ing Heinro headaches. After every transaction Heinro tries
to change the Romanian money as quickly as possible into
Dutch guilders (the unit of currency in which Heineken
sends its invoices), but the banks are not always coopera
tive. Partly because the Romanian national currency does
not have a very high value (the banknote with highest
denomination is worth about ten guilders), even paying for
a dinner for two literally requires a wad of notes about ten
centimetres thick.
"The Romanian government is faced with a big financial
deficit and is trying to close the gaps in the budget by
levying extra taxes. Particularly businesses which import
goods like Heinro are finding this a heavy burden", explains
Heineken Area Export Manager Ed Weggemans. A few
HEALTHY FIGURES
Because of all those taxes it is logical that many people in
Romania simply cannot afford Heineken Beer. The price you
have to pay for a Heineken Beer is at least four times that
of a local beer. The great majority of the population are
poor and only an extremely small proportion have suffi
cient money to buy a luxury beer like Heineken. That hand
ful of people have in recent years certainly grown to appre
ciate the taste of Heineken Beer, as sales are showing
healthy annual growth rates. Volumes are still modest but if
the rate of growth booked in recent years can be continued,
Heinro will build up a healthy position in the Romanian
beer market in several years' time. Heineken Beer is already
regarded as the number 1 imported beer in the super pre-
16
examples: excise duty increased within a couple of years
from 50% to 70%. Import duties rocketed from 20% to
210%. The Romanian government has also decided to im
pose restrictions on the total quantity of beer that is allow
ed to be imported each year. If that quota is exceeded, then
import duties are raised from 210% to a penalty rate of as
high as 348%! And on top of all this there is of course the
18% VAT. If you think that the list of taxes is now complete,
you'd be wrong. In fact, the government has also ruled that
a maximum of three per cent of a company's profit may be
used for promotions and advertising. If a business wants to
spend more than that, then the automatic result is that it
again has to pay more tax.
mium segment, a segment that represents 1% of the total
beer market. To achieve real volume growth Heinro has to
depend on the emergence of the 'middle class' within
Romanian society. Dan Vlasceanu: "The middle class does
not exist yet and, in view of economic developments in the
country, it may still take some time before it emerges. It is
a question of being patient."
QUOTAS
Because of the poor economic situation the Romanian beer
market is declining slightly. Several years ago the 24 million
inhabitants still drank some ten million hectolitres of beer
per year. That has now fallen to nine million. Import beers
