Post date: 03/18/2011 - 09:20
Carlsberg kills oldest brewey in LithuaniaŠvyturys Brewery owned by Carlsberg is the oldest operating brewery in Lithuania, which offers the products of exceptional quality. The production volumes of the brewery have been on the increase during the last 15 years. At the same time, the profit of the company, be it Švyturys UAB or Švyturys-Utenos alus UAB, has steadily increased as well.
Type: Forum topic
Švyturys Brewery owned by Carlsberg is the oldest operating brewery in Lithuania, which offers the products of exceptional quality. The production volumes of the brewery have been on the increase during the last 15 years. At the same time, the profit of the company, be it Švyturys UAB or Švyturys-Utenos alus UAB, has steadily increased as well.
Unfortunately, that cannot be said of the last 3 years. As soon as the decision was made to transfer a part of production to Utena Brewery, the financial performance of the company deteriorated. An obvious tendency of the decrease in the company’s earnings proportionate to the volume of the transferred production can be observed.
Today, the profit is twice as low compared to the profit 3 years ago; Švyturys Brewery also shows a slump in production by two times. We may try to explain that by the ongoing economic crisis in Lithuania but this motive does not apply in our case because other large breweries have managed to increase their profits. For instance, the profit of “Kalnapilio-Tauro grupė“ boosted by 1.9 times, the profit of “Ragutis“ soared by 58%. We can also make a flashback into the crisis of 2000. The profits of certain breweries decreased, while Švyturys showed upward tendencies. The fall in the company’s sales in the segment of cheaper beer, i.e. the type of beer the production of which was terminated in Klaipėda, while the sales in premium beer segment remain unchanged, also makes a strong argument.
Of course, beer production in Utena may be cheaper, but time has shown that consumers are prone to choose quality. The subsequent saving at the expense of quality will lead to the inevitable loss of the leading positions in the market. Such a policy impairs the high standing of Carlsberg group in Lithuania. The destruction of the oldest and most well-known brewery in Lithuania also contributes to that process. Modest calculations show that Švyturys-Utenos alus have failed to make the profit amounting to LTL 100 million within the last three years. That makes an obvious breach of the shareholders’ interests.
In trade union point of view, if production was returned to “Švyturys“ brewery in Klaipėda the company would retain its market positions, which it is about to lose. That would also return consumer confidence in the products, ensure employee occupation and bring back consumer loyalty.