ECONOMY

Trouble brewing between soft drink and beer producers

A war is very likely to break out within the next few months between breweries and companies that produce non-alcoholic beverages, as Parliament recently passed legislation according to which breweries are now allowed to process and bottle non-alcoholic drinks and water on the same production lines they use to process and bottle beer.

For the time being, the Association of Greek Soft Drink Industries (SEVA) is being reserved in its reaction to the change, though some of its members say the addendum to the law governing the sector is worded in such a way as to favor the interests not just of small breweries, but also to facilitate the collaboration between two multinational companies in Greece, one active in beer brewing and the other in soft-drink production.

It is worth noting that the new regulation was presented as an addendum to existing legislation rather than an amendment by the Development Ministry in order to improve the business environment in the sector.

?Before it was passed, the legislation was presented as being in response to demand from small breweries. But they were nothing more than an excuse,? the head of a Greek soft-drink company that has seen an upswing in the past few years, told Kathimerini, while asking not to be named.

According to a number of industry sources, for some time now there have been rather loud rumors suggesting that a collaboration is in the offing between multinational brewer Carlsberg and soft-drink giant Pepsico for the former to bottle the latter?s brands in Greece as well as in other countries, such as Sweden.

Carlsberg already has a factory in Greece, in Sindos on the outskirts of Thessaloniki, where it has three production lines and puts out the local Mythos brand of beer. Pepsico, which has acquired local soft-drink maker and bottler Ivi, has two factories, one in Oinofyta outside Athens, where it makes soft drinks and fruit drinks, and another in Loutraki near Corinth, where it bottles mineral water.

Irrespective of whether or not Carlsberg and Pepsico move ahead with the rumored deal, the new regulation will favor small breweries that want to expand their product range.

The Macedonian-Thrace Brewery, which produces Vergina beer and is owned by Dimitris Politopoulos, wants to introduce its own brand of iced mountain tea, while Chitos, which is already active in bottling mineral water and producing beer through its participation in the Olympic Brewery, reviver of the Fix beer label, is also interested in producing soft drinks.

It?s worth noting that Greece already has a small regional brewer that also produces soft drinks in Rhodes-based Magnus Magister.

?What we would like to see is at least equal treatment. We want to see the reverse also being the case, whereby companies producing soft drinks can also use the same lines for producing beer,? a spokesperson for SEVA said, adding that it is not unlikely the issue will return to the table after the general elections expected in early May, given that the New Democracy MP who introduced the legislation, Costis Hadzidakis, expressed some reservations as to whether it was the best possible, while an MP for PASOK, Costas Kartalis, asked that the legislation cover both brewers and soft-drink producers.

The fact that the issue is most likely not closed yet is also why SEVA has been reserved in its reaction to the legislation despite calls from some its members for a formal complaint to be lodged with the Development Ministry.