BELGIUM: InBev warns of more brewery closures
InBev has warned of the possibility of more brewery closures and job losses as it struggles to turn round its ailing western European business.
"We are facing the mother of all challenges in western Europe," said Stéfan Descheemaeker, president of InBev's western European zone, yesterday (13 June). "The zone accounted for 23% of InBev's operating profits in 2005, but only 1% of operating profit growth. That is unacceptable."
InBev caused a national outcry in Belgium when it announced plans to lay off staff at its breweries there. Descheemaker warned that similar moves could be expected as the group tries to reduce its cost base.
"Closing breweries or selling brands is always emotional, especially as beer is so much a part of the local community in much of Europe, but we cannot rule out restructuring measures in the UK, Germany, the Netherlands, Italy and France."
Descheemaeker said that the company's aim was to reduce costs and invest the money saved in brand innovation and marketing - a philosophy that has already proved effective in InBev's biggest zone, Latin America.
"Innovation will account for 4% of InBev's western European volume growth in 2006, more than any other zone. We have already launched a number of products in 2006, and more are planned for the rest of the year, and we expect them to help lift western Europe's share of operating profit growth to more than 1% this year.
"Anything else would be a failure."
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