Canada South America Central America Regional Review The Americas Class action lawsuit In late 2003 and early 2004, class action lawsuits were filed against Heineken and a number of other producers and distributors of alcoholic beverages, claiming that their advertising and marketing of certain drinks, were directed at under-age consumers. We shall defend ourselves energetically against these accusations. Heineken USA's advertising and marketing activities are responsible and are addressed specifically to con sumers over the legal minimum age for consumption of alcohol of 21. Moreover, the Federal Trade Commission, which regulates advertising in the US, concluded after its most recent study in 2003 that there was no evidence whatever of the alcoholic beverage industry targeting under-age consumers with its advertising. Heineken brand sales markedly higher While the Canadian beer market overall remained static, partly due to the Sars epidemic, the imported beer segment posted substantial growth of close to g%. The Heineken brand outperformed the import segment by a small margin, with sales of canned beer growing fastest, thanks to various promotions. Beer consumption remained relatively stable, with the lower sales in Brazil, which accounts for over half of the South American market, being balanced by higher demand in Argentina and Chile. All of the growth in our sales, from 0.4 million hecto litres to 4.2 million hectolitres, reflects the consolidation of our interest in CCU as from 1 April 2003. Sales of Heineken beer in South America held steady at 0.5 million hecto litres. Operations Through its interest in CCU, Heineken has secured a very strong position in Chile, and a good position in Argentina. As well as beer, CCU also produces and markets a wide range of wines and soft drinks. Its modern breweries in Chile and Argentina have a combined annual capacity of 6 million hectolitres of beer and sell 4.3 million hectolitres of soft drinks and 1 million hectolitres of Chilean wine, of which about half is exported. CCU markets a number of lager brands and speciality beers in Chile and Argentina. CCU started brewing Heineken beer in April 2003. Strategically, Heineken and CCU complement one another perfectly, and their alliance has enhanced the Heineken brand's growth potential in both Argentina and Chile. In Argentina in particular, the addition of the Heineken brand to CCU's portfolio is creating good opportunities for expanding the distribution, which will benefit the growth of the other brands as well as Heineken. In Brazil, Heineken has a 20% stake in Cervejarias Kaiser Brasil, the third largest brewer in Brazil with a market share of 12%. The other South American markets are supplied with imported Heineken beer. Sales in these countries, of which Colombia is the largest import market, are still modest. Performance review by country With the economy picking up, the beer market in Argentina improved greatly. Heineken's sales rose to i.g million hecto litres, reflecting the consolidation of CCU's Argentinean activities. Heineken beer volume held steady despite the transfer of the distribution licence for Heineken beer from former partner Quilmes to CCU. Ensuring sales continuity involved a major operation in which CCU and Heineken worked closely together, not only to get the brewing and distribution facilities ready on time, but also to maintain relationships with our customers. As the economy revived, the beer market in Chile grew strongly. Our sales rose to 4.0 million hectolitres, reflecting the consolidation of CCU's Chilean activities. Heineken beer volume remained stable. Heineken brand sales in Brazil were down, despite growth of the premium segment. Sales of imported beer in Colombia and Bolivia were depressed by the strong euro, compounded in Colombia by increases in local tax and import duties. Central American beer consumption rose a little and our sales in the region increased from 0.8 million hectolitres to 1.5 million hectolitres, due to the consolidation of the interest in Cervecerias Baru-Panama and Cerveceria Costa Rica with effect from 1 October 2002. Sales of Heineken beer were up slightly. Operations Heineken operates in Central America in alliance with FIFCO. In Costa Rica, Heineken has had a 25% interest in Cerve ceria Costa Rica, the country's only brew er, since 2002. The majority shareholder is FIFCO. In Panama, Heineken has had a majority interest in Cervecerias Barü- Panama, one of the country's two brewers, since 2002. FIFCO is the minority share holder. Via its alliance with FIFCO, Heineken has an indirect 8% interest in Nicaragua in COCECA, the country's only brewer. HEINEKEN N.V. ANNUAL REPORT 2003 38

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2003 | | pagina 44