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Poland: Austrian brewer Brau Union, part of Holland's Heineken group, decided on June 15 to close its Polish unit, Brau Union Polska, and transfer its breweries to Heineken's Zywiec, said Nico Nusmeier, the Brau Union board member responsible for the Austrian company's Polish operations, according to Interfax Information Services.

The decision to liquidate the loss-making Brau Union Polska comes after its merger with top Polish brewer Zywiec, a unit of Holland's Heineken, a direct consequence of the Dutch brewing giant's takeover of Brau Union in May 2003. Brau Union Polska, operating in Poland since 2000, has never turned a profit. Its losses currently stand at PLN 100 mln.

"Any parent would have a problem carrying such a subsidiary," Nusmeier, also the president of Heineken's Zywiec, told journalists Tuesday.

The move will entail the closure of Brau Union Polska's brewery in Warsaw, which produces the Krolewskie brand of beer. Its production will be transferred to Grupa Zywiec's Warka brewery outside of Warsaw. Brau Union Polska's other brewery, Browar Kujawiak, in western Poland's Bydgoszcz, will be sold within a month to Grupa Zywiec. Company officials declined to specify figures concerning the production transfer and sale.

"The Warsaw brewery would have been closed regardless of the situation with Brau Union Polska," he added. "The brewery's location in Warsaw brings with it high operational costs, limited production capacity and no possibility of expansion, because it is in a residential area."

Grupa Zywiec and Brau Union Polska together boasted a 37 percent share of Poland's beer market after the first three months of 2004, little changed from their market share of 37.3 percent at the end of 2003. After the closure of Brau Union Polska, "no signigicant loss of market share is envisaged," said Nusmeier.

"The Kujawiak and Krolewske brands will continue to sell on the Polish market but with a bit more marketing behind them," he added.

The Zywiec group closed 2003 as Poland's biggest brewer with a direct market share of 32.6 percent and its newly bought unit, Brau Union, holding 4.7 percent. SABMiller's local unit, Kompania Piwowarska, was second with a 32.8 percent stake. Carlsberg Okocim, the Polish operations of Denmark's Carlsberg, was third with 14.0 percent.

Zywiec had a largely positive 2003 with its net profit jumping by two-and-a-half times to PLN 206 mln on sales up 8.4 percent to PLN 3.20 bln. The brewing group sold some 910 mln liters in the year, with the 8 percent year-on-year growth outpacing average growth of 4.6 percent.


18 June, 2004