Review by region
Europe [n pur0pei sales proceeds rose by 17% to
EUR 5.1 billion as a result of higher sales, a better
sales mix, higher selling prices and the first time
consolidation of Brewpole in Poland, Pivara Skopje
in Macedonia and a number of beverage whole
salers. Profitability increased considerably.
The beer market in Europe remained stable.
Changing patterns of consumption and the ageing
population in many countries led to a decline in
on-premise consumption. The preference for
premium and specialties increased.
Heineken expanded its position as the leading
brewing group in Europe. The Group reached
agreement on the purchase of the Cruzcampo
breweries in Spain. In Slovakia, we acquired
two small breweries. In a number of countries
we further increased our market share.
Our international brands, Heineken and Amstel,
once again increased their sales, as did our
specialty beers. This resulted in an improvement
in our margins.
With effect from June 1, 2000, the European
Union is placing restrictions on exclusive supply
agreements between breweries, distributors and
the on-premise sector. The new regulations restrict
the length of exclusive agreements to a maximum
of five years if breweries have a market share lower
than 30% in the on-premise sector in a country.
If they have a higher than 30 market share,
further restrictions still to be set will apply by
country. A transitional period ending on
December 31, 2001 applies. Heineken has a market
share in excess of 30% combined with exclusive
long-term supply agreements in the Netherlands
and France. Restrictions could involve slightly
higher costs, spread over a number of years.
However, we do not expect any substantial changes
in market conditions or in our profitability.
The Netherlands
The volume of the Dutch beer market was slightly
higher than the 1998 level. Lager maintained its
share at about 90%. The market share of the
branded beers rose at the expense of the private
labels. Heineken Nederland managed to improve
its market share. Thanks to higher sales and a
better sales mix, profitability showed a modest
increase.
The Heineken brand achieved a moderate
increase in its market share. The vitality of the
brand was raised by the introduction of the green
crate, various campaigns and the marketing of
a 3-litre Millennium Magnum bottle at the end of
the year. Heineken Nightlive, a new music concept,
experienced a successful first edition.
The Heineken brand was elected the Dutch 'Brand
of the Century'. Amstel succeeded in becoming
the second beer brand in the Netherlands.
The position of Brand beer in Heineken Nederland's
brand portfolio was optimized. Vos and Wieckse
Witte strengthened their positions in the virtually
stable specialty beer segment. Sales of Murphy's
Irish Red, which was introduced in July, developed
beyond expectation.
The integration of distribution service and sales
activities geared to the on-premise sector was
completed in a number of regional service centres.
The replacement of old fermentation and lager
tanks in the Den Bosch brewery is making steady
progress. Continuing automation will result in
achievement of the highest level of process control
and higher energy savings. At the Zoeterwoude
brewery, automation of the entire production
process was completed. Other projects for
conserving energy and water made good progress.
Also, odour emissions from the brewery have been
minimized thanks to condensation of the wort
vapours released during brewing. The heat
generated in the process is used elsewhere in
the brewery.
The favourable weather conditions had a
positive influence on soft drinks and mineral water
consumption. However, this did not have a
fundamental impact on market conditions, where
fierce competition and rising marketing costs
resulted in low profitability for the entire industry.
Vrumona developed innovative products with a
higher margin and also successfully intensified
In Europe sales proceeds increased by 17.8 to EUR 5.1 billi
and new consolidations. Profitabil
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