Regional Review
Asia/Pacific
and the planned start of local production
of Heineken beer this year will significantly
strengthen Heineken's position in the fast-
growing Chinese market and will improve
both Heineken brand sales and profit mar
gins. Heineken's position in China, which it
sees primarily as a long-term growth
market, is still modest. Further expansion
in China will be pursued via local brew
eries, with their own brands and distribu
tion networks in combination with the
Heineken brand.
Heineken returned a weak performance
in Hong Kong, where the economy has
deteriorated over the past two years.
Both sales volume and result were lower,
reflecting the reduced purchasing power,
increased competition from low-priced
Chinese beers and the stronger euro.
The Hong Kong beer market was also
comparatively hard hit by the Sars
epidemic.
In Taiwan, sales increased significantly.
The premium segment, led by the
Heineken brand, grew strongly.
In Singapore, Asia Pacific Breweries
Singapore reported higher sales but a
lower result.
In Thailand, Thai Asia Pacific Brewery's
sales and result moved ahead strongly.
The Thai economy performed well and
the beer market grew 14%. Sales volume in
the mainstream segment stabilised after
a protracted decline over several years.
The premium segment, in which Heineken
is market leader by a considerable margin,
continued to grow. Production capacity
was expanded to meet the rising demand.
In Cambodia, both sales volume and
result were sharply higher.
In Malaysia, Guinness Anchor Berhad
achieved higher sales and an improved
result. The brewery was able to maintain
its market share, after having been under
pressure in recent years. Guinness Anchor
Berhad's good performance was due
largely to the Tiger, Heineken and Anchor
Ice brands.
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In Vietnam, Vietnam Brewery's sales and
result were significantly higher, with
Heineken and Tiger performing
particularly well. The beer market again
recorded vigorous growth, adding 8%.
Hatay Brewery, a new facility in the north
owned by Asia Pacific Breweries, started
production in October, with an initial
capacity of 400,000 hectolitres. To com
plement Heineken and Tiger, Hatay
Brewery also introduced Anchor draught
beer. The draught segment accounts for
70% of the total Vietnamese beer market.
In New Zealand, DB Group reported
slightly higher sales in a stable beer mark
et and posted an improved result thanks to
a better sales mix and cost control.
Heineken and Monteith, the local premium
beer, add permanent value to DB Group.
In Papua New Guinea, the economy
remained weak and the beer market
contracted a little. South Pacific Brewery's
sales were also down slightly, but cost
control yielded an improved result.
Sales in Indonesia were down. The
beer market shrank 8%, due to the eco
nomic situation and the drop in tourist
numbers in the wake of the terrorist
attacks on Bali and in Jakarta. Multi Bintang
Indonesia lost only a little of its market
share and the result improved, thanks to
cost control at the Surabaya brewery.
Further cost savings are still needed.
On New Caledonia, Grande Brasserie
de Nouvelle-Caledonie posted significantly
reduced sales and a lower result. As a
consequence of a new law introduced in
January 2003 which prohibits the sale of
refrigerated beer, the total beer market
has shrunk 20%.
Sales of Heineken beer in Australia
witnessed rapid growth. Heineken's
sponsorship of the Australian Open tennis
tournament and the Rugby World Cup
- both major and very popular events -
made a valuable contribution to brand
awareness and brand value. We are con
fident that the growth of the Heineken
brand will continue to benefit from this
momentum in 2004.
Sales in Japan were down slightly.
The Japanese beer market was under
pressure from the growing sales of low-
priced Happoshu, a low-malt beer which
attracts a lower rate of excise duty. The
Heineken brand strengthened its position
in prime on-trade locations. Heineken
launched Buckler, a non-alcoholic beer,
which has proved very successful.
In South Korea, Heineken opened
a sales office in Seoul, which started
operating in September 2003. Sales had
previously been outsourced. We are
convinced that, with our own sales and
marketing team, we shall be better
equipped to utilise the Heineken brand's
growth potential in South Korea.
The beer market in Kazakhstan
continued to grow and the Dinal LPP
brewery, in which Heineken's interest was
increased to 51% in 2002, reported slightly
higher sales. Dinal's sales and result have
been included in the consolidation since
1 January 2003. Amstel brand sales showed
strong growth, but sales of the local Tian
Shan brand were down slightly.
HEINEKEN N.V. ANNUAL REPORT 2003
46
