Small and medium sized breweries, on the verge of extinction

Cristina MihalaŞcu

Traditional breweries are threatened by extinction, lately, due to the current trend of multinational breweries acquiring smaller independent brewers, one such example being the recent acquisition of "Bere" Azuga by "Ursus Breweries". "The disappearing small and medium enterprise sector is a cause for concern, and in this respect, Romania"s situation is unusual when compared to Western European countries, where there are hundreds or even thousands of such breweries", said Vifor Verşescu, the chairman of the Professional Association of Romanian Independent Breweries (PSIPBR).

According to him, investments made by multinational breweries are driving small brewers out of business. Such investments usually pay for themselves within twelve to eighteen months.

Mr. Vifor Verşescu: "A lot of times, such investments didn"t seem to have any concrete results, as they resulted in layoffs and therefore in lower social security contributions, due to lower wage taxes paid. That is to say nothing of the lower production standards, by shortening the fermentation period, the use of malt substitutes, and of various "E"".

The eight independent companies that still exist on the market, which include Martens Galaţi, and other companies from Roşiori de Vede, Satu Mare, Mărgineni-Bacău, Vălenii de Munte and Cozla-Piatra Neamţ, have posted a 10% sales drop in Q1 2009.

According to Mr. Vasile Joanta, manager of Martens Galaţi, one of the independent breweries, the output of the company he is running was almost 197,000 hectolitres in 2008.

Brewers and their professional association claim that support to help increase production and prevent independent brewers from bankruptcy has to come from the state.

"We wish for the Ministry of Finance, to agree to reimbursing some of the excises paid by breweries in 2008, because the 2008 output was below the 200,000 hectoliters limit set by the European directives, required for paying less excises", Mr. Vasile Joanta said.

The chairman of the PSIPBR, Vifor Verşescu, considers that something needs to be done quickly when it comes to banks, in order to help beer makers secure loans which would help them continue production off-season, as well as regulating supermarkets, which charge too much in storage and shelf fees.