SABMiller, Carlsberg, Heineken: Poland's beer itch – Focus

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As the third-largest beer market in Europe, Poland plays a sizable part in the fortunes of three of the world's largest brewers. As market leader, SABMiller is particularly keen that the country's consumers keep on chugging. But, in yesterday's first-quarter trading update, the company highlighted a worrying Polish itch. And, it's one that has proved contagious.

Poland is the third-largest beer market in Europe, behind Germany and the UK

Poland is the third-largest beer market in Europe, behind Germany and the UK

Yesterday, SABMiller praised Latin America and Africa for driving a 3% lift in first-quarter sales. Europe as a whole, however, was the main drag on performance, with Poland – which accounts for around 5% of the group's total business – seeing sales plummet by 17% and volumes fall by 15%.

SABMiller is the majority owner of Kompania Piwowarska, which accounts for around 39% of the country's market. At the end of last year, negotiations between Piwowarska and convenience store chain Zabka, which has around 2,300 outlets across the country, broke down. "They wanted trade terms that we were not prepared to give," a spokesperson for SABMiller told just-drinks today. "We chose to delist at the end of December, but we've been back in their stores as of the last week of June."

As it transpires, Heineken suffered a similar fate last year, with the company noting a volume fall in the country in the three months to the end of March. "We benefitted from that in the quarter the same as they will have from our delisting in the quarter just gone," according to SABMiller.

Then there is the matter of pricing, which, in Poland, is proving tough to implement. "We increased our prices in November," says SABMiller. "Heineken (in January) and Carlsberg (in February) followed, but their prices didn't immediately filter through to the shop shelves."

The hope for SABMiller, then, is that the beer market in Poland will right itself in the short-term rather than the long-term.

The battle goes on, however, with the country's brewers having to deal with a new normal. "Since the global economic crisis, Poland - probably more than any of our other European markets - has demonstrated a massive negative shift in the overall market," notes SABMiller. As well as a weaker consumer base, Poland has witnessed a significant shift away from the on-premise towards the off-premise. Throw in the big proliferation of discount stores such as Aldi and Lidl, and one understands why times are tough.

"The sheer competition on price (in Poland) has been really damaging for us," says SABMiller. With around 85% of the market between them, the three brewers will be hoping the Polish itch will ease off soon.

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