Primus Awards
presented for second time
Sales and net profit at almost same level
Bad summer
affects beer
consumption
in Holland
Spain:
success for
Adlerbrau and
Heineken
Stable beer
market in
Italy
Good weather
boosted
Greek beer
market
Murphy's
Brewery:
sales up
again
Heineken beer
consumption
in US only
slightly down
The developments on the foreign exchange market, in
creasing international competition, adverse weather condi
tions in some markets of importance to Heineken and a
decline in exports were the difficult external factors which
confronted Heineken last year. The fact that Heineken's
sales and net profit in 1987 were nevertheless at virtually the
same level as in 1986 was a cause for satisfaction for the
Executive Board.
EUROPE
Netherlands
France
Spain
Italy
Greece
Ireland
UNITED STATES
PAGE 2 HEINEKEN INTERNATIONAL MAGAZINE NR. 14
BOARD OF DIRECTORS SATISFIED
Last year 43 million hectolitres of
beer were brewed by or under the
supervision of Heineken, an in
crease of 2.2% on 1986. Net profit
increased fractionally from 285.3
million to 286.7 million.
"Just as in 1986 we felt the impact
of the guilder's strong position on
the foreign exchange market. In the
first place it makes it more difficult
for us to export, but in addition the
sales and results of our foreign sub
sidiaries and associated companies
are translated into guilders at ever
lower rates", commented Mr.
A.H. Heineken during his explana
tion of the annual figures.
The poor summer in 1987 had a
strong influence on beer consump
tion in the Netherlands. The market
for bottled beer sold for consump
tion at home revealed a decline.
For draught beer, which is sold al
most exclusively in the bars, hotels
and restaurants trade, sales were at
their previous year's level. Sales of
Amstel 1870, which was launched
last year, are above expectation.
"This indicates the emergence of a
greater demand in the Netherlands
for special beers", said Mr. G. van
Schaik, vice-chairman of the Exe
cutive Board. The relaunch of Am
stel Gold and the market introduc
tion of Amstel Light show that Hei
neken is responding in good time to
the increasing demand for special
beers. Incidentally, in volume
terms the sales of special beers
represent only a few per cent of the
total Dutch market.
Despite the disappointing sum
mer the soft drinks market in the
Netherlands showed a small
growth. Our soft drinks business
Vrumona was able to profit clearly
from this. Thanks to the restruc
turing which is proceeding as plan
ned and to the improved export
results, Vrumona's profit went up.
The volume of the spirits market
again showed a disappointing devel
opment last year. This hit the sales
of the Dutch Spirits and Wine
Group. Market share was more or
less maintained. The decline in
sales was offset by an improvement
in margins. Last year saw the suc
cessful introduction of the new prod
uct Bokma Jonge Korenwijn. In
addition, the import licence was ac
quired for the Pommery brand of
champagne. The market for im
ported bottled wines has stabilised.
The French beer market decreas
ed in 1987. Frangaise de Brasserie
SAthe operating company of our
affiliate Sogebra S.A., suffered a
slight fall in market share following
a restructuring of its product range.
The main brands, including Heine
ken, were able to improve their
position.
Despite lower beer sales and
reorganisation costs the results
again revealed a substantial im
provement. This was partly due to
the positive effects of restructuring
and modernisation programmes
which also continued to make good
progress in 1987.
The increase in El Aguila's sales
paralleled the increase in the total
market. The decline in our market
share was therefore brought to a
halt. Within the renewed range the
Adlerbrau and Heineken brands in
particular developed very favour
ably.
Last year much attention was
again devoted to rationalisation
and modernisation of production in
the four breweries (Valencia, Ma
drid, Zaragoza and Cordoba). To
strengthen El Aguila's position fur
ther, many investments are still
planned for the years ahead. The
Executive Board views the future
development of the results with op
timism.
The Italian beer market remain
ed static in 1987. None the less, sales
of Birra Dreher increased, bringing
a further expansion of the market
share for beer. Sales of Heineken
beer increased in 1987. For Amstel
the sales were lower. The margins
of Birra Dreher came under pres
sure owing to increased competi
tion, but thanks to the higher sales
the result remained at the 1986
level.
In the breweries considerable in
vestments were again made. The
modernisation programme for the
units in Massafra and Pedavena
progressed well. As part of the
modernisation of the brewery at
Cagliari in Sardinia, a new keg line
was installed.
The total Greek beer market in
creased, mainly because of the
good weather conditions during the
summer and autumn. Athenian
Brewery, which brews both Heine
ken and Amstel beer, achieved
higher sales. Because of a price
increase and the higher volume of
sales, the result improved.
In the three breweries, located in
Athens, Thessaloniki and Patras,
major investments were made in
expansion, renovation and quality
control.
As a result of the economic situa
tion the total beer market in Ireland
declined. In spite of keen competi
tion Murphy's Brewery Ireland
again increased its sales and gained
market share. Sales of Heineken
went up thanks to a shift from the
traditional stout market towards la
ger beer. However, the results were
squeezed slightly, particularly be
cause of higher selling and person
nel costs.
In recent months much has been
written about exports to the United
States which are so important to
Heineken. Competition from Mex
ico is claimed to be harming Heine-
ken's export activities to the U.S.
Mr. Heineken had the following to
say on this subject: "Clearly, Hei
neken is feeling the negative conse
quences of the climb in the guilder
exchange rate against the Ameri
can dollar, but this situation is cer
tainly not alarming. The import
segment of the American beer mar
ket is still growing. Our share in this
segment may indeed be under pres
sure from Mexican competition at
the moment, but because of the
growing market the decrease in the
sales of Heineken beer in the Unit
ed States has been kept within lim
its Market figures in fact show that
consumption of our beer decreased
only slightly."
Consumer retailing is not the only
factor that plays a role. The ship
ments to North America also have
a direct effect on the turnover of
Heineken beer. These went down
by about 10% last year. This was
due to the substantially lower levels
in the American distributive trade
which was still using stocks it had
built up in October 1986, just be
fore a price increase. "In view of
our reputation in the United States
and the intensification of our mar
keting efforts, we have every confi
dence that the upward trend in our
sales in the United States can be re
sumed again", said Mr. Heineken.
Recently the Primus Awards
were presented for the second
time. These commendations,
destined for the breweries which
brew Primus beer with a consist
ently high standard, were pre
sented by Mr. H.F.M. Coe-
bergh, Executive Board mem
ber of Heineken N.V., after the
close of the Mission Scope meet
ing for Central Africa. The meet
ing was held in Kinshasa, Zaïre.
Besides the quality of the beer,
the criteria used to judge wheth
er a brewery qualifies for the
Primus Award also cover such
aspects as efficiency, mainte
nance and tidiness of the brew
ery, discipline, etc. Since operat
ing conditions differ in the
various units, each brewery is
allocated a handicap factor so as
to guarantee a fair comparison of
its achievements.
The golden Primus Award was
won this year by Brarudi, the
From left to right: Messrs. F. Levèbvre (Technical Manager Bralima), A.
Verwilghen (General Manager Brarudi), H.F.M. Coebergh (Heineken
N. V. Executive Board Member), M. Boreel (General Manager Bralirwa)
and J.W. den Hond (Director Regional Co-ordination Africa) during the
presentation of the Primus Awards.
brewery in Bujumbura (Burun
di). The Bralirwa brewery in Gi-
senyi (Rwanda) received silver,
whilst the bronze Primus Award
went to the Bralima brewery in
Boma (Zaïre).
