E-Malt.com News article: 2253

The Finnish brewer and soft drink producer Olvi plc, part of the Olvi Group, said on February 26 that its 2003 total sales amounted to 97 million litres, which was 4.9% less than a year earlier (102 million litres). The decrease in Olvi’s total sales was mainly due to the company’s choice of not engaging in price competition in the domestic soft drinks market.

Among its three main product groups, Olvi increased its market share in beers to 12.8 (12.5) percent. Olvi’s market share of beers sold in retail outlets increased to 13.9% (13.2%) and in state-owned Alko alcohol outlets to 21.9% (21.6%).

The Estonian AS Tartu Õlletehas increased its total sales by 9.1percent in 2003, from 55.9 million litres to 61.0 million litres. AS Tartu Õlletehas is the largest seller of beverages in Estonia if all the product groups are taken into account; this includes beers, long drinks, ciders, soft drinks and mineral waters. AS Tartu Õlletehas’s beer sales decreased by 4.2 percent, from 35.7 million litres to 34.2 million litres. The market share of the company’s beers decreased by 3.5 percentage points to 35.9 percent in 2003 when comparing the Estonian manufacturers. During the summer season, AS Tartu Õlletehas’s beer production capacity was fully utilised. AS Tartu Õlletehas’s exports amounted to 6.6 million litres. Latvia and Lithuania accounted for the majority of the company`s exports, some of which were directed to Finland as well.

The sales of the Latvian A/S Cesu Alus company totalled 18.7 (11.4) million litres in 2003. This represents a 64.0 percent increase on the previous year. The market share of the company’s beers was 12.8 (7.8) percent in 2003. During the year 2003, the company has established its position as the second largest seller of beer in the Latvian market. During the summer months, the brewery’s beer production capacity was fully utilised. A/S Cesu Alus also produces and sells soft drinks, ciders and long drink products, which accounted for 14.0% (10.5%) of the company’s total sales in 2003.

The sales of the Lithuanian AB Ragutis company totalled 24.7 (23.6) million litres in 2003. This represents a 4.7 percent increase on the previous year. The market share of the company’s beers was 9.5 (8.0) percent in 2003. During the summer months, the brewery’s beer production capacity was fully utilised. The company is the Lithuanian market leader in ciders with a market share of 44.0 (47.7) percent. Ciders and long drinks made up 6.4 (3.9) percent of the company’s total sales in 2003. AB Ragutis is the fourth largest company in the Lithuanian brewing industry.

The Olvi Group’s net sales for 2003 totalled 114.6 million euro. This was 4.4 million euro, or 4.0 percent, more than a year earlier. The parent company Olvi plc’s net sales were down 1.3 percent at 70.3 million euro. The aggregate net sales of the subsidiaries in the Baltic states amounted to 47.7 million euro in 2003. This represents an increase of 5.1 million euro or 12.0 percent.

AS Tartu Õlletehas’s net sales amounted to 26.6 million euro, representing an increase of 0.6 million euro or 2.3 percent. A/S Cesu Alus’s net sales totalled 7.4 million euro, which was 1.9 million euro, or 34.5 percent, more than in 2002. At 11.8 million euro, AB Ragutis’s net sales in 2003 were 0.6 million euro, or 5.4 percent, higher than in 2002.

Olvi plc’s exports grew by 14.9 percent to 8.5 million euro in 2003. The Group’s internal exports accounted for 3.4 (2.4) million euro of the total. The net sales generated by the exports of the Olvi Group as a whole totalled 5.1 (5.1) million euro in 2003. Exports of the parent company Olvi plc accounted for 93.3 percent of the total. Exports accounted for 4.5 percent of Group net sales.

In a statement, the company said that as of 1 May 2004, Markku Rönkkö, the managing director of Olvi plc, will be stepping down, to take up the position of managing director at Atro Oyj, which is a consolidated group in the energy sector based in Kuopio. The board said it had initiated the process for selecting a new managing director in the end of January 2004.

Looking forward the company said the Olvi Group’s earnings depend on the volume and price developments of the overall markets in Finland as well as in the Baltic states.

“The year 2004 will bring substantial changes to the Finnish brewing industry’s operating environment, and the impact on the parent company Olvi plc’s business is very difficult to estimate,” it said in a statement.

“The Baltic states, Estonia, Latvia and Lithuania, will become members of the EU as of 1 May 2004, but this is not expected to cause any immediate major changes in the Group’s business. However, the low level of alcohol duties in Estonia compared to Finland will result in substantial tourist imports of alcoholic beverages between the two countries. The Group companies have prepared for the changes in tourist imports.”


27 February, 2004