Regional Review
The Americas
Performance review by country
While volume in Costa Rica remained
stable, the result was lower, mainly due to
losses on soft-drink sales and low prices.
A reorganisation was implemented at the
end of 2003 to improve effectiveness
and reduce costs. With separate business
units for beer, soft drinks and distribution,
Cerveceria Costa Rica is seeking to
increase the effectiveness of its marketing
and sales function. Heineken brand sales
were lower.
Sales in Panama were slightly lower.
The focus in 2003 was on upgrading the
entire portfolio, including investment in
theSoberana and Panama brands. Intense
competition kept prices in Panama low.
Heineken brand imports were up 20%.
Caribbean
In a slightly smaller beer market, our sales
increased slightly to 1.4 million hectolitres,
of which Heineken beer accounted for
approximately 70%. Despite good perform
ance in most markets, the result in euros
was lower. This was largely due to the
weakness of the dollar, to which the local
currencies are tied, but other factors were
the growing competitive pressures and our
increased investment in marketing to
counter them.
Operations
Heineken has a total of five breweries in
the region, in the Bahamas, St. Lucia,
Surinam, Curasao and Martinique, two of
which brew Heineken beer as well as local
brands. The brewery in Curapao produces
Amstel. Heineken beer is available in all
33 markets which constitute this region,
in which distribution is organised by
various routes in conjunction with several
partners. The highest sales in the
Caribbean were on Puerto Rico and in the
Bahamas. The well developed tourist
sector, the growing population and the
relative political and economic stability
make the Caribbean an attractive region.
Market conditions
Tourist numbers in the region remained
low in the first half of 2003, which placed a
heavy strain on purchasing power in many
countries. Promising signs of recovery
became apparent in the second half, and
beer consumption was only slightly down
by the end of the year. While imports of
beers from Europe were lower in 2003,
mainly due to the strength of the euro,
movements in the exchange rates for
other currencies in the region also
resulted in heightened competition from
low-priced South American beers.
Results in the markets into which we
import were depressed by the weakness of
the dollar, to which the currencies of some
of our largest markets are linked. Although
our sales in local currency developed
satisfactorily, this did not translate into our
result in euros. The strong euro also
increased the cost of raw materials and
packaging, most of which our breweries
import from the euro zone.
Performance review by country
Heineken and our other brands were
supported by sponsorship of many local
music events, and on St. Maarten we
sponsored the St. Maarten Regatta.
Substantial investments were made in
2003 in training to improve the commer
cial skills both of the employees of our
companies and those of our affiliated
distributors.
The Commonwealth Brewery on the
Bahamas reported stable sales, but
the result was lower due to distribution
problems.
Antilliaanse Brouwerij on Curagao had
a difficult year, despite good performance
by the Heineken brand, with the local
market contracting and imports from
South America rising.
Surinaamse Brouwerij in Surinam
reported stable sales and an improved
result, in spite of the continued weakness
of the local currency and the resultant
inflation.
Brasserie Lorraine on Martinique
had a disappointing year, with lower sales
volume and a slightly lower result.
The beer market on Puerto Rico
contracted by almost 10%, reflecting the
higher import duties introduced in 2002,
but sales only declined slightly. The
Heineken brand performed quite well.
Sales of imported beers were higher on
Trinidad, Aruba, Cuba and the
Cayman Islands and in French
Guyana, but lower on Guadeloupe and
Haiti.
report of the executive board
39