Heineken increases market share

HEINEKEN increased its share of the Irish beer market in the first half of this year as demand for its namesake lager remained high.

The rise came as the overall beer market in the Republic declined.

Sales volumes in Ireland increased by 1% in the six months to the end of June, Heineken said yesterday as it released its interim results for the whole group. Irish sales in the period amounted to €145 million.

The company did not give a year-earlier figure, but in the 12 months to June 2004 the Irish division delivered sales of €311m. Heineken Ireland, which employs more than 400 people at its operations in Cork and Dublin, accounts for a very small percentage of overall sales at the group, which trades in 170 different countries.

Heineken, which also makes Amstel lager, Coors Light and Murphy’s Irish stout, increased its share of the overall beer market in Ireland by 1% to 19.8%. The group’s namesake lager retained its No 1 position with almost 30% of the overall lager market.

Murphy’s also maintained its market share helped by an increase in advertising, the company said. “We are quite happy with our performance in the first six months of the year,” said Declan Farmer, a spokesman for Heineken Ireland. “We have managed to grow our market share in a declining market, which is very positive.”

Industry figures show a 5% decline in the Irish beer market in the first half of the year, as consumers stay away from pubs and choose wine and spirits over beer. On-trade, that is sales from pubs and bars, has declined in Ireland since the smoking ban was introduced in March last year as more people choose to drink at home where they can smoke.

Heineken said that while the on-trade business, which accounts for 78% of its sales, continues to lose share to the off-trade business, the rate of growth of the off-trade sales is slowing. Sales at off licenses and supermarkets grew by 7% in the first half of this year, compared with growth of 15% last year.

Across the group, Heineken reported a 5.8% increase in total sales to €5.1 billion in the first half. Meanwhile, net profit declined 8.2% as it spent money restructuring its business in Europe and lost out because of unfavourable exchange rates. It is also suffering in the US, where volumes decreased by 2.5% as yet again more people chose to drink spirits and wine over beer.

Heineken said it expects its full-year results to be in line with market expectations, with organic profit growth not exceeding mid-single digits.

The group said that the predicted organic growth in profit and the positive contributions from new acquisitions will likely fail to offset the negative impact of foreign currencies, particularly relating to the US dollar.

The company will pay an interim dividend of 16 cent a share.