Hungary: Beer industry closes difficult year in 2004

Hungarian beer manufacturers closed a difficult year in 2004, according to the Hungarian Association of Beer Manufacturers (MSSZ). The MSSZ's four member companies, which dominate the Hungarian beer sector, saw their sales decline by 11% to 6.48 million hectoliters in 2004, following a 1% decline in 2003, Interfax Information Services reported. However, MSSZ president Elemer Kiss, a former head of the Prime Minister's Office, noted that sales in May-June this year already show a small upturn compared to the same period last year.

In 2004, standard brands accounted for 77% of beer sold, up from 75% in 2003, while the share of premium brands dropped two points to 20%, with specialty brands making up the remaining 3%. Alcohol-free beer sales totaled 179,000 hectoliters, down from 227,000 hectoliters in 2003 and breaking five straight years of growth.

By packaging, there was a marked increase in sales of canned beer, up from 23% to 35% of total volume, with a corresponding decline to 50% in the share of bottled beer. Keg sales amounted to a stable 14% of total sales.

Beer imports more than doubled in 2004 compared to the previous year, to 965,000 hectoliters. Of this, 36% was imported by MSSZ member companies, and the rest by independent importers, mainly that of lower-priced canned beer. Meanwhile, Hungary's beer exports remained minimal, rising from 49,000 to 60,000 hectoliters last year.

Kiss noted that 2004 was the "most tax-burdened year" to date for Hungary's beer manufacturers, following an excise tax increase at the beginning of the year, as a result of which the average tax content of beer has now reached 40%. Total tax contributions by Hungary's beer manufacturers were down HUF 12 billion to just over HUF 50 billion last year, including an unchanged HUF 28 billion in excise tax payments despite falling sales volumes.

The industry's difficulties were also reflected in wage and employment data, MSSZ figures indicate. The number of persons employed by Hungary's beer brewers fell by 12% to 2460, while gross wages remained essentially unchanged at HUF 205,000 per month on average - while this was higher than the nationwide private sector average of HUF 139,000, wage growth rates in the beer industry fell short of the national average.

The four member companies of the MSSZ are Borsodi Sorgyar, owned by the world's largest brewery Inbev; Dreher Sorgyarak, a subsidiary of SABMiller; Brau Union Hungaria, now part of the Heineken group; and Pecsi Sorfozde Rt, owned by the Austrian Ottakinger group.

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