Report of the Board of Managing Directors
At the forthcoming Annual General Meeting of Share
holders Jonkheer O. A. E. E. L. Wittert van Hoogland will
be retiring as a member and Chairman of the Supervis
For over 33 years Jonkheer Wittert has devoted his
energies to the enterprise in various posts, including
that of Chairman of the Board of Managing Directors.
During this period he has made a substantial contri
bution to the prosperous development of the Group.
We should like to express our deep gratitude here for
the many valuable services rendered to the enterprise
by Jonkheer Wittert.
Course of affairs
The course of the financial year 1980 was different from
what we had foreseen. Whereas we had hitherto assu
med that owing to the international nature of our ac
tivities negative and positive movements would to a
considerable extent have an offsetting effect, unfavour
able trends were unfortunately clearly dominant during
the year under review.
Admittedly the consolidated turnover rose by 12.4%
from N.fl. 2,873 million in 1979 to N.fl. 3,230 million in
the year under review, but the net profit fell by 33.9%
from N.fl. 125.7 million to N.fl. 83.1 million.
Sales of beer brewed under the supervision of Heine-
ken increased by 5.4% to 25.9 million hectolitres (1979:
24.6 million hectolitres).
These figures reflect trends of a structural, cyclical and
also incidental nature.
In a number of markets important to us the growth of
beer consumption - as we have pointed out on several
occasions - is showing a certain sluggishness. This situ
ation, together with an increasing interest shown by
other breweries in the international beer market, is caus
ing an intensification of competition. Consequently, and
also as a result of government measures, it was often
not possible to adjust prices to inflation and cost in
In addition to the tightening of margins, a significant
element of the decline in profit is attributable to the
course of affairs in the United States. Although the sales
of our beer at consumer level were virtually maintained,
our shipments to that country were below the 1979 fi
gure, mainly because the trade proceeded to a reduc
tion of stocks due, amongst other things, to the high
rates of interest.
The spectacular growth of the sales of Heineken beer
over a period of many years has naturally attracted
competitors in the import segment. It is gratifying, ho
wever, that the image of the Heineken brand in the eyes
of the American consumer has evidently not been af
fected. We trust that we shall benefit from this when the
economic climate has recovered.
During the spring and the summer we were confronted
by bad weather in the European countries where we
Nevertheless, our beer brands developed reasonably in
the Netherlands market, which is a source of satisfac
tion in the light of the difficult economic situation. In the
Netherlands, the weather has only a limited effect on
beer consumption. In the South European countries
consumption is much more subject to seasonal influen
Overall, the detrimental effect of weather conditions on
the financial results was nevertheless relatively large,
because the profit contributions of the marginal sales
are the greatest.
Despite great efforts our earnings in France are still far
removed from a positive result.
The substantial depth investments in recent years will
enable Heineken beer to be produced locally in 1981.
By taking drastic measures we are endeavouring to
achieve profitable operations in the long run.
The consolidated figures were only slightly affected,
comparatively, by changes in the Group shareholding
In Italy the entire share capital of the brewery Moretti
Sud S.p.A. at Popoli was acquired; in the meantime the
name has been changed to A.Ti. Dreher S.p.A.
Through the purchase of several blocks of shares we
increased the holding in Antilliaanse Brouwerij NV at
Willemstad, Curagao, from 31.4% to 46.4%.
We also acquired a minority interest in Desnoes Ged-
des Ltd., our licence partner in Jamaica.
In Brasserie Lorraine S.A., In Martinique, we have in
creased the interest from 40% to 58.1%.
Our interest in Grande Brasserie de Nouvelle-Calédo-
nie S.A. at Noumea was also increased, in this case
from 28% to 76.5%.
Via a public bid practically all the shares outstanding
with third parties (over 28%) of Hotel de I'Europe NV in
Amsterdam, the Netherlands, were acquired. This hotel
will be completely modernized in phases.
Heineken and society
For enterprises the changes in society imply that more
and more contacts are arising with institutions and
groupings which were previously not immediately in
volved in the business activities. Industry can only func
tion optimally in this dialogue if - like its partners in the
dialogue - it has the right to respond to and thus to join