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Important progress was made with regard
to improvement of quality control. New
information systems were also introduced,
based on an automated accounting
system. Training courses are being
followed by the personnel within the
framework of the continuing automation.
Much investment is still to be made in
the years ahead in order to strengthen
El Aguila's position further.
We take a positive view with regard to
the future growth of earnings.
Italy
In 1987 the beer market in Italy remained
stable. The sales of our operating
company Birra Dreher S.p.A. nevertheless
again increased. Consequently the share
in the beer market was further enlarged.
Sales of Heineken beer were up on the
previous year. On the other hand, sales
of Amstel beer were lower.
The margins of Birra Dreher were under
pressure as a result of the increased
competition, but due to the rise in sales
earnings remained at the previous year's
level.
Dreher's interest in Sarde Produzioni
Agricole Industriali S.p.A., of Cagliari,
Sardinia, was increased from 70% to
100%. After that, at the beginning of
1988, Sarde Produzioni Agricole
Industriali S.p.A. was fully integrated in
Birra Dreher. The sales by this affiliate
developed satisfactorily.
During the year under review Dreher
concluded an agreement with Societa
Internationale Birraria S.p.A. and Nuova
Birra Messina S.p.A. (S.I.B. and N.B.M.)
to arrive at closer co-operation. Within
the framework of this agreement an
approximately 20% interest in S.I.B. and
N.B.M. was acquired, whilst the latter
companies obtained a 7% interest in
Dreher.
The new affiliates have breweries at
Aosta (northern Italy) and Messina (Sicily)
with a combined production capacity of
1,700,000 hectolitres.
Substantial investment again took place
in the breweries. The modernization of
the brewery at Cagliari in Sardinia was
completed with the installation of a new
keg-racking line. In the meantime, the
closure in 1991 of the brewery at
Macomer in Sardinia has been announ
ced. Production will be transferred to the
brewery at Cagliari.
The modernization programme for the
establishments at Massafra and
Pedavena proceeded satisfactorily.
Sales by the soft drinks business in
Sardinia showed a growth.
Greece
The total Greek beer market showed a
growth which was mainly due to the good
weather during the summer and autumn.
Our subsidiary Athenian Brewery S.A.,
where both Heineken and Amstel beer
are brewed, achieved higher sales.
The pressure on margins was reduced,
partly as a result of an authorized price
increase. In conjunction with higher sales
this led to an improvement in earnings.
In the three breweries at Athens,
Thessalonika and Patras considerable
investments were made with regard
to expansion, renovation and quality
control.
Ireland
As a result of the economic situation the
total beer market in Ireland declined.
Despite the strong competition our Irish
operating company Murphy Brewery
Ireland Ltd. again managed to increase
its sales and market share. Sales of
Heineken beer rose as a result of a shift
from the traditional stout market to lager.
Earnings were under some pressure,
however, particularly owing to higher
marketing and personnel costs.
The modernization programme was
completed.
Other countries
In Britain the sales of Heineken beer
marketed by our licensing partner
Whitbread Co. PLC remained at the
same level as the previous year. The
