Netherlands
France
Regional Review
Europe
Level result in a slightly softer market
Demographic factors caused the Dutch beer market to
contract slightly. Beer prices rose in response to an 18%
increase in excise duty and higher costs. Heineken
Brouwerijen's sales declined from 6.5 to 6.3 million hi,
but our market share held firm. Despite the lower sales,
an improved sales mix helped to keep the result level.
The Heineken companies in the Netherlands have started
operating a number of shared support services, with the
aim of improving quality and reducing costs.
There is a clear shift in the beer market from the on-trade
to the take-home sales channel, helped by longer super
market opening hours and the growing availability of chill
ed beer in supermarkets. This is impacting on on-trade
sales of draught beer, and competition between breweries
for outlets in the on-trade sales channel is intensifying.
With gi.8% of the market, lager is the dominant beer. Sales
of competing ready-to-drink mixes declined in the second
half of 2002, which indicates that these drinks have passed
their peak.
Sales of Heineken beer held steady. The brand was sup
ported by the popular 'Biertje' campaign, new forms of
packaging and sponsorship activities. Events sponsored
by Heineken included the Fast Forward Dance Parade,
Dance Valley and a one-off concert by rock legends Queen
to mark the Queen Beatrix's Birthday. The new twelve-
pack of one-way green 25-cl bottles was rated by retailers
as the best newcomer to their shelves in 2002. Heineken
Brouwerijen also introduced a 28-bottle crate for the
on-trade sales channel. The David dispensing system,
which uses small 20-litre kegs, was launched in early 2002
and was enthusiastically received by the on-trade.
Around 500 systems are now in use in the Netherlands.
Sales of Amstel were down, reflecting its relatively
strong position in the depressed on-trade sales channel.
Amstel Bright, which is imported from Curagao, and
Desperados posted strong growth. Amstel's 'Three Friends'
concept continued to enjoy high consumer ratings.
The rapid growth in export sales has made it necessary
to expand our production facilities, mainly for the produc
tion of Heineken and Amstel Light, in Zoeterwoude and
Den Bosch. Work has started on this extension project,
which will take our total capacity in the Netherlands to
over 16 million hi per year. To reduce costs, production at
De Ridder brewery in Maastricht has been transferred to
Den Bosch.
The plan to close our De Ridder brewery was announced
at the end of 2002.
Vrumona, our soft-drinks company in the Netherlands,
operated in a declining market. Although its market
share contracted a little, Vrumona's result was higher,
thanks to improvements in the sales mix and cost-savings.
Dairy-based drinks are gaining in popularity at the expen
se of traditional soft drinks, such as cola, orange and
lemon/lime. Demand in general is shifting from carbon
ated to still drinks, and Vrumona responded to this trend
by launching several new products, including SiSi No
Bubbles Orange/Mango, Pepsi Twist and 7-Up Tropical
Splash. Vrumona has embarked on a new cost-reduction
programme.
Improved result in a softer market
The slow downward trend in the French beer market was
compounded in 2002 by the effect on consumption of the
poor weather. Competition intensified. Sogebra's sales
were down from 7.8 million hi to 7.5 million hi, in line with
the market, but the result improved, reflecting a better
sales mix which was largely due to the success of Despera
dos, higher selling prices and lower costs.
As the premium and speciality beer segments continued
to grow, the Heineken brand achieved higher sales and
increased its market share, despite the slower beer mar
ket in the on-trade sector in particular. The introduction on
a limited scale of Heineken in innovative aluminium bottles
was a great success and roll-out will continue in 2003.
The Heineken brand was supported by new print-media
and billboard advertising. As well as taking the lead as the
best-selling speciality beer in France, Desperados also
reported greatly increased exports. Sales of Amstel,
which is only sold in the on-trade sales channel, declined
in line with the rest of the mainstream beer segment.
"33" Export, which is also positioned in the mainstream
segment, suffered the effects of competitors' price-
cutting promotions and sales were lower. New product
launches included "33" Export Demi-Rondelle, a lemon-
flavoured beer, and Panach' Peche, a peach-flavoured
shandy. The launch of Kriska, a vodka-flavoured beer,
exceeded expectations. Sales of Affligem, an abbey beer
produced by our Belgian brewery, were higher in both the
on-trade and take-home sectors.
REPORT OF THE EXECUTIVE BOARD
21