Romania: Ursus Breweries to launch alcohol-free beer

Ursus Breweries, which holds the Ursus and Timisoreana brands, is considering expanding the brand into the sector of alcohol-free beer to strengthen its product portfolio, says Dieter Schulze, chairman and CEO of Ursus Breweries, according to Ziarul Financiar, March 8.

"We believe the current portfolio has potential to be expanded, and currently we're put at a disadvantage by the lack of an alcohol-free beer product. Though we've started imports for these products from Hungary, we do not consider this to be a satisfactory long-term solution and are considering local production. In all likelihood, we intend to have a brand expansion on the segment of alcohol-free beer," says Dieter Schulze.

Ursus was the only one of the top three brewers that did not have a brand positioned in the segment of alcohol-free beer to its portfolio. The leader of the market, Brau Union, owns Schlossgold, while Interbrew, ranking third on the market, competes on this segment with alcohol-free Bergenbier. Another brand on the market is Driver, made by Martens Galati.

"Alcohol-free beer, or beer with low alcohol content, does not account for more than 2% of the market at present, but it has growth potential. This will become an important segment on the market, as is happening in other European countries," says Schulze.

The company decided to enter the segment of alcohol-free beer after the sales of Timisoreana brand doubled last year, following the launch of the PET packaging, in July. Until then, Ursus had only one brand, Ciucas, on the PET beer market, a segment that has been boasting the highest growth rate in the last three years. "There's no serious competition on the market without PET, a segment that accounted for some 40% in overall sales last year. Some 30% of Timisoreana sales were generated by the PET bottled version last year," Schulze also says.

Ursus Breweries in Q3 of the current fiscal year (October-December 2006) saw sales advance by 33% domestically, almost three times faster than the pace reported in the first six months of the financial year. During April-September 2006 period, Ursus sales rose by only 13% amid some production limitations.

Ursus finalised investments of over 30 million euros to expand the production capacity of Buzau plant last year, but decided to take expansion further through investments worth some 20m euros.

According to Schulze, the company's production capacity will hit around 4.5 million hectolitres in the wake of these investments.

Schulze did not provide any information on the company's medium-term expansion plans, but specified investments had to be finalised before the market developed.

"Last year, the market increased by over 18%, but it's hard to believe we will see similar growth this year. The market will rise by 5-7% this year. Our target is to grow above the market average", added Schulze.

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