Europe
Regional Review
60
55
50
45
40
35
30
25
20
15
10
V V T 1 5
Sales in Europe increased from 55.4 million hi to 57.9
million hi (+4.6%). Most of the sales growth reflects
the first-time consolidation of the newly acquired
breweries in Russia and Germany. The fastest organic
growth in sales volume was recorded by the breweries
in Poland, Slovakia and Bulgaria. Sales in a number of
Southern and Western European markets were under
pressure.
In most countries in Europe there is a growing preference
for premium beers at the expense of mainstream beers.
This trend, which has been in evidence for some years,
is beneficial to our profitability. Rising sales of speciality
beers in many countries also helped to improve the sales
mix.
Beer consumption was depressed by the wet weather
in Southern and Western Europe and reduced tourist
numbers in Greece and Spain, combined with the effect
on customer volume of the above-average price rises in
the on-trade sector, in which the introduction of the euro
and increased costs were contributory factors.
Heineken welcomes the accession often new countries
to the European Union, a development which Heineken
has anticipated fully with the investment strategy it has
pursued in recent years. Purchasing power in these
countries is set to increase significantly in the long term,
which will foster greater brand awareness and promote
growth in the premium segment.
The wave of mergers and acquisitions continued in the
brewing industry in Europe, including Germany and Russia.
Bravo International, our Russian brewery, and BrauHolding
International in Germany were included in Heineken's con
solidated accounts for the first time. Heineken strength
ened its position in Germany with the acquisition of a
minority stake in Karlsberg International Brand, the mar
ket leader in the important Saarland and Rheinland-Pfalz
regions. In early 2003, Heineken reached an agreement in
principal on the acquisition of a 68.8% interest in Karlo-
vacka Pivovara, the second largest brewery in Croatia with
a market share of 19%.
Group volume
Europe
in millions of hectolitres
REPORT OF THE EXECUTIVE BOARD
19
