Heineken Romania, subsidiary of Dutch beer producer Heineken, is considering closing down malt factories in Romania due to the high cost of raw materials. Its own production could be costlier than prices of French company Soufflet, which is to open a factory in Romania .
The factories in question are in Miercurea Ciuc, Constanta, Craiova and Hateg, according to sources in the beer industry. Malt could be imported or bought from the French Soufflet factory in Buzau, expected to be operational next year.
Heineken representative declined to comment on the matter.
The company's portfolio includes the Heineken, Gösser, Schlossgold, Silva, Ciuc, Golden Brau, Bucegi, Gambrinus, Harghita and Hategana brands.
The domestic beer market is worth some €1 billion. Domestic production in 2006 amounted to some 17.8 mln hectoliters, up by 16 percent compared to 2005, and twice as high as ten years ago. By the end of 2006, Heineken had a market share (in volume) of 26.7 percent, followed closely by Ursus Breweries - 23 percent, InBev - 20 percent, and Romanian Bereprod Breweries, with 10 percent.
Heineken Romania is not the only company on the domestic market to change its strategy. Ursus Breweries, Romanian subsidiary of American beer producer SAB Miller, also announced that owing to this year’s drought the company must increase imports from EU states, while, in previous years domestic production of malt met 80 percent of the company’s needs. Another major player on the domestic market, Romanian Bereprod Breweries, producing the Tuborg and Carlsberg brands, imports most of its malt from the Netherlands and Austria.
Beer sales in H1 2007 amounted to 9.4 mln hectoliters, up 20 percent year-on-year. Two thirds of sales of the entire beer production were made by the four multinational companies, while the remainder is sold by domestic producers whose market share drops year-on-year. The four multinational beer producers, all members of the Romanian Brewers Association, sold 7.29 mln hectoliters in H1 2007, 30 percent more than in the same period last year.
