Heineken eyes 10% of superpremium market

Dutch group Heineken, one of the world’s leading brewers, will exert a cautious strategy in its first year on the Romanian market, following takeover of Austrian Brau Union Group in 2003.

Heineken, the group’s main beer, will not be made in Romania at first but continue to be imported, thus proving competitors and analysts that expected a “descent” from Heineken wrong. Heineken and Brau Union have no plans to proceed with the streamlining of the Romanian operations that began with the closing of the Reghin breweries last year, either.

Heineken’s strategy for Central and Eastern Europe was presented in Vienna and Amsterdam last week by Karl Bueche, Braun Union’s general manager and soon to be member of Heineken’s Board of Directors and David Hazelwood, Heineken’s CFO.

“We will be importing Heineken in Romania until sales reach 30 – 40,000 hectolitres a year, the minimum that’s required to start producing a quality beer,” Karl Bueche told Ziarul Financiar. The superpremium beer segment accounts for about 3% of the total market in Romania, 360,000 hectolitres a year.

Heineken’s goal is to attain some 10% of this segment through imports in 2004. Apparently reasonable, the goal may prove hard to attain because the tax on beer imports is now at 110% and Carlsberg and Stella Artois, the leaders of the superpremium segment are made in Romania by United Romanian Breweries Bereprod (URBB) and Interbrew respectively.

Actually, it is precisely the customs duties that have prevented the Heineken beer from gaining a good position on the market, even though imported by a company authorised by Heineken for a number of years now. Heineken costs twice more than its competitors on the Romanian market and this practically cancels out its popularity here.

“Customs duties will be an obstacle, yet we will cut down a great deal on our margins to position Heineken on the Romanian market,” Bueche said.
laurentiu.ispir@zf.ro