Beer market can grow further, study finds

Greece’s beer market has room to grow but prospects must take into account the fact that local consumption patterns are different from other countries’, the Foundation for Economic and Industrial Research (IOBE) says in a sectoral study. In the 1996-2001 period, beer consumption in Greece grew at an average annual rate of about 3 percent, from 384 million liters to 438 million. Consumption per head reached 39 liters, compared to an average of 80.4 liters in the whole of the European Union, where it declined by an average annual rate of 0.6 percent. The study concludes that the most important factors affecting domestic beer demand are its seasonal nature (the April-September period accounts for 75-78 percent of it), price, the state of the tourism industry, advertising and the consumption habits of Greek households. A significant «threat» to beer in recent years has emerged in the form of the so-called ready-to-drink alcoholic beverages, which include original spirit brands, besides that of indirect rivals such as refreshments, fruit juices and mineral water. The Greek beer-manufacturing sector in 2001 consisted of seven factories employing 1,800 people, which represents 1.7 percent of the sector’s work force in the European Union. The structure of the domestic beer market is oligopolistic, the leader being Athenian Breweries, which during the period in question controlled market shares of around 90 percent. Over 2000-2001, however, this share declined by 5.18 percent, to the benefit of the second largest brewer, Mythos of the Boutaris group, which went on to almost double its market share to 10 percent in the following season. The industry also includes Hellenic Breweries Atalanti (3.68 percent), Macedonia-Thrace Breweries and Olympic Breweries. On the whole, the sector’s financial position during the 1998-2001 period is considered positive, although the net profit margin fell from 21.16 to 14.59 percent and the return on equity was trimmed from 60.29 percent to 33.21 percent. The gross profit margin remained stable at just over 45 percent. According to the IOBE study, internal competition is quite strong but competitive pressures from the entry of new players into the sector are weak. Greek consumers maintain a guarded attitude to new beer brands; 90 percent of sales are accounted for by three brands – Heineken, Amstel and Mythos – while about 160 imported brands total about 5-6 percent.