30
REGIONAL REVIEW - CENTRAL AND EASTERN EUROPE
STRATEGIC EXPANSION
DRIVING GROWTH
REPORT OF THE EXECUTIVE BOARD
HEINEKEN N.V. ANNUAL REPORT 2008
AUSTRIA
Consolidated beer volume 4.6 million hectolitres
Market share 50.0 per cent
Market position 1
The market grew thanks to the substantial volume increase
of beer in cans during the UEFA European Football
Championship.
Volume of Brau Union Austria grew 2 per cent, resulting in
share gains in the premium and mainstream segments. The
Zipfer and Puntigamer brands reported strong increases, and
volume of the Fleineken brand grew 7.3 per cent. Revenue
grew in line with volumes. EBIT (beia) was stable, impacted by
a shift from on-trade towards off-trade and towards lower
margin pack types.
GREECE
Consolidated beer volume 3.5 million hectolitres
Market share 74.4 per cent
Market position 1
In the second half of 2008, the beer market suffered from
the economic slow-down and social disturbances in Greece,
which disrupted distribution and reduced both tourism and
consumer confidence, causing lower sales in the large
on-trade channel. Beer volume of Athenian Brewery was
broadly flat, as good increases posted by the Fleineken brand
(+4.1 per cent) and the strong growth of Fischer lager, offset
lower volume of mainstream brand Amstel.
Revenue and EBIT (beia) increased mid-single digit, thanks to
higher pricing, a better sales mix and the cost savings of the
F2F programme.
After 10 years of strategic
expansion, Heineken's European
footprint has significantly
expanded to encompass the
fast-developing markets of
Central and Eastern Europe.
The Company is now twice as big
as its nearest competitor across
Europe. In 2008, this expansion
eastwards accelerated with the
acquisition of leading positions
and brands across the region.
Early in the year, Heineken
announced the establishment
of a joint venture with Efes
Breweries international (EBI) to
invest in the Uzbek beer market.
The partnership approach also
combines operations in the
Kazakh (5 million hectolitres) and
Serbian (5.5 million hectolitres)
beer markets. The move now
gives the combined entity
strong positions within the top
3 in each of these markets and
a strong platform on which to
grow our business.
In April, Heineken strengthened
its number one position in
Romania (20 million hectolitres),
with the acquisition of Bere
Mures, instantly boosting its
market share to 30 per cent and
growing its total volume to
6 million hectolitres. Established
in 1992 in the Transylvania region,
the Bere Mures beer portfolio
includes Neumarkt, one of the
country's leading beers, and
the smaller Dracula and Sovata
brands.
In July, in the key reference beer
market of the Czech Republic
(16.1 million hectolitres),
Heineken acquired Drinks Union,
which owns four breweries
in North and East Bohemia.
The breweries complement
Heineken's existing positions in
the Moravian and Prague regions.
The Drinks Union portfolio
consists of the national brand
Zlatopramen and the regional
Breznak, Louny and Dacicky
brands. The deal significantly
strengthens Heineken's number
three position in the market and
gives it a total domestic volume
of almost 2 million hectolitres.
In July, Heineken acquired the
Rechitsa brewery in Belarus
(4.7 million hectolitres), which
together with its December 2007
purchase of local brewer Syabar
Brewing Company, significantly
strengthens its number two
position in the market.
Despite the clear challenges
and setbacks along the way, the
strategic decision to 'go east' has
proved a success. Today, Central
and Eastern Europe is Heineken's
third most profitable region.