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PRESS RELEASE: 19.01.2006

Domestic sales by the members of the Federation of the Brewing and Soft Drinks Industry in 2005

Growth in beer sales wanes as retailers price competition settles down

The member companies of the Federation of the Brewing and Soft Drinks Industry sold a total of 825.8 million litres of beer, cider, long drinks, soft drinks and mineral waters in Finland in 2005. The overall figure is five million litres, or 0.6%, higher than last year’s figure. As reduced-price campaigning calmed down, the growth in beer consumption followed suit. Beer sales in Finland grew by only 1.8%, compared to 3.5% growth a year earlier. The sales of long drinks and mineral waters also increased, while the overall sales of soft drinks and ciders fell slightly. Sugar-free soft drinks sales, however, topped the 30 per cent mark for the first time, amounting to a record 30.5% of soft drinks sales.

The rapid growth in beer sales caused by tax cuts and retailers’ price competition is beginning to even out. A total of 425 million litres of beer was sold in Finland in 2005, an increase of 1.8 per cent over the previous year. In 2004, beer sales increased by 3.5 per cent as retailers used beer as a loss leader. The moderate rise in the price of beer in 2005 has clearly slowed growth in consumption, states Timo Jaatinen, Director of the Federation of the Brewing and Soft Drinks Industry.

Restricting advertising would increase price competition and consumption
According to Jaatinen, the Finnish beer market is settling after a turbulent two-year period. After intense reduced-price campaigns and competition on price, Finnish brands are showing signs of strengthening once again. Competition in the price of beer can pick up again, however, if the Ministry of Social Affairs and Health’s proposals on restricting brand advertising for mild alcoholic drinks are approved. This would leave price as the only means of competition, leading to an increase in consumption, stresses Jaatinen.

A total of 272.9 million litres of soft drinks was sold in Finland in 2005, down by 0.7% on the previous year. The sales of sugar-free soft drinks, however, grew by 8.5%, with their share of overall sales topping the 30 per cent mark for the first time (30.5%).

The Federation of the Brewing and Soft Drinks Industry’s member companies sold a total of 39.5 million litres of cider, 2.4 million litres less than a year ago. Reasons for the drop included the competition in the price and subsequent rise in the consumption of beer as well as the growing popularity of retailers’ own brands.

A total of 24.7 million litres of long drinks was sold last year, 1.3 million litres more than the previous year. The sales of mineral waters grew by 0.8% to 63.2 million litres.

DOMESTIC SALES 2005

Beverage
 2005
mill. l
 2004
mill. l
 Change
mill. l
 Change
%
Beer
 425.5
 417.9
 7.6
 1.8
Cider
 39.5
 41.9
 -2.4
 -5.9
Long drink
 24.7
 23.4
 1.3
 5.7
Soft drink
 272.9
 274.9
 -2.0
 -0.7
Mineral water
 63.2
 62.7
 0.5
 0.8
Total sales
 825.8
 820.9
 4.9
 0.6

Source: Member companies of the Federation of the Brewing and Soft Drinks Industry. The statistics do not include sales by actors outside the Federation, nor private imports of brewery products, which are not statistically recorded.

Additional information:
Managing Director Timo Jaatinen, tel. +358 (0)9 1488 7407, GSM +358 40 837 6794
Communications Manager Katri Tuulensuu, tel. +358 9 1488 7601, GSM +358 40 777 1938

The Federation of the Brewing and Soft Drinks Industry promotes the interests of producers of beer, cider, long drinks, soft drinks and mineral waters in Finland. Its members are Oy Hartwall Ab, Nokian Panimo Oy, Olvi Oyj and Oy Sinebrychoff Ab. The Federation of the Brewing and Soft Drinks Industry operates in connection with the Finnish Food and Drink Industries Federation and is among the four largest industries in the food and drink branch in terms of the value of production.

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