Grolsch defiant in Dutch beer war

By Chris Mercer

- Last updated on GMT

Related tags Grolsch Netherlands Marketing

Dutch brewer Grolsch defended its stand against supermarket price
cuts on beer in the Netherlands, despite losing market share in the
first half of 2006.

Grolsch, which reported a three per cent sales rise for the six months ended 30 June, said retailer price cuts had continued to put 'extremely high' pressure on brewers in the Netherlands.

"Grolsch has actively run counter to this trend and significantly scaled down its promotional effort in the first half of 2006. As expected, this resulted in some loss of market share,"​ the firm said.

Supermarket price wars over beer have increasingly squeezed brewers across Europe in the last few years.

In the UK, Scottish & Newcastle recently criticised top supermarkets for selling beer 'below cost'. Beer brands have also struggled in France against fierce competition from the private label sector.

Grolsch, making beer since 1615, took the unique step of briefly boycotting the Albert Heijn retailer in the Netherlands earlier this year over a pay dispute.

The brewer denied trying to influence retail beer prices. A spokesperson for Heijn, owned by supermarket giant Ahold, told​ Grolsch had asked for an extra €1 per crate of 24 beers from the retailer, and had also asked for selling prices to go up.

The move was risky, with Heijn one of Grolsch's biggest customers in the Netherlands.

But, the brewer this week defended its decision to stand tall on the Dutch beer market. It said first half volume losses had been offset by its refusal to drop selling prices, and that this had improved profit margins in the country.

Success in the group's international operations helped to bolster results. Grolsch reported double-digit growth in Canada, France, Australia and New Zealand.

The US beer market has remained sluggish this year, and Grolsch, which has just signed a partnership deal there with market leader Anheuser Busch, predicted volumes in 2006 would equal 2005.

The Dutch brewer's profits fell from €7.4m to €6.5m in the first half, although €0.7m of this involved exceptional items mostly related to the Anheuser Busch deal.

Related topics Manufacturers Beer & cider

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