17
are being held with the works councils
and trade unions on the ultimate form
ot the proposed co-operation and
restructuring and the social plan
pertaining thereto.
France
in sales in favour of the Heineken,
Buckler and Adlerbrau brands. El Aguila's
own distribution activities were largely
reorganized, which led to an improvement
in the cost structure.
El Aguila's earnings consequently
showed a further increase.
Beer sales in Europe per country
(in millions of hectolitres)
6.5 The Netherlands
5.2 France
4.8 Spain
3.7 Italy
2.6 Greece
0.5 Ireland
3.2 Other countries
The French beer market remained at
the same level as the previous year. The
restructuring in the brewing industry,
which has already been in progress for
several years, was continued.
As previously announced, our interest
in Sogebra S.A. was increased from 51%
to 100%. Frangaise de Brasserie S.A.,
Sogebra's operating company,
succeeded in maintaining its market
share. Earnings improved, but they are
not yet at the desired level.
The product range was extended by the
introduction of the low-alcohol beer
Buckler. Sales of this product developed
satisfactorily. The growth of the Heineken
brand continued.
During the year under review the
modernization programmes were
continued. The level of investments will
also remain high in the next few years.
Frangaise de Brasserie is aiming to
minimize the social consequences of the
proposed closures at Mutzig and Drancy.
Amongst other things the social plan
provides for retraining and reassignment,
both within and outside the enterprise,
of the personnel employed in these
breweries. We regret the fact that during
the year under review there was a degree
of social unrest in the breweries.
The distribution organization France
Boissons S.A. succeeded in improving
its market position, partly as a result of
adjustments in the marketing policy.
Spain
The brewery group El Aguila S.A., in
which we have a majority interest, was
able to maintain its share in a market
which showed a slight growth. The higher
sales were accompanied by an
improvement in margins through shifts
The first phase of the programme for
rationalization and modernization of
production, which commenced in 1985,
has in the meantime been completed.
In the next few years, too, much capital
expenditure will be incurred. The quality
improvement achieved in recent years
has benefited the image of the products.
In 1988 Buckler was also launched on
the Spanish market. Sales are developing
better than expected. In the course of
1989 a start will be made with the
importation of Guinness Stout.
An improvement in the market position,
together with the rationalization of
production and a change in distribution,
offer sufficient prospects to view the
future trend of earnings with confidence.
There was again a considerable rise in
imports of Heineken beer into the Canary
Islands.
Italy
The size of the Italian beer market
declined slightly in 1988. Our operating
company Birra Dreher S.p.A. was able
to maintain its market share and
earnings.
Sales of Heineken beer showed an
increase, but those of Amstel declined.
The licensing agreement with Birra Peroni
S.p.A. has been terminated and the
production of Amstel beer will be taken
over by Birra Dreher.
Within the framework of a share
exchange Birra Dreher's interest in
Societa Internationale Birraria S.p.A.
(S.I.B.) and Nuova Birra Messina S.p.A.
(N.B.M.) rose to 100%. In connection
with this our interest in Birra Dreher was
reduced to 85.2%. Both companies
developed satisfactorily during the year
under review; the integration of S.I.B.