Beamish acquisition boosts sales for Heineken Ireland

STRONG sales of Beamish, Coors and speciality beer brands helped Heineken Ireland increase its turnover by 35% to €211 million in the first half of the year.

The strong sales growth was helped by the company’s acquisition of the Beamish & Crawford brands.

Despite this growth, however, Heineken Ireland said this is proving to be a tough year and it does not see any positive outlook yet for 2010. The company said the first six months of this year have proven to be one of the most challenging trading periods in the history of the drinks industry.

It said the value of the overall Irish beer market is down 3% over the year to almost €3.2 billion.

Heineken Ireland, however, increased its share of the beer market to 27%.

Coors draught saw growth of 27% in the on-trade market with bottle sales growing by 22% in off-trade.

Heineken Ireland’s stout brands, Beamish and Murphy’s, account for just over 10% of the national draught stout market and over half of the Cork market.

Beamish increased its share by 0.3% in a stout market that has declined in the first six months by 6.1%. Murphy’s sales were flat.

In a declining market, Heineken Ireland succeeded in growing market share, with company turnover for the six months increasing to €211m, underpinned by the addition and performance of the recently acquired Beamish & Crawford brands into the Heineken Ireland portfolio, particularly the Beamish and Fosters brands, as well as the Heineken and Coors lagers.

For the first time, Heineken Ireland is the leading lager company in the marketplace.

Corporate affairs manager Declan Farmer said: “In the face of deteriorating economic conditions, Heineken Ireland has delivered positive growth ahead of the market.”

On a group level, Heineken, the world’s third-largest brewer, reported a better-than-expected rise in first-half operating profit, driven by price hikes and cost savings despite lower volumes.

Net income climbed to €489m from €407m a year earlier. First-half revenue rose 11% to €7.18 billion on price increases and a 3.8% gain in beer volumes as a result of last year’s acquisition of former Scottish & Newcastle units.

The company’s much watched EBIT (earnings before interest and tax) before exceptionals increased to €993m, up a like-for-like 13%.

BNP analyst, Nikolaas Faes said: “The figures are much better than expected. They have very strong pricing... and the cost savings are probably equally impressive.”

Price hikes contributed 6.2% to Heineken’s revenue growth, almost offsetting a 6.6% volume decline. Wage costs rose slightly but energy/water and marketing costs fell.

Heineken said it expected net profit before exceptionals to rise by at least a high single-digit percentage amount for 2009, reflecting further cost savings, price rises, slower growth in Africa and a negative exchange rate impact.