“After losing market share to large international groups on the Romanian beer market, who now own around 90% of the market, small producers have had to find new strategies to stay in business. Collaboration with large modern retail networks that developed private labels is based on changes in consumer behavior and orientation towards price-competitive private labels,” the Competition Council said in a report analyzing the Romanian beer market.
Small beer producers, who hold less than 5% of the market, have production contracts for private labels of retailers Carrefour, Metro, Kaufland, Selgros, Billa and Mega Image.
The advantages of such partnership are higher sales volumes and stability in an economic environment affected by lack of liquidity. Production costs are also lower as logistics, distribution and sale costs are covered by the retailers that own the respective private labels.
Small producers sell their products only regionally.
The antitrust authority’s report shows the Romanian beer market is 85-90% owned by four large producers: SAB Miller – Ursus, Heineken, Molson Coors – Bergenbier and URBB – Carslberg Group. The market also has tow local producers with large production capacities: Romaqua și European Food.
Heineken and Ursus had the biggest sales on the Romanian market, 30-40% and 25-35% respectively by volume and 30-40% by value in 2012.
“Beer consumption peaked in 2008, at 20.6 million hectoliters. In 2012, beer consumption stood at around 18 million hectoliters, lower than in 2007, when consumption was at 19.5 million hectoliters,” the report noted.
Beer consumption in Romanian declined 10% in 2013, to 16.3 million hectoliters, according to the Romanian Brewers Association.
The Competition Council’s report shows 54% of the beer sold in Romania is bottled in plastic, followed by beer bottles (28%), while beer cans account for 10-15% of the market. Consumption of beer bottled in plastic indicates a preference for household consumption rather than the hospitality segment.
The Romanian market has a low consumption of draft beer, of less than 5% of total sales, unlike the European market where draft beer is traditionally consumed.
As regards sales by distribution channels, traditional retail (convenience stores) have the largest sales (52%), followed by the hospitality industry (25%), modern retail (hypermarkets and supermarkets) with 15% of the market and cash&carry retailers with 8%.
The Romanian beer market stood at EUR821 million in 2012.
Romania ranked sixth in Europe last year by beer consumption, above the EU average consumption of 70 liters.