Thirsty Monk dry, Golden Pheasant flies

Two of the biggest Slovak breweries, Šariš and Zlatý Bažant, moved in opposite directions in terms of production, exports and profit over the last year. While Šariš's production dipped 5.3 percent, Zlatý Bažant's production soared by 51. This year, the clash of the Slovak beer titans should rage on, as Zlatý Bažant wants to continue its bubbling trend and Šariš aims to hop back on the right track.
It will also be a furious duel of world beer giants, since Šariš is 98 percent owned by South African Breweries, Ltd. (SAB), and Zlatý Bažant is 66-percent owned by Dutch Heineken, ranked respectively number five and two in the world in production volume.


Thirsty Monk, the Šariš brewery's mascot, gets ready to fight for a fat beer market share.
Vladimír Hák

Two of the biggest Slovak breweries, Šariš and Zlatý Bažant, moved in opposite directions in terms of production, exports and profit over the last year. While Šariš's production dipped 5.3 percent, Zlatý Bažant's production soared by 51. This year, the clash of the Slovak beer titans should rage on, as Zlatý Bažant wants to continue its bubbling trend and Šariš aims to hop back on the right track.

It will also be a furious duel of world beer giants, since Šariš is 98 percent owned by South African Breweries, Ltd. (SAB), and Zlatý Bažant is 66-percent owned by Dutch Heineken, ranked respectively number five and two in the world in production volume.

Monk thirsty

Šariš announced on February 17 its 1997 production fell to 696,000 hectoliters from 735,000 hl in 1996. Bohumil Mazák, a member of the company's board, said the drop was mainly due to changes in Šariš's ownership and its brewing modernization program.

Last September, SAB bought a 97.6 percent stake in Šariš with an initial investment of about $38 million from the previous majority owner, Austria's Getränke Industrieholding (GIH), a subsidiary of Vienna's largest brewery, Ottakringer.

Despite the drop, the brewery sold 695,000 hectoliters of beer on the domestic market, beating the second-place Zlatý Bažant with 630,000 hectoliters, according to the Slovak Beer Producers' Association.

However, Mazák said that Šariš plans to boost production slightly in 1998 to around 725,000 hectoliters. "We think the plan has been set quite realistically, as the Slovak market currently seems saturated," Mazák said.

SAB has already launched a long-term investment program to modernize all Šariš's facilities. "The completion of changes in our equipment and technology is scheduled to take years," Mazák said, adding that changes to the brewery's bottling line were already underway. The brewery's biggest revenue earner is the Šaris brand followed by Smädný Mních (Thirsty Monk). Together, they secure most of the brewery's market share of between 16 and 17 percent.

Pheasant takes off

Just like the pheasant takes off in a Heineken-trademark, yellow-and-gold TV commercial for Zlatý Bažant, the brewery's production took flight last year, soaring by 51 percent and securing a 16.2 percent Slovak market share. On February 16, company officials announced that Zlatý Bažant's production was 712,600 hectoliters, way up from 471,798 hectoliters in 1996.

Martin Porada, the brewery's marketing manager, conceded that his brewery is shoulder-to-shoulder with Šariš in terms of market share, but added that the tables turned last August, when Zlatý Bažant first beat Šariš in monthly sales. "We have been the market leader since August 1997 and our volume of sales has increased [even more] dramatically since the beginning of last January," Porada said. "We made a lot of improvements in terms of quality, packaging, marketing support...and a huge advertising campaign."

Dutch people often joke that Heineken's advertising campaigns, especially TV commercials, are better than its beer. But in case of Zlatý Bažant, the campaigns seem to be backed by quality, as the brewery exported 56,794 hectoliters last year, a 46-percent increase over 1996.

Apart from its own beers, the company also brews Heineken's Amstel brand under license, but no figures on the amount of Amstel sold in Slovakia are yet available.

The two giants seem determined to continue their battle over Slovakia's insatiable beer market. Heineken acquired another Slovak asset last December, buying 49 percent of the country's fifth largest brewer, Karšay. Combined, Heineken's two acquisitions have at least a 20 percent share on the domestic beer market.

But SAB is not giving up. "We're focusing mainly on the domestic market," Mazák said, adding that the company indirectly exports only two to three percent of its production, mostly to the Ukraine.

Heavy investment should help SAB to sustain the run for Slovak beer leadership. Present also in Hungary, Poland and Romania, SAB is the biggest investor in beer production in central and eastern Europe, with total investments approaching $250 million.

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