Sober times for alcohol firms as ad ban bites
By : Greg Goodale
Beer producers are already starting to feel the pinch of the alcohol ad ban that went into effect last month. Some are even predicting that the multi-billion-złoty industry will stop growing as a result.
The market will not shrink, but growth will halt, said Andrzej Długosz, beer industry spokesman with PR firm Cross Media. During the past years it grew on average 7-8% a year. There were years when it reached 12%.
The amendments to Polands alcohol law introduced last April finally came into force in September. The measure was introduced to try to limit the level of alcoholism in the country. The State Agency for the Prevention of Alcohol-Related Problems estimates there are about 700,000 alcoholics in Poland and about 2 million alcohol abusers.
The new legislation forbids the advertising of alcoholic products on billboards, in newspapers, magazines and on the radio. The law also prohibits advertising of non-alcoholic beer. But the legislation does offer one concession to the alcohol industry it will now be legal to advertise beer on television and in cinemas, but only in a narrow band between 11 p.m. and 6 a.m.
A great deal of harm has been done and not only to the breweries, but also to the treasury (in terms of tax revenue), said Bogna Sikorska, alcohol-market analyst at CDM Pekao. If a product is not advertised, its sales cannot grow as quickly. The sales of the largest breweries will be a particular source of concern.
According to Sikorska, the legislation hits breweries with nationwide distribution, such as Kompania Piwowarska, Żywiec and Okocim, particularly hard. Small breweries advertise less and use different forms of marketing, Sikorska said. She added that the main players in the industry would also be hammered on increased alcohol tax. The immediate impact of the law will be felt by the advertising industry, and particularly billboard firms. The stoppage of growth will also impact the budget and other industries like glass factories, printers, etc., who make a living out of the beer industry, Długosz said. Its a tragedy for the media. According to estimates from media monitoring company Expert Monitor, Polands advertising industry received some zł. 225 million ($56.2 million) to advertise beer in 2000.
The advertising restrictions will also hit smaller breweries with less-established brands. The regulations will maintain the current market trends, Długosz said. Stronger breweries will benefit from stronger brands, while smaller breweries will be pushed off the market. It will be very difficult to launch new products.
Margarethe Skov, spokeswoman for Dutch brewery Carlsberg, a majority shareholder in Okocim brewery, said the company is still uncertain of the future impact of the new legislation Were in the middle of a merger of three breweries and of course all that has to fall into place as well, Skov said.
