PRESS RELEASE: 03.05.2006

Domestic sales by members of the Finnish Federation of the Brewing and Soft Drinks Industry 1 January - 31 March 2006

Beer sales in the first months of the year muted, cider and long drinks popular

Members of the Finnish Federation of the Brewing and Soft Drinks Industry sold a total of 170.8 million litres of beverages in the first quarter, down 0.9 per cent on the corresponding period of the previous year. The hiccup was almost solely down to sales of beer, which fell by 3.1 per cent in the first quarter as the number of promotions decreased. Sales of members of the Federation of the Brewing and Soft Drinks Industry account for about 96 per cent of the Finnish beer market. More cider, long drinks and mineral waters were sold than in the previous year, but sales of soft drinks remained at the same level.

Sales of beverages, beer, cider, long drinks, soft drinks and mineral waters manufactured by breweries totalled 170.8 million litres in the first three months of the year. Beverage sales were down 0.9 per cent on the previous year. A total of 86 million litres of beer were sold, which is 2.8 million litres less than last year. However, sales of alcohol-free beer rose.

“The hiccup in beer sales was partly due to the rise in sales prices after price competition between grocery shops over medium strength beer calmed down,” estimates Timo Jaatinen, Managing Director of the Federation of the Brewing and Soft Drinks Industry. The reduction in alcohol tax carried out in 2004 focused on strong alcoholic beverages. “Alcohol consumption has indeed clearly leaned in favour of stronger drinks after the change in taxation, which cannot be looked on as a desirable trend,” says Jaatinen. “The government has decided not to put forward any changes in the level of alcohol taxation during this term. The next government should change the tax on beer by reducing the taxation ratio between mild and strong alcoholic drinks in favour of mild ones. This ratio would be in keeping with general practice in Europe, and would also be well-founded with regard to the health of the nation.”

Tax on beer in Finland is still the second highest in Europe and 6.5 times that of Estonia’s. Private imports by travellers are a continuing problem for domestic beer manufacturers, although they levelled out at ten per cent of total consumption last year due to promotions in Finland. “Hopefully, the reduction in domestic sales doesn’t mean that we will once again see figures for private imports taking an upward turn.” Last year, almost 35 million litres of beer were privately imported, mainly from Estonia and ferries. The results of a survey on private imports carried out by TNS Gallup during the spring season will not be available until the summer.

Trends in sales of cider and long drinks were favourable. During the first quarter, sales of cider from breweries to shops and restaurants totalled 7.6 million litres. Long drink sales rose to 5.2 million litres. This growth in long drink sales mainly came from the stronger drinks sold only at Alko.

Sales of soft drinks remained at about the level of the previous year and amounted to 58.7 million litres. The share of soft drink sales accounted for by light drinks rose by 4.5 per cent on the previous year to almost 33.8 per cent. A total of 13.3 million litres of mineral waters were sold during the first three months of the year, representing an increase of 3.6 per cent.

DOMESTIC SALES JANUARY - MARCH 2006