Netherlands: Grolsch, the Dutch brewing group best known for its flip-top bottle, announced on February 23 the launch of an advertising campaign in a bid to raise volumes and market share. The brewer will invest several millions of euros in an advertising campaign under the slogan: "Beer the Grolsch way." The move to increase volumes and market share follows a difficult year for Grolsch. It retained market share, but conceded it had achieved "insufficient international growth", struggling particularly in the US.

Grolsch reported an expected 27.6 % drop in net profits to 22 million euros ($29 million) on February 23. The company said it expected "above market" volume growth in its core markets in 2005, but the lack of a profit forecast sent its shares sharply lower, according to Reuters reports.

Grolsch was expected to report a net profit before exceptional items of 21.5 million euros, largely due to higher depreciation costs for a new brewery, according to the median forecast given in a Reuters poll of 11 analysts. "We are negatively surprised by the reduced dividend to 0.59 euros from 0.77 euros. Also the absence of a profit outlook for 2005 is negative," SNS Securities said in a note to investors. "Although the company expects volumes to rise, the brewer is uncertain it will be able to report a profit growth as it will increase its investments in marketing and innovation substantially," SNS said.

Grolsch's own brand volumes rose 1 % to 3.4 million hectolitres, and though volumes in the entire Dutch market fell some 2 percent, the company said it maintained its market share. Net sales rose 4.4 percent to 314.8 million euros, as an acquisition in the Netherlands and stronger volumes in Britain and key foreign markets outweighed a decline in its home market. Sales were seen at 316.8 million, according to the median forecast given in the Reuters poll.

Grolsch shares, up 3.7 % so far this year, were down 3.21 percent at 24.15 euros by 1108 GMT after earlier falling to 23.65. The DJ Stoxx European food and beverage index was 0.14 percent lower.

In response to the shrinking beer market, the brewer has marshalled help from a Dutch Oscar-winning filmmaker whose commercial to convince more people to drink beer will be aired from Thursday, February 24.

"Grolsch wants to make beer the preferred choice for social occasions again ... With this ambition, Grolsch is aiming for growth of volume and market share, competing with beers, wines and other drinks," the company said.

"The share remains relatively expensive when taking into account Grolsch's low growth prospects and the highly competitive market environment in the Netherlands," broker Petercam said in a note to investors. "Unless we see clear signs that this negative trend has come to an end, we keep our "reduce" rating," the note said.

The brewer, based in Enschede, eastern Netherlands, had forecast a 30 % drop in full year profits after a similar fall in its first-half results due to a decline in beer volumes.

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