51 Heineken N.V. Annual Report 2004 Report of the Executive Board Regional Review Central and Eastern Europe
In Hungary, the beer market overall showed a marginal decline during a year which was dominated
by strong competition and price wars in the mainstream and low-priced German imports segment.
As a result, total volumes suffered a strong decline. Brau Union Hungaria's market share decreased.
Our share of the premium segment remained stable, although the Heineken brand captured the lead
in the segment.
As of January 2004, the activities of Amstel Brewery Hungary and Brau Union Hungary have been
combined in Brau Union Hungaria. Combined total beer sales in 2004 amounted to 2 million hecto
litres. Currently, measures are being taken to improve the performance of the newly merged company
by reducing cost and by strengthening the portfolio. In 2004 the Komarom brewery closed.
Slovakia's beer market fell by more than 10% in 2004, reflecting the big increase in excise duties
from 2003, sharply higher energy prices and weak consumer purchasing power. Beer sales of our
operating company Heineken Slovensko declined to 1.8 million from 2.1 million hectoliters. However,
despite the unfavourable economic conditions, we were able to stabilise our market share at 42 and
consolidate our market leadership. Heineken Slovensko undertook a major restructuring and closed
a brewery.
The Bulgarian beer market showed a continued growth of approximately 7.5%. The Zagorka
brewery was able to increase beer sales to 1.5 million hectolitres from 1.3 million, and grow its market
share to over 30%, further consolidating its market leadership. These successes resulted in a signifi
cant increase in operating result.
Croatia, had a strong year. In its first full year under Heineken ownership, the Karlovacka Pivovara
brewery acquired in April 2003, increased sales by approximately 10% against a market, that declined
slightly, due in part to a very strict new anti-alcohol law. The strong performance reflects improve
ments in product quality, effective marketing and the enhancement in our sales and distribution.
The company is the country's second largest brewer and the country's biggest beer exporter.
The beer market in the Czech Republic fell by 2.3% during the year. However, beer sales of our
operating company Starobrno performed strongly, increasing by 7% to 826,000 hectolitres. This was
thanks mainly to one brand - Zlaty Bazant, which entered local production in the second half.
Starobrno is now the fourth largest brewer in the Czech Republic.
Our operation in Macedonia showed strong volume growth.
In Kazakhstan, Dinal has a market share of 8% divided between Amstel and Tian Shan.
In mid-2004, we announced the purchase of an additional stake in the Dinal Brewery, taking our stake
to 99.9%, creating an additional outlet for growth of the Heineken brand, imported from Russia.
