Countries

Asia Pacific Breweries

The Asia Pacific Breweries joint venture experienced a strong year. Overall volume and profit grew and most markets contributed to this performance. APB expanded its footprint with the opening of greenfield breweries in Vientiane, Laos, and Hyderabad, India. The Tiger brand reported a strong year with volumes up 16.3 per cent growing across all its Asian markets.

The business in Indochina, which includes Vietnam, Cambodia and Laos, continued to develop strongly and remained the top contributor to APB’s profit in spite of the start-up loss in Laos. Beer volume increased 8 per cent and the Tiger and Heineken brands reported strong growth. Volume increased 10 per cent in Papua New Guinea and margins improved thanks to higher selling prices and a better sales mix. Profitability increased substantially.

In Singapore, profit increased due to higher volumes and an improvement in the sales mix. Both the Tiger and the Heineken brands grew volumes, driven by higher marketing investments and the introduction of innovations.

Conditions in the Chinese beer market remain challenging due to fierce competition, unfavourable weather conditions and margin pressure from higher input costs. In view of the decrease in value, an impairment charge was taken in relation to the investment in Kingway Brewery Holdings.

In Thailand, volume grew in an uncertain political and economic environment, but rising costs led to a lower profit, whilst the brewery in Mongolia was profitable in its first full year of operation. Volumes and profit in Malaysia grew once again.

Own operations

Multi Bintang Indonesia reported higher revenue and EBIT (beia), driven by higher volumes of its three key brands, Bintang, Guinness and Heineken. Despite strong pricing, Multi Bintang increased its market share.

Brasserie de Nouvelle Caledonie increased sales of its ‘Number One’ beer and the Heineken brand. The brand portfolio was strengthened with the introduction of Hinano, a Tahitian beer brand produced under licence. The range of soft drinks was extended with the inclusion of higher-margin drinks. Revenue and EBIT (beia) increased.

Export and licensing operations in the region Asia Pacific

In Taiwan, the Heineken brand continued its growth trajectory. The growth was particularly strong in the on-trade. Heineken® volume in South Korea, Taiwan and Australia enjoyed healthy growth.

United Breweries, India

United Breweries (UBL) is the market leader in India and sells the leading Indian beer brand Kingfisher. Heineken has a stake of 37.5 per cent in the company.

UBL continued to grow volume despite suspension of beer supply in the State of Andhra Pradesh during the summer, and the company gained share. Beer volume of United Breweries is not included in Heineken’s Group beer volume.

The decrease of the share price of United Breweries in India was a trigger for impairment testing. Because no detailed financial information is provided by UBL to Heineken, it had to reduce the book value of its investment based on the share price. In March 2008, the joint venture partners of Heineken in UBL filed legal proceedings in India against various Scottish & Newcastle, Heineken and Carlsberg entities claiming that the rights enjoyed by Scottish & Newcastle India Private Limited (the entity through which Heineken holds its investment in UBL) in a shareholders agreement relating to UBL and the Articles of Association of UBL are personal to S&N and do not survive the takeover of S&N by Sunrise Acquisitions Limited in April 2008.

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