Slovakia: Heineken Slovensko, a unit of the Dutch brewer that controls 43 % of the domestic beer market, said on November 7 that reduced demand had forced it to shut the doors at its brewery in the northern central Slovak town of Martin, one of four it owns, under the Reuters report. Spokesman Peter Svec said the main reason for the closure was that beer drinkers had less money in their pockets following hikes in excise taxes on beer and other goods by the finance ministry after it underestimated the 2003 budget.

"The decline in people's purchasing power has resulted in a significant decline in beer sales," Svec said. The hikes, which added around 1.5 koruna (four U.S. cents) per 15 koruna bottle, should cause beer consumption to fall for the first time since 1994, Roman Sustak, director of the Slovak Beer and Malt Producers Association, said. "We expected consumption to go even higher this year. But now we think there might be an annual decline of around 5 percent," Sustak said. "We have seen only slight adjustments to beer prices, but consumers have reacted very strongly."

Last year, Slovak brewers had their best year since the country emerged from the former Czechoslovakia in 1993. In 2002, it ranked ninth in global beer consumption per capita. The Czechs were first. But sales have dropped roughly 14 percent each month on an annual basis since August, when the second of two tax hikes came into effect. Those increases, combined with government utility price hikes earlier this year, have forced consumers to realign spending habits, and beer consumption could slip back to about 24 gallons per head, Sustak said.

Heineken said the production of the Slovak Martiner brand would be shifted to its brewery in the central town of Nitra. The closed Martin plant employed 121 people. Heineken Slovensko, which also makes the Zlaty Bazant, Corgon and Kelt brands, led the local market with sales of 55.6 million gallons last year.

12 November, 2003