Regional Review
Central and Eastern Europe
hectolitres. The decision taken at the end
of 2002 to sell the brewery in Braniewo
has been implemented. The new owner
plans to produce non-alcoholic beverages
at the site and hopes to employ a large
proportion of the current workforce.
Brands
Sales of Eleineken, the leading internation
al premium beer in Poland, posted strong
growth, as did sales of Tatra, the Polish
mainstream brand, and the regional
Specjal brand, both of which benefited
from the rising demand for lower-priced
brands. Warka and Warka Strong per
formed well and sales of Zywiec, the Polish
premium beer, held steady. The oppor
tunities for effective marketing support
improved with the relaxation of the
alcohol laws, in particular the extension of
the hours during which beer commercials
can be broadcast on TV.
The BBAG brand portfolio
The principal brands in BBAG's Polish
portfolio are Królewskie, which is position
ed at the higher end of the mainstream
segment, and the Czech brand Starobrno.
Kaiser, the premium brand sold in several
countries, is targeted mainly at the on-
trade. Kujawiak and Bractwo are regional
brands with strong regional positions.
Russia
Growing sales and expanding
market share
The Russian beer market grew 6%, with
Russian mainstream beers and international
premium beers, in which Heineken Brewery
Russia has a strong presence, making most
of the running. Sales were up from 2.8
million hectolitres to 3.3 million hectolitres
and the market share increased. The volume
growth generated a higher result, despite
the rouble's weakness against the euro.
The Russian economy grew 5% and,
notwithstanding a relatively high inflation
rate, the growth in the beer market was
sustained, albeit at a slightly more modest
pace than the year before. With many
international brewers already active on
the Russian beer market, there is scope
for further consolidation, and Eleineken
intends to remain alert to opportunities
for it to play a part.
Consumers' willingness to try new beers
was undiminished, and brewers responded
with many new product launches. With a
combination of organic growth and new
brands, the fastest growth was recorded in
the international premium beer segment,
whose share of the total beer market
increased from 2.3% to 4.1%.
The share of beer in PET bottles in total
sales rose to over 30%, while that of beer
in cans increased slightly. The heavy
pressure on prices was maintained, one
contributory factor being a 25% increase
in excise duty on beer in early 2003.
Our prices rose by less than the average
inflation rate of 13%.
Brands
Locally produced Eleineken beer went on
sale in March 2003, resulting in consider
able savings in import duties. The event
was accompanied by substantial market
ing investments. Sales of Eleineken beer
may still be modest, but they increased
sixfold from 2002 to 2003. Sales of Boch-
karov, our Russian premium beer, were
lower, but Bochkarov Light's volume
increased. The Bochkarov brand is now the
official partner of the UEFA Champions
League in Russia. Sales of Ochota, which
is positioned in the mainstream segment,
grew strongly and a new PET bottling
line has been built to meet the increased
demand. Ochota was promoted with a
national TV campaign for the first time.
Sales of Löwenbrau, which is brewed
under licence, also recorded significant
growth.
The sales and distribution organisation
was expanded and existing relationships
with distributors were developed.
Considerable savings were made in
procurement, particularly of packaging.
MincJennapi
kenyerilnk
Hungary
Position greatly strengthened
in a competitive market
Amstel Brewery Hungary's sales were down
from 486,000 hectolitres to 465,000 hecto
litres. Total sales by Amstel Brewery Hungary
and (since 1 October 2003) Brau Union
Hungaria, which is part of BBAG, amounted
to 0.8 million hectolitres. The effect of the
lower sales on Amstel Brewery Hungary's
result was mitigated by cost savings.
The Elungarian beer market contracted,
largely as a consequence of the cold
and protracted winter, and margins were
under pressure from intense competition.
Sales of Eleineken beer increased slightly,
report of the executive board
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