Lapin Kulta, the flagship beer brand of Finland's Hartwall group, has taken on a new marketing and distribution partner in the important Swedish market in order to satisfy the requirements of the competition authorities in both countries.
Abro Bryggeri will take over from Carlsberg Breweries as the main importer and distributor of the Lapin Kulta brand in Sweden from 1 November 2002. Sold in Sweden since 1986, around 14 million litres of Lapin Kulta beer are imported each year, making it the leading brand in the import market with a 30 per cent share.
The brand also has a not insignificant 4 per cent share of the total beer market in Sweden, and is the seventh best-selling beer brand via the State-controlled Systembolaget retail outlets and one of the top five beer brands sold through the supermarket channel. Several variants of the beer are sold in Sweden: supermarkets sell the 2.25 and 3.5 per cent abv versions, while the Systembolaget (which is the only place where strong alcohol of any sort can be sold in Sweden) carries the 5.2 and 7 per cent abv versions.
"Lapin Kulta beer has a venerable tradition in Sweden and for years now has been the most popular imported beer. The marketing strategy of Lapin Kulta beer is very close to the Finnish marketing approach, though the beer's country of origin has not been highlighted in any way. The beer is associated with fresh and pure Lapland nature and it is considered to be a very high quality, light lager. Although the beer's target group is urban and youthful, Swedes of all ages throughout the country have made it their favourite," said Esa Rautalinko, Hartwall's marketing and export director.
Changing the distributor and marketer of such an important brand is not undertaken lightly, but in this case Hartwall had little choice. When the merger of Denmark's Carlsberg group and Norway's Orkla was announced in February 2001, the competition authorities in both Sweden and Finland imposed a number of conditions, including the cessation of certain distribution agreements between Hartwall and the two companies, including the one concerning Lapin Kulta.
The change of distribution partner is designed to ensure continued competition in the Swedish market following the Carlsberg/Orkla merger, but in any case the competitive boundaries throughout the Scandinavian beer market are frequently blurred.
The prime example of this is Baltic Beverages Holding (BBH), the joint venture company which has significant shareholdings in breweries throughout the Baltic States and parts of Central and Eastern Europe. BBV was established as a joint venture between Hartwall and Orkla, but is now owned jointly by Carlsberg and Hartwall. Since this could be a potential means of putting pressure on Hartwall, the competition authorities also ruled that Carlsberg should not use its 50 per cent stake in BBH to influence the Finnish operations of Hartwall.
They also stated that Orkla had to sell its stake in Hartwall as part of the deal, a stake which was eventually acquired by the UK's leading brewer Scottish & Newcastle. Since Abro has been a strategic partner of S&N for many years, it was the obvious choice to take on the Lapin Kulta business in Sweden.
"By changing over to a new importer we are ensuring the long-term success of Lapin Kulta beer in Sweden," commented Rautalinko. "Hartwall and Abro have joint objectives in building the Lapin Kulta beer brand and in boosting its popularity over the years ahead. Abro is a natural strategic partner for us; it has a good reputation together with well established distribution operations and sales and marketing channels. Furthermore, Lapin Kulta will strengthen Abro's product portfolio further. We're looking forward eagerly to starting co-operation."
Abro Bryggeri is Sweden's oldest family-owned brewery, and like Hartwall; produces a range of drinks including beer, soft drinks, cider and bottled water. Its total sales in 2001 reached SK700 million (€76.2m) from volumes of around 84 million litres. Its share of the Swedish beer market is estimated at around 10 per cent.