Central and Eastern Europe is Heineken’s largest region by volume and is showing continued growth. The business is benefiting from integration of acquired breweries and the outcome of portfolio optimisation. The Heineken brand is increasing its popularity.
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2007 key figures
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Revenue €m
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3,686
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EBIT (beia) €m
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444
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Heineken brand volume
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2.6 million hectolitres
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Consolidated beer volumes
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51.1 million hectolitres
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In 2007, beer consumption in Central and Eastern Europe was exceptionally strong as a result of the mild winter and spring. Consolidated volume increased organically by 8.3%, with Russia, Poland and Romania as major contributors. Acquisitions in 2007 in the Czech Republic (Krusovice brewery) and Germany (Schmucker brewery) contributed 287,000 hectolitres.
This growth in the region is driven in part by an increase in purchasing power and a structural shift from spirits to beer. Economic growth in new member states of the European Union and the development of a modern off-trade also continues to play an important role in the long-term growth of beer consumption of the region. With growing income levels across many markets, the interest in premium beers is increasing strongly.
The Heineken brand added more than 400,000 hectolitres (+19%) to its volume, due to initiatives such as the introduction of clear plastic labels in Romania and Hungary, the installation of 11,000 Xtra cold draught beer units, the introduction of DraughtKeg and innovative advertising campaigns. Russia, Greece and Poland were major drivers of growth of the Heineken brand.
Revenue increased organically by 8.1%, and fluctuations in currencies of Poland, Romania and Slovakia contributed on balance EUR41 million to revenue (+1.2%). EBIT (beia) increased 22% to EUR444 million largely driven by higher volume, a positive price and sales mix and a modest increase in fixed costs.
In 2007 and January 2008, Heineken continued the expansion of its business in the region through a series of targeted acquisitions. In the second half of 2007 the Krusovice brewery was acquired in the Czech Republic and the Syabar Brewing Company in Belarus, whilst the acquisition of the Rodic brewery in Serbia was announced. Early 2008, Heineken established a partnership with Efes Breweries International that will invest in the growing Uzbek beer market. In addition, both companies intend to merge the brewing operations in Serbia and Kazakhstan, leading to number two market positions in both countries. | 
