Żywiec's competition pours it on

Net profits of Grupa Żywiec SA reached a record-high zł.333 million in 2005 - a 17-percent increase in comparison to the previous year's result of zł.284 million. The company's operating result of zł.452 million was also its best-ever. "These are record-high results for Grupa Żywiec, which proves that our strategy is the correct one," the company's president, Hans van Zon, said. But despite these successful figures, the company still has a few things to worry about.

Revenue from sales increased by only three percent and sales volume grew by only one percent to reach 10.3 million hectoliters - well below the market's growth of five percent. In comparison, Żywiec's biggest rival, Kompania Piwowarska, increased sales by 12.6 percent last year, while the third player on the market, Carlsberg Polska, experienced a seven-percent growth in sales.

"The strong-beer segment shrank last year, and this is an important sector for Grupa Żywiec," said van Zon, adding: "Secondly, our management board decided to streamline our product portfolio, which resulted in the removal of some brands from the market and in the short term will mean less volume." However, he stressed that in the long run this strategy would have a positive effect on the company. "We treat this as a point of departure for the future," the president explained.

Meanwhile, market leader Kompania Piwowarska (KP) increased its market-share lead over Żywiec to 3.8 percentage points. KP had a 37.1-percent share of the market at the end of 2005, with Żywiec claiming 33.3 percent. KP sold 11.2 million hectoliters of beer last year.

Third-ranked Carslberg Polska had an impressive 2005, increasing sales by seven percent and revenue from sales grew by eight percent to reach zł.845 million. The company's profit jumped from zł.5 million in 2004 to zł.65 million last year.

"Last year we invested in six new brands and so we acquired customers who so far have not drunk beer or did so occasionally," Carlsberg Polska's president, Marcin Piróg, said. The company spent zł.100 million on investments, and plans to increase the sum to zł.150 million this year. Carlsberg plans to win at least one additional percent of the market each year. "By 2011 we want to have around a 20-percent share of the market," Piróg announced. Currently, Carlsberg claims 14 percent of the market.