just On Call - Heineken happy to dodge China mainstream - CEO
Heineken has a “low appetite” for China's mainstream beer sector and will continue to concentrate on the premium end of the market, the head of the Dutch brewer has said.
In a conference call after the release of Heineken's full-year results, chairman & CEO Jean-François van Boxmeer said today (13 February) that the company is shedding all of its JVs in mainstream beer in the country and focusing on premium “segment leadership”. “We will concentrate on the premium end, like the way we do in the US,” van Boxmeer said in a call with analysts.
His comments follow a study last week that claimed international brewers face a futile chase for profits in China despite volumes growth predictions. Market leaders Anheuser-Busch InBev and SABMiller may not turn a healthy profit in China until 2020, the study said.
Heineken distributes its namesake brand and Tiger in China through its JV with Asia Pacific Breweries, and in 2011 opened a plant in Guangzhou dedicated to manufacturing the brands.
A company spokesperson told just-drinks that Heineken does not release country breakdowns for its brands but said Heineken and Tiger enjoyed “strong growth” in China last year.
Heineken has spent the past few years pulling out of China's mainstream beer market. In 2011, it sold its share in Kingway, a share that was eventually snapped up by SABMiller JV China Resources Snow Breweries. Also in 2011, Heineken offloaded its stake in Jiangsu DaFuHao Breweries, also to China Resources Snow.
Van Boxmeer also said that a recent review of its Finland unit is a one-off strategic move and not an indicator of a broader review of its European businesses. Earlier this month, Heineken confirmed that it has launched a strategic review of its Hartwall unit in Helsinki.
Earlier today, Heineken posted healthy rises in profits and sales for 2012. Group volumes also increased, by 3.4%, and international sales of brand Heineken were up by 5.3%.
For just-drinks' coverage of Heineken's full-year results, click here.
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