Heineken Sees Further Growth for Spain Beer Market
The Spanish beer market is expected to grow 4 percent annually over the next three years driven by the nation's rising population and consumption, the largest brewer in Spain, Heineken, said on Thursday.
09/06/06 Heineken's general manager for Spain, Carlos de Jaureguizar, told a group investor conference in Seville that the Spanish beer market had grown at around 4 percent per year over the 2000-2005 period and he expected this growth to continue.
"I expect growth in the next three years such as we have seen in recent years," de Jaureguizar said.
Spain is western Europe's third largest beer market after Germany and Britain, and is the fastest growing in a region that has generally seen sluggish growth in recent years.
The Amsterdam-based brewer, which is the largest in western Europe, gained leadership of the Spanish market with the acquisition of Seville-based Cruzcampo in 1999, giving it a very strong presence in southern Spain.
It is the only international beer player in a still largely regional Spanish market where its two major rivals are local family-controlled brewers. Beer drinking at 80 litres per person a year is slightly higher than the western European average.
Heineken, which also brews Amstel beer, has a national market share of 30.6 percent just ahead of Madrid-based Mahou San Miguel at 30.4 percent and Barcelona's Damm with 19.2 percent.
Although Heineken leads the market, de Jaureguizar admitted Mahou has the best profitability, productivity and fixed-cost structure in the industry, and accounts for 34 percent of the national brewing profit pool against Heineken's 33 percent.
He expects the group's performance to improve as it steps up promotion of its premium Heineken brand -- which accounts for only 3.5 percent of the national beer market -- non-alcoholic and flavoured beers, and as its saves costs when its new Seville brewery opens in 2008 to replace its current city centre site.
Last year, France's Danone sold its 33.34 percent stake in Mahou back to Mahou's majority family shareholders, while Belgium-based InBev sold its 12 percent stake in Damm as it gave up hoping that Damm might be a possible stepping stone for expansion in the country.
Heineken has four big markets in western Europe - Spain, Italy, the Netherlands and France - which provide the bulk of the region's profits. It has the leading position in the first three and is number two in the French market.
