E-Malt.com News article: Latvia: Aldaris to focus on exclusive top-quality and premium beer brands

Joint-stock beer and soft drinks producer Aldaris has decided to concentrate on production of exclusive top-quality and premium beer brands, therefore PET production facility will be moved out of Latvia; new jobs will be created as a result of the changes, but the company's overall workforce will be reduced, Aldaris communications director Laura Krastina told the Nozare.lv business portal on September 5.

Since the beginning of the year, Latvia's beer market has shrunk by 3%, whereas in 2012, the market declined by 5%. Furthermore, there is a fierce competition in the inexpensive beer brands' segment, which is why part of Aldaris operations, for instance, production of PET bottles, will be moved to other Carlsberg group breweries in Europe.

"In order to improve our cost-efficiency significantly, we have decided to change our strategy, moving lower-price segment products to other breweries and concentrating on brewing exclusive beer. This step will help the company to be profitable and viable again, keeping its market leader's positions," says Aldaris CEO Veli Pekka Tennila.

The new strategy also envisages organizational changes that will affect part of the company's workers – it is currently unknown how many, but the company will do everything in its power to help its workers.

Talks with Aldaris trade union will be held to reach agreement on a solution best for all sides, the company said. Only after the talks conclude will it become clear which workers will be affected by the changes.

Aldaris is also planning to invest EUR 3 million in restoration of its historic brewery building, which could create twenty new jobs that will be filled with workers from other Aldaris facilities, said Krastina. Nevertheless, it is clear already now that the company's total number of workers will become smaller.

All the changes in the company's strategy will be introduced by the beginning of the next season. Further comment will be released after the talks with the trade union, which could take one or two months.

Aldaris currently employs 270 workers.

The segment of exclusive beer brands, or the so-called craft beer segment, is constantly increasing in Latvia. According to AC Nielsen data, this market segment has increased 50% in Latvia and currently accounts for 14% of the total beer market in the country.

Last year, Aldaris posted LVL 25.6 million in turnover and LVL 2.8 million in losses. Regardless of the unfavorable situation in the sector, the company retained a 34% market share in Latvia last year and launched 20 new products, whereas its long-term investments totaled LVL 1.5 million.

Aldaris was founded in 1865 and it is currently a subsidiary of the Danish Carlsberg Group.


06 September, 2013