Review by region
Last year the European beer market grew slightly in particularly thanks to the growing beer con
sumption in southern and eastern Europe. In northwestern Europe, the first half of 2000 went very
well, but in the second half the poor weather resulted in lower sales volume. The growth of premi
um beers continued unabated, with international brands like Heineken playing a leading role. The
interest in private labels and low-priced beer declined further, due in part to the healthy economy.
In the European beer market national and regional brands still play an important part; it is mainly
in the premium segment that international beers reign supreme. The beer industry in Europe - with
the exception of Germany and Russia - is consolidating fast. Our Group has meanwhile attained
a leading and profitable position in a considerable number of European markets. In the year under
review acquisitions in Spain and Slovakia further strengthened our position.
The European Commission introduced a new regulation on vertical restraints, including exclusive
supply contracts between breweries and the on-premise sector. The relevant operating companies
have adjusted their marketing approach in conformity with the new rules. Given the quality of our
products and service we do not expect the new regulation to have a significant impact on our prof
A number of our operating companies in the European Union were visited by the competition
authorities in connection with a cartel investigation. Heineken abides by the rules and regulations
and looks forward with confidence to the outcome of the investigation.
The Netherlands Higher market share thanks to Amstel and Murphy's Irish Red
The level of beer consumption in the Netherlands was slightly lower than in the previous year.
The share of lager beers, which is already large, increased further due to the continuing decline in
non-alcoholic beers. Sales of specialties declined as a result of the drop in amber and white beers.
Heineken Nederland increased its market share slightly and profitability remained virtually
stable. On 1 February 2000 the selling prices for off-premise consumption were increased for the
first time since 1992.
The Heineken brand reinforced its leadership position. Marketing campaigns, sponsorship activi
ties and the introduction of new packaging contributed to this. Among the events sponsored by
Heineken were Sail 2000 and Amsterdam's 'Uitmarkt', the opening of the cultural season; Heineken
was also highly visible in promotional activities involving the European football championship.
On account of the success of the Heineken long-neck bottle with consumers in the on-premise
sector, this packaging has now been introduced for the off-premise sector as well. The green
Heineken crate introduced in late 1999 has also had a positive impact on the brand's market share.
Amstel increased its market share and so managed to reinforce its position as second largest
beer brand in the Netherlands. Tying in with a series of successful music programmes on television,
a number of concerts were organized under the same 'Friends of Amstel live' name. The Brand
brand introduced new crates. Both Vos and Wieckse Witte increased their market share in the
amber and the white beer segments respectively. Murphy's Irish Red doubled its sales.
In June 2000 new European legislation on vertical constraints, such as purchase agreements
between breweries and the on-premise sector, came into force. Anticipating this, Heineken Neder
land switched in early April to a totally new system. Instead of a purchase commitment for five
or ten years, entrepreneurs in the on-premise sector are now free to opt for a different supplier af
ter repaying their loans. It remains extremely difficult, if not impossible, for the on-premise sector
to obtain bank financing on acceptable terms. Although Heineken does not aspire to the role of
a bank, the company remains willing to provide entrepreneurs in the on-premise sector with finan
cial assistance in order to support a modern, healthy branch of business. The organization for the
HEINEKEN NV. ANNUAL REPORT 2000