Heineken beer sales feel the draught

IRISH sales of Heineken beers on draught have slowed in the past six months, as drinkers switch to off-sales products.

The Dutch brewer said growth in the Irish market was a sluggish 3% in the first six months of this year, a figure which was mostly boosted by a 20% jump in Heineken's pre-packaged products.

Bottles and cans of both Heineken beer and its Coors Light products have been very strong in the off-sales market, said managing director Pádraic Liston, but the focus of beer consumption in Ireland remained in the pubs, which accounts for 88% of total sales. "Beer consumption in Ireland is part of a wider lifestyle trend. It is much more consumption-focused. The strength of the Irish beer market is the quality of its pubs and the pub trade."

Mr Liston added that Heineken lager remained the focus for the company and its strong promotion and sponsorship of events would continue to ensure it maintained its position as the best-selling lager on draught in Ireland.

Murphy's stout has retrenched to its original Cork heartland and commands a 32% share of the local stout market, trailing the goliath that is Guinness.

Overall, the market for stout has fallen by 4.6% this year, as marketers continue in their attempts to encourage young drinkers to try the black stuff.

"We have changed our strategy and have refocused on Cork and Munster. We have consolidated our presence in Dublin, which is concentrated on the city centre the tourist trail," said Mr Liston.

Heineken has battled with Guinness in associating itself with music festivals, where in return for a sponsorship fee and blanket branding of the events, only its products are sold on site. Heineken's Green Energy Festivals staged events in Dublin and Cork over the May and June bank holiday weekends and also sponsored Slane this year.

Guinness has created an entire musical brand, Witnness, with an annual music festival and plans to roll out the brand name in its own right.

Heineken Ireland recently announced a new licensing agreement with Interbrew UK for Murphy's Irish Stout, which will lead to increased penetration for the brand in the important British market, the largest international market for stout.

Overall, Heineken's global net profits increased 11% to €330 million for the first-half of 2001, just below the consensus estimates. The beer company said it expects similar growth over the full year.

Heineken also launched a $287 million (€294 million) cash bid yesterday for Al Ahram Beverages Co (ABC), valuing the Egyptian brewer at $14 (€14.34) per share. The offer to be funded from existing resources is conditional upon Heineken acquiring acceptances for at least 76% of the shares, and the acquisition would immediately contribute to net profit.