Poland
Work started on the construction of a new brew-house at
the Chur brewery which will enter service in the second
half of 2002. The concentration of production facilities
in Chur will improve the cost structure. Heineken Switzer
land acquired several more beverage wholesalers in 2001.
Rising market share in a static market
The Polish beer market had to cope with sharp rises in
excise duties in 2001, as well as a downturn in consumer
expenditure as the economy weakened. For the first time
in seven years, there was no growth in the market. Grupa
Zywiec's beer sales increased from 7.5 to 7.6 million hi.
Its market share increased slightly and its financial per
formance was greatly improved.
Zywiec's financial position was strengthened in November
by a successful share issue, which gave Heineken the
opportunity to increase its stake from 51.6% to 61.8%.
Strong national mainstream brands increased their mar
ket share at the expense of many regional brands.
Grupa Zywiec's national brands- Warka lager andTatra in
the mainstream segment and Warka Strong in the strong
beers segment - performed particularly well. Warka lager
andTatra, former regional brands which were launched
nationally in 2001, achieved growth rates of 36% and 50%,
respectively. Sales of Zywiec in the national premium
segment remained stable. Sales of regional brands Specjal
and Lezajsk were higher. Some of the weaker regional
brands were withdrawn from the market. Grupa Zywiec
focuses primarily on brands which have strong
development potential at the national level. Sales of
Heineken beer increased and further growth of the brand
is expected to accrue from its full integration into the
Zywiec organisation in 2002.
In the second half of 2001 the government introduced
tight restrictions on the advertising of alcoholic drinks,
including a ban on TV, radio and cinema advertising
between 6 a.m. and 11 p.m. Higher excise duties and
lower consumer spending brought pressure to bear on
sales throughout the brewing sector. Competition inten
sified in 2001 and is expected to remain strong in the
years ahead. Substantial improvements in cost structure
REPORT OF THE EXECUTIVE BOARD
29