Market Analysis- Beer

Thousands of years ago, people discovered that by means of cereal fermentation they obtain a nourishing and tasteful drink, namely the beer. The mass beer production on the Romanian territory goes back to the beginning of the 1 th century, !hen "ohann de #otha inaugurated a beer factory, in 1$% , &ust outside of Bucharest. 'ery soon, the beer house became an institution and most of all, a meeting point for &ournalists, politicians or theatre people. (ver the past 1% years the bre!ing industry had a positive trend in terms of )uality, diversity of brands and production. This evolution !as possible thanks to the ambitious policies of foreign investors that led to an increased competition on the domestic market Romanian beer is kno!n in *entral and +astern +urope for its taste and very lo! price. Romanian la! considers beer and !ine to be foodstuffs and therefore they are not sub&ect to the usual tariffs and restrictions imposed upon alcoholic beverages. As a result, there are over ,- ma&or beer brands in Romania, and many small, local producers. 1. Market Area (f the 1.- small bre!ers that e/isted ten years ago in Romania, only ., have left and the e/perts say the market is already settled, and the emergence of a ne! competitor is very unlikely. (nly a global manufacturer can succeed, and only if he is !illing to invest a large amount of money. (ne can say that the Romanian beer market is already consolidated, mature, highly competitive, a market !here four of the top five global bre!ers are present. 0o!ever, !hen !e speak about market area, !e speak about the geographic 1one containing the people !ho are likely to purchase a firm2s goods or services. As a result, the consumption of that specific product or service differs. 3n !hat concerns Romania, the beer market is shared bet!een 0eineken, *arlsberg Bre!eries A45, through 6nited Bre!eries Bereprod 5R7 86RBB9 subsidiary, 3nBev and 5AB Miller :lc, through 6rsus Bre!eries 5A, dominant players controlling about $%; of the total market, estimated at a volume of about .% million hectoliters. (bviously, the four bre!eries cover all the eight development regions of Romania, regional divisions !hose purpose !as to assure a coordinate regional development as the country progressed to!ards accession to the +uropean 6nion <

The =orth-+ast >evelopment Region< 3a?i, Boto?ani, =eam@, 5uceava, BacAu, 'aslui
The Best >evelopment Region< Arad, *ara?-5everin, 0unedoara, Timi? The =orth-Best >evelopment Region< Bihor, Bistri@a-=AsAud, *lu&, Maramure?, 5atu-Mare, 5Ala& The *entral >evelopment Region< Alba, 5ibiu, Mure?, 0arghita, *ovasna, Bra?ov The 5outh-+ast >evelopment Region< 'rancea, #ala@i, BrAila, Tulcea, Bu1Au, *onstan@a The 5outh >evelopment Region< Arge?, >Cmbovi@a, :rahova, 3alomi@a, *AlAra?i, #iurgiu, Teleorman Bucharest D 3lfov The 5outh-Best >evelopment Region< Mehedin@i, #or&, 'Clcea, (lt, >ol&

2. Market Structure 3f you ask an e/perienced marketer !hat !ill determine the success or failure of a specific product ,theyEll often )uote an age old industry rule< F%; audience, .% ; offer, 1%; creativity. Regarding the beer industry, by correctly targeting, and segmenting the customer database to ensure that the right offer reaches the right people, the product have a %; chance of success before they even start !ork on the creative. The target market must be defined in terms of si1e, structure, gro!th prospects, trends, and sales potential. Along !ith the process of targeting, market segmentation is actually dividing the market into groups of buyers, !here each group sees the product differently. These groups are based on variables such as age, gender family si1e, income, occupation, education, religion, race and nationality and as you may e/pect, demographic segmentation variables are amongst the most popular bases for segmenting customer groups.

3n terms of beer consumption in Romania, obviously, beer became !idespread, from pubs to the finest clubs in big cities, differing only the brand and consumer typology. But the main )uestion still remains < GBho are the beer drinkersHI After increasing strongly earlier in the revie! period, beer total volume sales declined for a third consecutive year in .%11 due to the impact of the economic do!nturn and the austerity measures taken by the government in order to reduce the budget deficit and conse)uent drop in consumer disposable incomes. 3n addition, the area !as unable to sustain the high gro!th recorded in earlier years of the revie! period due to the fact that per capita beer consumption in Romania in .%%$ !as already among the top ten highest rates in the !orld D a fact !hich is surprising !hen considering that Romania is a traditional !ine producer. Bhen it comes to his favorite type of beer, the preference is clear< pale ale, medium strength, packaged in %.- liter glass container.

As e/pected, the variety of brands concerning beer has led to consumer segmentation into categories by brands, price and taste. As a conse)uence, #Jsser premium brands such as 0eineken and #osser are addressed to a superior segment of consumers !ith the age bet!een .--K- years, !ith a fairly neutral taste so as to please everyone. They have a higher price but the consumer is !ealthier. The average segment of consumers, !here 5ilva and *iuc fit !ith a pronounced hop flavor and addressing only to those !ho prefer this taste and have some kno!ledge about beer though. They have a lo!er price. The inferior segment handle other brands< #oldenBrau, Bucegi, #ambrinus generally consumed by youngsters in large enough )uantities. Linally, there comes 5chlossgold, a non-alcoholic beer addressed by its uni)ue characteristics, to a very broad categories of consumers< regardless of se/, age, education or income, for those !ho !ant to en&oy a beer but also to avoid the conse)uences of alcohol consumption.

The Beer Manufacturers Association statistics sho! that the biggest consumers of beer are business people consuming an average 1M.F- liters 4 person 4 year . Mean!hile, in the peasant households four liters of beer are consumed per year ,and the employees also consume annually $.liters of beer per person. 5ame Beer Manufacturers Association data sho!s that F$.,F; of the total population consume beer, but not only men drink beerN Bomen are consumers of beer in greater number than men, statistics sho!ing that over $M; said they are consuming beer, almost si/ percent more than men. (n the other hand, significant differences are recorded among consumers of beer if !e take into consideration another segmentation variable< the age. According to this criterion, it appears that most beer drinkers are aged bet!een 1$-KK years old. After that, their number decreases significantly 8,1; against MF;9. 3n the !arm season KM.M; of the Romanians are daily tasting this drink, !hile only ,.- ; of the population rarely consume beer in summer. The top choices of types of beer sho!s that almost F%; of Romanians choose lager. 3t is follo!ed by the bro!n ale, !ith 1K..K; and 1.,; alcohol free. +ducated consumers of beer appreciate at a rate of ,,; the light beer, !hile those !ith average education at FM;. The beer market has currently 1.- brands and finds a gro!ing preference for premium and super premium products, compared !ith the lo! cost ones. T!o thirds of those !ho drink beer are married, and ,%; of drinkers do not have children. (f all beer drinkers, K; usually consume alcohol beer !hile only K; are non-alcoholic beer drinkers. 7ager is a fre)uent option for 1; of the cases, !hile the bro!n beer is consumed in a small percentage 8,;9. Regarding the place !here drinkers en&oy to consume beer, the statistics sho! that < -1; of consumers drink bottled beer only at home, ; prefer drinking beer some!here else, and there are still K%; for !hom the place does not matter so much, drinking beer at home and else!here. The type of package preferred by the households !as the :+T, covering almost F%; of the purchased beer volume and the preferred gram !eight !as the . 7 one. Analy1ing the evolution of :+T, !e see that it has not registered e/plosive gro!th in the Romanians2 preferences, last year reaching a rate of K-.,; from K%.K; in .%%,. Although a slight decline, glass took also a significant gro!th, K%.-;. Traditional trade continues to play a very important role for this category, more than K%; of the households buying the beer in the kiosks. 3n .%%$, the volume of beer purchased in this type of

store sa! a slight decrease in favor of the hypermarkets. (ver $.- million hectoliters !ere sold in supermarkets and the rest in neighborhood pubs and shops . 3n conclusion, !hat really matters is that the consumers !ill become increasingly sophisticated and !ill re)uire genuine products and better services.

3. Market capacity Romanians love their beer, especially on a scorching summerEs day, but so far it looks like not even the torrid !eather !ill help bre!ers defy the drop of recent years. The local beer market fell by M.- percent in .%1% and another . percent in the first )uarter of .%11, forcing local bre!ers to adapt to the sober ne! conditions. The beer became less and less a seasonal product !hich Romanians chose no matter the !eather conditions because it !as a 1%%; natural product and suitable for each situation of consumption. 3n .%1%, the unstable economic environment that affected the consumers and their habits has led to a decrease of M.-; beer market over the previous year, registering a total of 1F million hl. Beer consumption per capita has follo!ed the same decreasing trend, reaching a value of F$ liters, !hilst

consumer preferences regarding the packaging of beer remained constant for :+T - K .M;, bottleM1,F;, can-1,; and draft - M;.. The main distribution channel of the beer remains the retail market. According to market research, through the retail market sales units, there are sold the four multinational beer brands, !hich represented %.K; of the total beer sales bet!een .%%F and .%%$. Both in terms of volumes, as !ell as values, the main channel of retail distribution remains the one represented by the grocery store. Bet!een "uly .%%F and August .%%$, these locations e/perienced K1..; of volumes sold throughout retail market. 7arge grocery stores had a sales rate during "uly .%%F-August .%%$ e)ual to .F; by volume component and $.,; on the value. Oiosks and general stores have reached a volume of 1M.,; of the market, !hile the value !as of 1.; of the total sales of beer. 0ypermarkets have reached a holding of 11.$; of volume component and .-; on the value. (ther types of stores have made .M.$; of sales volume of beer on the retail chain and MK.M; of the total values.

3n .%%$, the statistics sho!ed that each Romanian had tasted one beer daily during +uropean

Lootball *hampionship and so there !ere sold 1, . mil hl of beer in "une .%%$, !ith 1%; more than in the similar period of previous year, !hen they reached a volume of 1,FM mil hl. P+uropean Lootball *hampionship !as one of the premises of a raised beer consumption in this period, together !ith the good !eather from the second part of the month. 3n the first semester of .%%$, the beer market reached , mil hl, !hile the members of PBre!ers of RomaniaP Association had a sales volume of F, mil hl. 3n the same period of .%%F the sales of Bre!ers of Romania members !ere of F,M mil hl beer, the increase being of $;. Also, the *A= segment has registered the biggest gro!th, .-; more than .%%F. =evertheless, the :+T segment maintains its leading position in consumer2s preferences, !ith a share of K,.-;, follo!ed by the bottle !ith a share of MF.-;. .%%$ !as also the year !hen the dynamics of the beer market and the steady increase in beer consumption per capita forced producers to reinvest a portion of revenues to increase production

capacity, to meet the evolution of demand and not to loose the market share. Thus, after entering the Romanian market, four Romanian Bre!ers Association2s member companies have invested in production facilities F,, million +uros. An e/ample of this is the investment of -% million +uros for the development of the factory started in Timisoara by 6R565 Bre!eries last year. Lollo!ing this investment, plant capacity had increased by .%%; and the company2s total production capacity !ill reach ,.M million hectoliters per year. They proved once again their commitment to build a strong and responsible beer market in our country. 0elped by over ,F%% direct employees, from the 1. bre!eries from all over the country, they contributed !ith .F. million +uros to the budget state.

As a result, sales of beer on the local market !ent up ,.F percent in .%%$ against .%%F, up to .%.F million hectoliters according to producers in the beer industry, )uoting the =ational 5tatistics 3nstitute. Romania is among the only seven +uropean countries !ith a production of over .% million hectoliters and among the first si/ !ith an annual consumption of over - liters per capita. 5ales achieved by the Bre!ers Association in Romania reached a volume of 1-.M million hectoliters, less than K.K; compared to .%% , and investments have decreased, due to reduction in investment in the national economy as a !hole, reaching an amount of -1 million euro, appro/imately -%; less than the previous year.

The contribution to the stateEs budget through various ta/es 8'AT, e/cise duties, personal and social security contributions9 of the members of the Association reached .F% million euro, up by F million euro in comparison !ith .%% , in the conte/t of an adverse economic environment. The Romanian bre!ers continue to focus their efforts to strengthen the beer industry reputation on the Romanian market. 3n the same time they respect the consumer interests and promote responsible and moderate consumption, investing in social responsibility programs, !hether !e talk about promoting a balanced life style or educating the drivers. . Lurthermore, they continue to react !ith promptness to the needs of the Romanian consumer and they develop pro&ects in time in order to adapt their production capacities. 4. Market dynamics 'olume of sales in .%%,< Q 1F.F millions hl 'olume of sales in .%%$< Q .%.. millions hl

Y n R = n 1 1 R1%% , !here< Y 1

o o o RT 1K.1.K

n - the number of years taken into considerationS

Y n- the sales volume in the year .%%$S Y 1- the sales volume in .%%,S

As !e can see, the beer market has a small gro!th tendency since the volume of sales has increased during the period .%%,-.%%$ and the average variation rhythm it is positive, this proving a very attractive market. Bith an annual gro!th rate of K;, Romania is to become the second commodity market after :oland. The analysts say that this increase is due to the relatively lo! level of ta/es, significant improvement in the )uality of beer, as a conse)uence of the investments made by bre!ers, and also to the professionalism and intensity of marketing activities. 5. Market Evolution There is least one market !here !e are !orld champions - the beer market. The recipe for success in the beer market !ill be taken on other similar markets - milk, soft drinks or !ine. Be should learn from bre!ers about production, marketing and market development. *onsuming about 1%% liters of beer per capita, !e fit in the top 1% !orld!ide, !hile still t!ice drink less bottled !ater than the +uropean average. The boom of the beer market lately sho!s that many similar markets !ill gro! almost identical< production diversified and ever changing, professional marketing ideas backed by substantial advertising budget and an accelerated development of the market. Lirstly, the market development is surprising. This year, !e talk of a market value estimated at 1.K billion +uros. There is only the passion for beer and football or anything elseH (r is it &ust because there are some skilful branding e/ecutivesH The right ans!er is probably a little of each. 5ales !ere driven by market segmentation too. The concept of :+T !as developed and also the huge market, being the fastest gro!ing segment by far. 3f !e compare it to other markets, such as !ine or milk, !e can see that gro!th rate is almost half. =ot necessarily &ust the idea of change of the product itself, but the !ay it is presented publicly. 0ere !e go to the second feature, innovation in marketing. 3n the 1 %s, there !as a distinction bet!een the t!o levels of )uality and only a fe! brands, the Romanian beer bottles !rapped in bro!n labels and the !estern beer brought in aluminum cans. =o! !e have all the possible combinations and brands. Moreover, a local producer, !ith Romanian capital managed to become leader on the :+T segment before selling to multinational business. The packaging, cartons, doses, bottles, plastic bottles are all solutions for customi1ation and sales gro!th. 3n .%%$, the beer market reached 1 .K million hl, !hich means that practically in the last 1. years, had doubled. 3n 1 ,, it had a volume of $., millions hl. And also for .%% , the anticipated gro!th !as around -; - very high if you are considering .%%$ values that serve as a basis. Also, prices increased given the fact that !e import about $%; of ra! material and bre!ing. 0o!ever, increasing the revenue generated by multinationals in Romania is sometimes greater than any increase in the Balkan region, e/cepting Romania.

6. Market conjuncture The fluctuations registered by the demand and the offer from a certain period of time and the overall tendencies e/pressed as the ratio bet!een these fluctuations and their effects create the market con&uncture. The evaluation of the market con&uncture from a certain period is done by analy1ing various indicators. Among these !e have selected the most important economic indicators< the #>:, the volume of !holesale production, the inflation rate, the unemployment rate and the e/change rate 7eu4+uro. #>: >uring the nineties Romania e/perienced t!o sharp recessions and recovered only after .%%%. 5ince then, Romania recorded high #>: gro!th rates until .%%$ sho!ing the typical patterns of a catching up economy. After being hit by the financial crisis in early .%% 8the crisis arrived !ith some delay in Romania, yet the harder9 RomaniaEs #>: dropped back belo! the level of .%%F and there are no signs for a )uick recovery. The #>: in .%%$ !as -1M,1F- miliarde lei , !ith F.1; over the #>: of .%%F.

Bholesale :roduction Year .%%F .%%$ roduction !olume "kl# 1 K. .%% . %FF K%% $%an&e vs. prior year 11.1; F.%;

As seen from table above, the year .%%$ has brought an increase in !holesale production of about F.%;. 3nflation rate

.%%$ !as not a good year in !hat concerns inflation. Almost all the economic gro!th !as balanced by this inflation increase. 6nemployment rate The unemployment rate according to the 3B7 83nternational Bureau of 7abor9 has reached a value of K.1% ; in .%%$, as compared to the ,.1% ; in .%%F.

(ver ,F%% people are !orking directly in the 1. bre!eries of our members, located in Bla&, Bra?ov, Bu1Au, *lu&-=apoca, *onstan@a, *raiova, 0a@eg, Miercurea-*iuc, :antelimon, :loie?ti, 5ebe? and Timi?oara.

+/change rate 7+64+6R(

.%%.%%

.%%,

.%%F

.%%$

By analy1ing the previous factors, the follo!ing table can be created< 0ighly unfavorable 8-.9 #>: Bholesale production 3nflation rate 6nemployment rate +/change rate U1 -. -1 % 'verall Market $onjuncture( ) 6nfavorable 8-19 =eutral 8%9 Lavorable 8U19 0ighly favorable 8U.9 U.

*. +emand and o,,er According to the Association, in late .%%$, the beer market in Romania recorded sales amounting to about 1., billion euro and .%.. million hectoliters. Those figures represented a K.1 percent gro!th compared to .%%F, !hich ranked Romania among +uropeEs top ten beer producers. The local branches of the afore-mentioned four international producers supplied as much as $- percent of all beer sales in Romania over .%%$. 3n .%%$, the four sold a total of 1,.K million hectoliters of beer, by $ percent more compared to the previous year, and reported a turnover of %% million euro. Bith respect to containers, beer in plastic bottles proved the most appealing to customers, accounting for K,.- percent of all sales. (f all types of containers, canned beer recorded an upsurge, as sales gre! by one )uarter in .%%$ compared to the previous year. The other t!o segments, namely bottled and draught beer, reported drops in sales of MF.- per cent and M percent respectively. 0o!ever, over )uarter one of the current year, nation-!ide beer consumption dropped by 1% percent compared to the same period of last year, from . million to million hectoliters. The main producers of beer in Romania are <

:art of the international 0eineken #roup, 0eineken Romania !as funded in 1 $, under the initial name of Brau 6nion. 5tarting March .%%F, it became 0eineken Romania, change that also implied the natural adoption of the 0eineken values and culture.

5tarting .%%%, 0eineken Romania has a strong position on the Romanian beer market, !ith almost M%; market share 8A* =ielsen, "une .%%$9 after having bought Bere Mure? in .%%$. The brand portfolio of 0eineken Romania is the !idest on the Romanian market !ith 1. brands from all segments< 0eineken, Vipfer 8imported brand9, #osser, 5chlossgold, 5ilva, *iuc, #olden Brau, =eumarkt, Bucegi, #ambrinus, 0arghita, 0a@egana. 0eineken Romania has - bre!eries throughout Romania, in *onstan@a, *raiova, 0a@eg, Miercurea *iuc and Targu Mure?. The *ompany has appro/imately 1-%% employees. 3n .%%$, 0eineken Romania invested over -% million euros mainly in its bre!eries. 3n the ne/t years the company !ill continue the investments in Romania.

3nBev Romania is part of the multinational bre!er Anheuser-Busch 3nBev, the leading global bre!er and one of the !orldEs top five consumer products companies. 3nBev leverages the collective strengths of its 1.%,%%% employees based in operations in over M% countries across the !orld. Anheuser-Busch 3nBev manages a portfolio of over .%% brands that includes global flagship brands Bud!eiser, 5tella Artois and BeckEs, fast gro!ing multicountry brands like 7effe and 0oegaarden, and strong Glocal &e!elsI such as Bergenbier, Bud 7ight, Brahma, Wuilmes, Michelob, and "upiler, among others. *urrently 3nBev Romania o!ns t!o bre!eries, in :loieti and Bla&, has over F-% employees and a national distribution net!ork. 0aving been present on the local market for 1- years, 3nBev Romania successfully produces the brands 5tella Artois, BeckEs, Bergenbier, 7o!enbrau and =oroc and imports the Belgian specialties 7effe and 0oegaarden.

6rsus Bre!eries, is a subsidiary of 5ABMiller plc, one of the !orldEs largest bre!ers. 5ABMiller plc has bre!ing interests and distribution agreements across si/ continents. 6rsus Bre!eries !ith the head)uarter in Bucharest o!ns K bre!eries in *lu&-=apoca, Timioara, Bu1Au and Braov and employs over 1,-%% people. 6R565 Bre!eries brands are :eroni =astro A11urro, 6R565, Timi?oreana, *iuca?, 5te&ar :ilsner, ReddEs and :ilsner 6r)uell. At present, the investment of 5ABMiller in Romania e/ceeds the amount of .-% million +6R(, !hich reflects the companyEs concern to meet the demands of the Romanian consumer and ensure the )uality of its products by developing the Romanian brands. The household beer consumption increased in the year that has &ust ended by more than -; in volume. 3n .%%$ as !ell, $ out of 1% households bought the category at least once. Three big beer manufacturers dominated the household consumption< 0eineken, 3nBev and 6rsus Bre!eries. 5imilarly

to .%%F, they provided almost F%; of the total beer volume bought by the households in Romania. 3n .%%$, the best bought beer brand !as - by far- Timisoreana. Almost M%; of the household consumption in volume in .%%$ !as represented by 6rsus Bre!eries and A1uga, increasing as compared to .%%F. The type of package preferred by the households is the :+T, covering almost F%; of the purchased beer volume. 0o!ever, in .%%$ a change occurred in the householdsE preferences, because, as compared to .%%F, they buy more can beer in disfavour of the bottled beer. The preferred gram !eight is the . 7 one. Traditional trade continues to play a very important role for this category, more than K%; of the households buying the beer in the kiosks. 3n .%%$, the volume of beer purchased in this type of store sa! a slight decrease in favor of the hypermarkets. 3n .%%$, the households !ith incomes above average bought almost M%; of the beer volume. Moreover, almost ,%; of the value of the purchased beer comes from the families !ith M, K or members, and appro/imately .%; from families !hose main !age earner is M%-M years old 8their !eight in the sample being of 1-;9. =o international beer brand has made it into the e/clusive club of those !hose annual sales e/ceed -% million euros, !hile domestic brands such as Timisoreana, Bergenbier, #olden Brau, 6rsus and Burger have all overshot this mark, by as much as tens of millions of euros in some cases, reveals a survey conducted by Viarul financiar. Bhereas ten years ago these brands !ere selling &ust several hundred thousand hectoliters or even less, in late .%%F more than five domestic beer brands generated sales !orth above one million hectolitres, !hich could translate into at least -% million euros. Timisoreana, the best-selling beer brand in Romania, produced in .%%. less than 1% pct of 6rsus Bre!eries sales, !hile in late .%%F the same brand accounted for almost half of volumes sold by the local branch of 5ABMiller group. Bith sales volumes of ... million hectoliters in .%%F, Timisoreana sales could this year hit 1M%-1-%m euros, according to Viarul Linanciar estimates. 3n terms of volume, Timisoreana sales surged KM pct in the last fiscal year, and by -1; in terms of value. Bergenbier, one of TimisoreanaEs main local rivals, generates almost half of 3nBevEs domestic sales, according to previous statements by Mihai #hyka, the companyEs former general manager. As a result, out of a sales volume of M. million hectoliters registered by 3nBev last year, Bergenbier sold over 1. million hectoliters. The best-selling brand in 0eineken RomaniaEs portfolio is #olden Brau, !ith turnover !orth around 1%%m euros, according to Viarul Linanciar estimates. 5tarting this year, 0eineken RomaniaEs portfolio !ill also include 5ovata, >racula and =eumarkt brands previously o!ned by Bere Mures. The production facilities o!ned by Bere Mures until the first half of this year had an annual capacity of 1., million hectoliters, and registered sales of 1.. million hectoliters in .%%F. After =eumarktEs incorporation in 0eineken RomaniaEs portfolio, Burger beer, part of the portfolio of +uropean >rinks, o!ned by Micula brothers, is the only independent brand !ith large volumes that competes !ith multinationalsE brands. 6rsus is the best-selling brand on the on-premise segment both in terms of volume and value, according to a .%%F survey conducted by market research institute M+MRB. 3n overall retail 6rsus held a F-pct market share, follo!ed by *iucas, !hich accounted for , pct of the total domestic beer market.

The only domestic branch of a multinational that does not include any Romanian brand in its portfolio is 6RBB, controlled by *arlsberg >anish group. 6RBB, kno!n domestically through the Tuborg and 5kol brands, has only international or regional brands positioned on the premium segment in its portfolio. 7ast year the beer market e/ceeded 1.. billion euros and reached a volume of 1 .K million hectoliters, up ., pct from the previous year, !hen it hit a sales volume of 1F.F million hectoliters. 3ts gro!th in .%%F !as smaller than the advance registered in .%%, due to lo!er sales in the last )uarter of .%%F. This year, the main domestic bre!ers, 0eineken Romania, 6rsus Bre!eries, 3nBev Romania, +uropean >rinks and 6RBB, e/pect the market to rise by appro/imately - pct. 3n .%%$ the Romanian beer market gre! by around 1%;, although Business 3nsights believes this rate of gro!th !ill not be sustained as the market reaches maturity over the ne/t five years. By this time Romanian per head consumption is likely to be one of the highest in +urope.

(ne Romanian consumed an average of M liters of beer in .%%$, K liters more than .%%F. Romania is among the top 1% countries in +urope !hen it comes to beer consumption per capita. Xear Romania .%%, $1 .%%F $ .%%$ M

-.

rices and tari,,s Beer sales by type of packaging < 3n .%%$, sales on the *A= segment have gro!n .-;, Romanian consumers having a preference for this type of packaging. .ype o, packa&in& :+TR *anR BottleR >raughtR 2))6 K%.K $.F K,.. K.F 2))* K-., 1%.K K%.M.2))K,.1M MF.M

*% of the total beer sales The ta/es, representing 'AT, e/cises and direct ta/es for employees, !hich the members of the GBre!ers of RomaniaI Association pay yearly to the Romanian state, have a great impact to the state budget. Xear .%%, .%%F .%%$ .F.

BRYs .1K .,K Members Figures expressed in million euros

:rice level for .%%$ Brand 0eineken #olden Brau Wantity :+T *an Bottle :+T *an Bottle :rice 8R(=9 M.M.$ K ..M

*iucas 5tella Artois BeckYs Bergenbier Albacher *arlsberg 0olsten Timisoreana

:+T *an Bottle :+T *an Bottle :+T *an Bottle :+T *an Bottle :+T *an Bottle :+T *an Bottle :+T *an Bottle :+T *an Bottle

K ..M -.M M.M.M.-.$ K K.. M.K M.K ..M

/. 0mports and e1ports The strong position of multinational companies !ithin Romania !as an important determinant of the high level of domestic production and the continuing limited e/tent of imports overall. The opportunity open to multinationals operating in Romania to import their o!n premium brands manufactured else!here !ithin the +6 follo!ing the elimination of import ta/es !as not taken up, due to the substantial transportation costs involved, !hich !ould have had a significant impact on the final selling price. (n the other hand, the lo! unit price of beer sold in large :+T bottle packaging imported from 0ungary and Bulgaria, !hich benefited from lo!er transportation costs, had a pronounced impact on the structure of imports during .%%$. 0o!ever, the strong position of those multinationals active locally !as not seriously affected by the gro!th in imports, although a fe! regionally-based domestic producers struggled in the face of stronger competition from economy imported brands, especially as it !as rumoured that these imports !ere not sub&ect to e/cise duty. 3mports and e/ports of beer both e/perienced very dynamic gro!th in .%%$S reaching about three times the figures in .%%F. .%%$ also represented an important change in the structure of imports, !ith the traditional countries of origin for premium imported brands, such as #ermany, the =etherlands, Belgium, the *1ech Republic and Austria, being outpaced by imports of economy

varieties from Bulgaria and 0ungary. These t!o countries together accounted for ,$; of import volumes during .%%$, although sales !ere limited to the neighbouring southern and !estern districts of Romania respectively. 3reland !as the only source of stout. +/ports also nearly trebled during .%%$, but remained limited compared !ith imports. Romanians preponderantly consume brands from the internal beer production, the !eight of imports being under .,-;. As you can see in the follo!ing table, beer imports gre! over .%%$, from 1$% thousand to -%% thousand hectoliters, as did e/ports, from ., thousand in .%%F to ,% thousand hectoliters in .%%$. Xear 3mportsR +/portsR .%%K %.%%.%.K .%%%.%.$ %.%-, .%%, %.%M. %.%F, .%%F %.1$ %.%., .%%$ %.%.%,

*million hl Source : National Institute of Statistics