18
regarding this intention. In connection
with the proposed closure, which will not
lead to dismissals, a social plan will be
drawn up. Alternative proposals for the
future of the brewery site are being con
sidered.
The production of the Amsterdam brewery
will be transferred to the breweries at
's-Hertogenbosch and Zoeterwoude. A
new bottling line will be installed for that
purpose in the latter brewery.
France
The volume of the French beer market
remained virtually the same during the
year under review, as a result of the
good summer weather. In view of this
market situation, it is gratifying that nearly
all the brands sold by Sogebra S.A.
achieved higher sales in 1986. Within
the product-range the Heineken brand
showed the strongest growth.
Despite the structurally difficult develop
ment of the beer market we foresee good
possibilities for our products in France.
The higher sales and the first effects of
the restructuring have led to a substantial
improvement in earnings in 1986. We
expect this trend to continue.
The restructuring and modernization pro
gramme started in the previous year was
vigorously pursued. In the meantime four
unprofitable production units (three brew
eries and one bottling plant) have been
closed according to plan. The consequen
ces for the personnel have been largely
smoothed by re-training and outplace
ment.
The other five breweries, i.e. those at
Drancy, Marseilles, Mons-en-Baroeul,
Mutzig and Schiltigheim, are being
brought up to the desired technical stan
dard.
Good progress was made during the
year under review with the modernization
programme. It is expected that this pro
gramme will be completed in 1988.
The legal structure of our French interests
has also been adapted in the meantime.
Sogebra S.A., in which we have a 51%
interest, is now the holding company of
a new company, Frangaise de Brasserie
S.A. This new operating company super
vises all the production activities and
also the marketing companies Heineken
Pelforth SNC and Union de Brasseries
SNC, as well as the distribution organiz
ation France Boissons S.A.
Spain
In a slightly larger total market the sales
of our subsidiary El Aguila S.A., in which
we now hold a majority interest, remained
approximately the same. The company
kept apart as regards price competition.
In order to improve the product-range,
a number of older beer brands were
taken off the market and two new brands
were introduced, Aguila Pilsener and
Adlerbrau. In addition, the distribution of
Heineken beer was undertaken as from
January 1. 1986. Imports of Heineken
beer were more than doubled during the
year under review. There was a marked
impulse from the considerable fall in
import levies for beer as a result of
Spain's entry into the European Commu
nity.
The alterations to the product-range and
the addition of the Heineken brand have
significantly strengthened El Aguila's
market position.
In accordance with expectations, earnings
were under pressure during the year
under review, partly as a result of the
rationalization measures in progress.
Three obsolete breweries were closed
during the year. The social consequences
of these closures have been offset as
well as possible. A start was also made
on the improvement and renewal of the
breweries in Madrid, Zaragoza, Cordoba
and Valencia. We take an optimistic view
of the effects of the restructuring and
modernization programme, in which fur
ther substantial amounts will be invested
in the years to come.
Italy
In 1986 beer sales in Italy again showed
an upward trend. The good weather du
ring the summer and autumn played a