Poland: Changes in Kompania Piwowarska’s distribution system

As of April 1 (beginning of the fiscal year), Kompania Piwowarska is planning to introduce changes to the existing distribution system for the traditional market, the company announced on March 21.

The new strategy will implement the concept of the “Business Partner of Choice” through building long-term relations with strategic business partners of Kompania Piwowarska. The distribution model will continue to be based on supplies delivered through wholesalers. This is an optimal solution for the Polish market from the point of view of the clients and also to assure product availability to customers.

The proposed changes are to contribute to improved profitability of both Kompania Piwowarska, the beer market leader (with a 38.3% market share in Q4 2005) and its business partners by reinforcing the existing business model through reciprocal support of both parties.

KP has decided to support its business partners both technically and financially. Wholesalers will be able to benefit from rebates formerly available only to Kompania Piwowarska for the purchase of fixed assets. There will also be joint promotional and sales activities carried out in points of sale. KP will also support its partners by running central and regional support programs for individual brands. As part of the trade agreements it is possible for the distributor and KP to jointly invest in a common business up to a value set forward in the agreement.

Additionally, KP is planning to create a comprehensive knowledge management and transfer program by establishing a professional platform for the exchange of CRM information, business training and a series of business conferences presenting the best business practices of SABMiller.

„Nevertheless, the biggest benefit for a distributor who decides to cooperate with KP is the opportunity to build sales using our strong brands which receive marketing support. Our company’s philosophy is to provide the best quality beer to our consumers. We offer eight very powerful brands, including the Polish consumers’ beer of choice, which has received numerous prestigious international award: Tyskie” comments Tomasz Blawat, Vice President of Sales & Distribution, Kompania Piwowarska.

Kompania Piwowarska’s new distribution policy also assumes strong involvement of business partners in the creation of a consistent sales and market information system, which will provide insight into the changing requirements of Polish beer enthusiasts. That is why this year, Kompania Piwowarska would like to receive information regarding the volume of KP beer sales to individual retail outlets in comparison with the entire category’s sales to those outlets.

„The purpose of this activity is always the desire to adjust our offering to increase our competitive advantage on the market. With this information on hand we can be more effective in building our common business using appropriate promotional and marketing activities. Better allocation of this support will enable us to compete more effective and better respond to consumer needs - said Tomasz Blawat. - This is not a precedence on the Polish market. Most international companies operating in Poland already use this method - he added.

Similarly to the previous years, distributors will support the trade policy for the retail points and the supply chain.

All wholesalers cooperating with KP have been offered conditions based on the same set of rules. In practice this means that former cooperating conditions will cease to bind when new conditions are introduced and changed with respect to all trade partners. This is a consequence of KP’s policy of equal treatment of all trade partners.

To date almost 80% of business partners (over 400) signed the new contracts proposed by KP. The remaining 20% have been offered time to make the decision until the end of the month.

„We are aware that some of the new provisions of the contract may seem unclear. That is why we are in ongoing dialog with distributors. Every KP employee responsible for customer relations is in ongoing contact with distributors in individual regions. In order to achieve common understanding we met yesterday with the representatives of the Association of Beer and Beverage Wholesalers (SHPiN) comprising over 100 wholesalers out of the 1200 beer distributing companies operating in Poland. During the meeting we presented our point of view and learned about the Association’s opinion. Such meetings are very helpful in clearing up any doubts and finding common solutions,” explains Tomasz Blawat.

According to an independent study carried out by PENTOR, Kompania Piwowarska is considered the unquestionable leader in customer service quality among all beer companies in Poland. Our company is the leader in general customer satisfaction rankings which means that also distributors, retail chains, traditional stores and catering outlets consider us the best business partner in Poland.

Kompania Piwowarska – general information

Kompania Piwowarska SA is a leader on the Polish beer market. Several hundred years of experience in brewing, adherence to strict international standards and advanced technologies assure top quality of our refined beers. Kompania Piwowarska's brands include beers most popular with Polish consumers: TYSKIE, the largest beer brand in Poland, LECH, Dębowe Mocne, Żubr, Miller Genuine Draft, Pilsner Urquell, REDD’s and Dog in the Fog.

Kompania Piwowarska was created in 1999 from the merger of Tyskie Browary Książęce and Lech Browary Wielkopolski. Browar Dojlidy joined the company in 2003. Today to the company is the largest and most advanced business in the beer industry, with a market share of over 38,5%*. In the fiscal year ended March 31, 2005, Kompania Piwowarska achieved a net profit of PLN 481 m, generating sales valued at over PLN 3.3 b

Kompania Piwowarska is part of SABMiller plc – one of the world's largest brewers with brewing interests or distribution agreements in over 60 countries across five continents.

* based on GUS statistics in the third quarter ended on 30 September 2005

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