rose to DM339 million from DM332 million, while sales of glass containers fell from DM251 million to DM238 million.5 million from DM52..

Holsten Group to become top brewing group

After a surprise take over of the family-owned König brewery in Duisburg in January, the Hamburg based Holsten Group has become Germany’s major brewing group. It now controls 10 per cent (or 10.4 million hl) of the domestic market.
Holsten has been on a shopping spree for premium brands for some time, buying the regional brewer Licher (1.2 million hl) last August.
The prestigious König brewery (2.2 million hl), which was ranked 11th of German breweries in 1998, brews two brands with national distribution: the König Pilsener and the non-alcoholic Kelts.
While König has established strong links with the on-premise trade, Holsten has focussed on the food retail sector. No financial details of the deal were released..

Ownership structure under review

Carlsberg knows how to take everybody by surprise. The Danish brewer announced that it would sell its non-core businesses and review its ownership structure. Its 43 per cent stake in the Copenhagen amusement park Tivoli will have to go as well as its 61 per cent stake in the industrial arts company Royal Scandinavia. Moreover, Carlsberg is reviewing the financial and legal aspects of its ownership. This can only mean loosening the grip of the Carlsberg Foundation and its 55 per cent stake in the brewery. The latter move might allow the brewer to raise capital more easily should it decide to play a stronger role in the global consolidation process. As a first step, the group will divide its brewing business into two units: Carlsberg Denmark and Carlsberg International.6 billion (US$217.8%).

Output increased

The state-owned Czech brewery Budejovicky (Budweiser) Budvar n.p. expects its fiscal 1999 net profits to reach 325 million Czech crowns (US$9.1 million), with revenues at Ckr2.4 billion. In 1998, the brewer posted a net profit of Ckr306 million on sales of Ckr2.13 billion. Output for 1999 is forecast at 1.25 million hl beer compared to 1.16 million hl in 1998. The full privatisation of Budweiser has been repeatedly postponed by the Czech governments due to trademark disputes with Anheuser-Busch.

Power Surge for Red Bull

Research by Zenith International indicates that sales of energy and sports drinks rocketed to £700m (US$1.0bn) last year, making the brand Red Bull Britain’s third biggest soft drinks brand by value. More than 20 brands were launched last year. £20m (US$28m) was spent on advertising energy and sports drinks, says Zenith.