Review by region
on-premise sector, 'Koninklijke Horeca Nederland', responded enthusiastically to our liberal ap
proach and is striving for the introduction of a similar system for the entire brewery sector.
On l November 2000 a new licencing law came into force. Trade and industry each have their own
responsibility with regard to the supply of and communications about alcoholic beverages. The new
agreements with the government on alcoholic beverages draw a distinction between self-regulation
for advertising and codes of conduct for selling in liquor stores, supermarkets and for distribution in
the on-premise sector.
The soft drinks and mineral water market grew slightly in spite of the mediocre summer. The
advance of special soft drinks, e.g. ice tea, continued. Branded soft drinks also improved their share
of the total market. The competition in the off-premise intensified as the result of a price war in ear
ly 2000 and of increased promotional activities.
Our soft drinks company Vrumona managed to maintain the sales volume of Pepsi and 7-Up. Sisi
accounted for an increase in sales, thanks to its successful relaunch and the marketing of two inno
vative, non-carbonated soft drinks.
Spain Integration of Cruzcampo proceeding smoothly
The beer market in Spain grew by about 3% thanks to favourable economic developments and the
increase in tourism.
In January 2000 Heineken reached final agreement on the purchase of the Cruzcampo brewing
group following approval by the Spanish authorities. Immediately afterwards a start was made on
the integration of Cruzcampo with our existing Spanish brewery El Aguila. In the meantime the two
companies have merged legally to form Heineken Espaha S.A., of which Heineken holds 80%.
Heineken N.V. as of 1 February 2000 consolidated the Cruzcampo figures.
The sales and the distribution networks have meanwhile been integrated. In 2001 two breweries
and a number of regional brands will be sold to comply with the conditions imposed on the merger
by the Spanish government. In the same context, the licence agreements for the production of a
number of third-party beer brands were terminated in early 2000.
In 2001 work will be done to reduce the level of the new company's costs, with the aim of at least
achieving the level of the other players in the market. The continuing consolidation in the Spanish
beer market further increases the need for this.
Heineken Espaha's sales volume grew virtually in line with the market, in spite of the cancellation
of licence agreements. The company's average margins and profitability increased thanks to the
good performance of the Heineken Espaha's principal beer brands. The Heineken brand was able to
benefit from Cruzcampo's distribution network and grew substantially. This growth demonstrates a
major synergistic effect of the acquisition: improvement of the sales mix as a result of an increase
in the sales volume of Heineken beer. The two big local brands, Cruzcampo and Aguila-Amstel, also
increased their sales volume. Buckler and Kaliber retained their leading position in the non-alco
holic segment. The introduction of Buckler Limón expanded consumer choice in this segment.
Heineken Espaha's specialty beers attracted increasing consumer interest.
Heineken Espaha developed new advertising campaigns and introduced Heineken in the long-neck
bottle. The brand image of Aguila-Amstel further improved, thanks in part to Amstel's sponsorship
of the UEFA Champions League. Aguila-Amstel and Cruzcampo also sponsor a large number of re
gional and local events in Spain.
Exports of Heineken beer to the Canary Islands were higher.