Dutch brewer Heineken NV expects its British beer volumes to halve as it introduces Heineken premium beer this year, and estimated its UK profits could fall by 20 million euros ($21.4 million) during 2003. The world's number four brewer is introducing in Britain its Heineken premium brand, which is already sold in over 170 countries with an alcohol content of 5%, to replace a weaker 3.4% brew sold in Britain for the past 34 years.

As its old licensing deal with the Whitbread beer company, now owned by archrival Interbrew, expires this year, the Dutch brewer has decided to abandon UK brewing of the weaker tipple and import its stronger cousin from the Netherlands.

It may be less volume but it will be more profitable volume," said Heineken Chief Executive Anthony Ruys in an interview.

Heineken had suffered in the UK as Whitbread had also started to brew Stella Artois as its premium beer under licence, which quickly expanded to take around one third of Britain's 3.9 billion pound annual premium lager beer market.

Heineken therefore needed a product in this growing British premium beer sector, which is expanding at over 10 percent a year.

Ruys said the group was setting up its own distribution system using logistics companies in the UK after importing the beer directly from the Netherlands. (Reuters)

27 March, 2003