Heineken and the magical year 1992
Tour de force
Kumasi Brewery Ghana
can invest again
Just a few more years and the compilers of atlases will be able
to pick up an eraser and rub out the (economic) borders between
the EC member states. Free trade will be the watchword from
1992 onwards. Internationally oriented businesses are already
arming themselves for the battle that will then undoubtedly
break out. In fact, trade without frontiers means greater compe
tition. Businesses which stand firmly in their shoes after 1992
will do well, that's the general feeling. How does Heineken
stand? What have we done and what still needs to be done? We
interviewed Mr. J.C. Banz, deputy director at Heineken and a
man who keeps a close watch on the developments in the run-up
to European unification, and asked him about that magical year
and its consequences for our company.
Symbolic
Not foreseen
How the economy of an
African nation can govern
the ups and downs of a
brewery can be seen in
Ghana. Kumasi Brewery
(Heineken's 14.5% partici
pation) had been struggling
for years with technical
problems, as no hard cur
rency was available because
of the poor state of the
country's economy. Neces
sary maintenance work and
investments had to be post
poned. The IMF (Interna
tional Monetary Fund) and
the Ghanaian Government
got together to reorganise
the economy. Those meas
ures are starting to bring
results: industry can now
invest again.
HEINEKEN INTERNATIONAL MAGAZINE NO. 18
PAGE 7
In concrete terms 1992' means a
simplification of trading between
the countries in the European Eco
nomic Community. National bor
ders will become more blurred and
less of a barrier to economic activi
ties. The Dutch tulip bulb grower
will find it easier to sell his products
in other EC countries. The same
also applies to the orange grower in
and how, what will we need, where
do the opportunities lie, what risks
are involved, etc. It's a highly com
plex area in which, for example,
logistic calculations are tremen
dously important. We intend to
make allowance for these develop
ments as quickly as possible in all
decisions", says Mr. Banz.
Mr. Banz, deputy director of Heineken N.V.: closely watching European
developments in the run-up to 1992.
Spain and the German sausage
manufacturer. No more of those
stacks of customs declarations to be
filled in at the borders. A simplifica
tion of trading regulations between
the EC countries should lead to one
single internal market on which all
businesses can operate. The ultimate
goal: achieving economies of scale
so that Europe can continue to com
pete with the United States and
Japan, the other big trading powers
in the world.
A single internal markt also has
consequences for a company like
Heineken which is traditionally
strong in Europe. 1992' must there
fore serve as a frame of reference for
all aspects of doing business. How
do we derive optimum benefit from
the new situation in the 'nineties on
the basis of our current brand port
folio, our existing markets, produc
tion locations and distribution facili
ties? The question that always has to
be asked is: what sort of conse
quences will a policy decision have
once the internal market has become
reality? What existing situation will
have to be realigned?
"At this moment we're still busy
answering the essential questions:
what do we want to do after 1992
The gradually vanishing borders
between the EC member states will
probably also have repercussions for
Athenian Brewery in Greece and
El Aguila in Spain gave a foretaste
last summer of the advantages that
1992 can bring for a company like
Heineken.
In the summer months Athenian
Brewery was quite unexpectedly
confronted with a shortage of
(canned) Amstel beer. They called in
El Aguila's help to bridge over the
temporary shortfall. In Valencia all
the preparations were then made to
accomplish a tour de force, as the
supplies were needed urgently.
Although unfamiliar with the
Amstel brewing process, the brewers
in Valencia produced an excellent
quality of beer. The cans (printed
with Greek labels) had quickly been
rushed to the brewery and, after fill
ing, were immediately shipped off
to Athens. Fifty-five container loads
of Amstel beer helped Athenian
Brewery to keep its customers satis
fied. Across borders, too, a friend in
need is a friend indeed!
The EC countries are coloured yellow on this map. The countries in which Heineken breweries are located are
marked by hatched lines. At a glance it is clear that Heineken will have a good spread of production units in Europe
post-1992.
the functioning of our business or
ganisation within Europe. One
essential point will be to bring about
the best possible balance between
centralisation and decentralisation,
with continued emphasis on decen
tralisation where at all possible. "In
fact, what we call '1992' started
quite a long time ago. We have to
see 1992 more as a symbolic date.
You could say that the trend towards
one single internal market for the
EC countries started as long ago as
1958 with the establishment of the
European Economic Community",
says Mr. Banz.
Mr. Banz on the subject of our
first steps on the European scene:
"Heineken started its European
expansion by participating in brew
eries in France in 1972 and in Italy in
1974. Because we were early to rec
ognise the importance of a strong
Europe. At that moment we were
not doing that with a single internal
market in mind. The EC was still a
long way from that."
"At the time of our expansion in
Europe allowance was made for the
fact that national borders would pro
visionally continue to exist. The rel
atively fast arrival of the internal
market could not have been fore
seen, hs it was assumed for quite a
long time in Brussels that it would
be absolutely essential for the twelve
EC members to agree on one statu
tory regulation to govern free trade
in foodstuffs. In the meantime it has
become clear that each country can
maintain its own food laws, without
this having consequences for free
trade. Generally speaking, these reg
ulations will no longer permit us to
prevent imported products from
entering, but at the same time we
will be given wider possibilities of
our own", says Mr. Banz.
In the marketing area, too, the
establishment of the internal market
will require adaptations. Heineken
opted long ago for a marketing strat
egy based on focusing attention on
each market separately. Each coun
try has its own (beer) market and
marketing efforts have to be geared
to that. The completion of the inter
nal market may cut throiigh some
parts of Heineken's marketing pol
icy, but abolition of economic bor
ders does not mean that cultural dif
ferences between the EC member
states will disappear. The consumer
will not automatically drink a beer
because 'Brussels' allows it. The
beer will have to be advertised and it
will have to be obtainable. And that
is clearly a role for the trade.
1992. The many publications over
the past year make that magical year
seem so close. But in the space of
four years (completion of the inter
nal market is planned for 1 st January
1993) a lot can be achieved to make
sure that 1992' goes smoothly and
that the change brings a world of
new opportunities for our company.
The high-profile presence of Heine
ken products in the vast majority of
European countries will in any event
offer a good basis for taking
optimum advantage of the oppor
tunities that come our way.
Kumasi Brewery, in coopera
tion with Heineken Technisch
Beheer, has replaced its bottle-
washing machine and the pas
teuriser on the filling line. At pre
sent a new filler unit is being
installed. There are even more
replacements and modernisa
tions on Kumasi Brewery's shop
ping list for the future.
