During the year under review the combined Netherlands
brewers reached agreement on the replacement of the
30-centilitre bottle, which has been on the market since
1948, The change-over to the new 30-centilitre bottle is to
be effectuated between October 1986 and April 1987 At
the same time suitably adapted crates will be introduced
for our Heineken and Amstel brands, with great attention
being paid to an optimum presentation. These replace
ments involve investments of some N.fl. 150 million.
The heat and power co-generation plant at the brewery in
Zoeterwoude was officially taken into operation in mid-
1985. A new storage shed for export beer was also
completed at this establishment. In the brewery at
s-Hertogenbosch the capacity of the bright beer cellars
The Netherlands soft drinks market increased slightly in
1985. Within this market there was some improvement in
the position of the proprietary brands. In addition, the
sugar-free soft drinks showed an advance.
Nevertheless there was still no end to the alarming situation
in the soft drinks market as a whole Irresponsible price
competition continued to exist, leading to a further reduc
tion in margins.
The market share of our soft drinks company Vrumona BV
showed a further growth in 1985. Exports declined, albeit to
a lesser extent than those of the total Netherlands soft
drinks industry, so that our relative export position im
It was hardly possible, however, to pass on in the selling
prices the cost increases which were partly due to rising
raw material prices, as a result of which Vrumona's
earnings remained under pressure.
In order to achieve the necessary recovery in profitability in
the longer term, a restructuring plan has been worked out
In 1985 the Netherlands market for spirits was scarcely
able to recover from the sharp decline in 1984. which was
due to the sizeable increase in excise duty as from
February 1 in that year. Total sales rose to a very small
Despite this weak market situation our subsidiary Gedistil
leerd en Wijngroep Nederland BV was able to improve its
share in the market for Netherlands spirits and advo-
Owing to the continuing price competition, margins in the
whole sector remained under pressure.
Our product range was strengthened by the acquisition of
the import agency for the Netherlands of Osborne sherries
and Bacardi rum
Our sales of wines increased, despite the fact that the total
market - especially the white wines - was affected by the
poor summer and the problems concerning Austrian
Labour relations in the Netherlands establishments were
generally good. The average number of personnel was
6.142 in 1985. compared with 6.067 in 1984. A 38-hour
working week was introduced in 1985. As is the case
elsewhere in industry, it has been our experience that
shortening of working hours is not very effective as a means
of creating jobs.
For Vrumona proposals to change the organization were
submitted to the relevant works council and employees'
organization. The change in the organization will lead to a
reduction in the numbers of personnel, for which a social
plan has been drawn up.
An investigation held during the year under review into the
future position of the Amsterdam brewery led early in 1986
to the proposed decision to close this establishment in a
few years' time.
The beer market in France again declined in 1985. mainly
as a result of the further reduction in purchasing power and
the poor weather in the early season and during the
Sogebra S.A., the holding company of Heineken France
S.A., Union de Brasseries S.A. and Brasserie Pelforth S.A.,
managed to maintain its share in the reduced beer market.
The Heineken and Pelforth brands were a favourable
exception to the decline in sales. The Heineken brand, in
particular, again showed a considerable increase. Sogeb
ra. in which we have a 51 interest, did not make a positive
contribution to the trading profit. The substantial invest
ment programme for Heineken France was completed in
the past year. A new canning line was taken into use in the
Pelforth brewery at Mons-en-Baroeul.
Sogebra has laid down the principles for the long-term
policy. As was announced early in 1986, it is intended to
integrate the three operating companies while maintaining
their commercial identity. In conjunction with this, a plan for
modernization and restructuring has been drawn up which
comprises, on the one hand, the closure of four unprofi
table production units. These are the breweries at Aix-
Noulette. Chalons-sur-Marne and Yutz as well as the
bottling plant at Saint-Laurent du Var. The social conse
quences of this will be offset as far as possible. In this
context much attention will be paid to placement elsewhere
and re-training, as well as to assistance in starting up an
On the other hand, the plan comprises a substantial
modernization programme for the other breweries, i.e. the
establishments at Drancy, Marseilles. Mons-en-Baroeul,
Mutzig and Schiltigheim, involving an investment of some
N.fl. 250 million in the years to come.
It is expected that these restructuring and modernization
measures will have a favourable effect on earnings in the