Brau Union streamlines operations to resume growth

The leader of the domestic beer market Brau Union Romania, a branch of Dutch Heineken Group, has dropped three brands and decided to close the Grivita brewery, so as to resume growth after having lost 4% of its market last year.

“We stopped making some brands, like Arbema, Kaiser, and Ciuc Black, and have achieved growth for all brands for the start of the year. Golden Brau and Heineken are doing better than expected,” says Edwin Botterman, Brau Union Romania”s new chief executive, a Belgian that has been with Heineken for 16 years.

Brau Union posted 1.65 million hectolitre sales in the first half of 2005, slightly lower than in the same time last year, when it sold 1.72 million hectolitres. The company”s market share in the period was 27.9%, very close to the market share at the end of last year, 28%. The market share in June was of 28.7%, the first time one of the 2004 figures was exceeded.

The company”s portfolio includes brands in every category, such as Heineken and Goesser for the international premium segment, Silva for the national premium segment, Golden Brau and Ciuc for the middle segment and Bucegi and three other local brands for the popular segment, in addition to the alcohol-free Schlossgold.

Brau Union Romania has recently decided to close the Grivita factory from Bucharest in November, which is located in a very good commercial area, close to Carrefour Orhideea, Media Galaxy and the Regie student campus.

“We have completed the process of deciding to close this production facility and have reached an agreement with our employees at this site. We will relocate part of the equipment here to Constanta and Craiova and think about what to do with this factory afterwards. We haven”t received any offers to buy,” Botterman said.

He added he was not planning to shut down any more production facilities. Brau Union has five factories in Romania: Constanta, Craiova, Hateg, Miercurea-Ciuc and Bucharest. It had previously closed the brewery in Arad.

Out of 11 brands, Brau Union has no less than five present on PET bottled segment.

“PET was introduced in Romania as a cheep beer and price along with convenience are the main arguments for the fast-paced development of this sector. We will persist in this trend for as long as the consumer demands it. If they demand tetra packed beer, we will give them such a product. I am not afraid that selling some brands in PET bottles will ruin their image. Even Heineken is sold in PET bottles in some EU countries, though this will surely not happen on the Romanian market over the next two years,” Botterman says.

The beer market reached 600 million euros (14 million hectolitres) last year, slightly up from the previous year when it stopped at 550 million euros (12.8 million hectolitres).