How to make muslims drink beer? by introducing the non-alcholic beer first as a
marketing strategy before the original alcoholic beer
http://www.theedgedaily.com/cms/contentPrint.jsp?id=com.tms.cms.article.Article_60ba85c5-cb73c03a-1efc2080-13caeed0paging=0
07-05-2007: Carlsberg stands steady
By Harpreet Bhal
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Carlsberg Brewery Malaysia Bhd has reaffirmed its commitment to doing
business in Malaysia and will boost its export sales amid a sobering domestic
alcoholic beverage market. From 2004 to 2006, the beer and stout market in
Malaysia saw heavy increases in duties, resulting in the country having the
second highest beer prices in the world after Norway. At the same time,
beer and stout faced stiff competition from other alcoholic products such as
wine and liquor as well as low-priced imported beer and stout. Carlsberg,
which has been operating in the country for over 35 years, felt the brunt of
the duty increases. Its net profit fell from RM95.4 million in 2002 to RM85.9
million last year. What is more alarming is that many beer and stout
customers began to switch to wine and liquor due to the low price difference
between the two types of products. The situation could get worse. But for
Carlsberg, it is staying put in Malaysia. This country is
its crown jewel, despite the fact that the local beer and stout market has
reached saturation point. Carlsbergs newly appointed managing director Soren
Holm Jensen (pic) reiterated his companys commitment to Malaysia. We
would never choose to exit the industry. But depending on the development,
there could be implications for employment or how much we can give back in tax
money and to charity. So there could be some effects if the tax increases
continue, he told The Edge FinancialDaily in an interview in Shah Alam on
Thursday. Jensen, who took charge of Carlsberg Malaysia eight weeks ago,
believes the company could ride out the challenge of a saturated market like
Malaysia by exporting more. In fact, plans are afoot to grow the companys
export volume and explore more opportunities overseas. The brewer now
exports between 15% and 20% of its total production volume to the Maldives,
Singapore and Taiwan, via Carlsberg Distributors Taiwan Ltd, in
which the company has a 50% stake. The expertise we have in this
organisation is skewed towards how to sell, distribute and market beer in Asian
society. So it would make more sense if we were to expand our international
operations, to do it in the vicinity, Jensen said. Recognising that the
high price of beer and stout in Malaysia could lead to more consumers turning
to wines and liquor, the company is bringing in more premium quality beers for
the sophisticated drinkers. These include the newly introduced Saaz Blonde
and Bramly Witt beverages which make up the companys high-end offerings under
its premium Jacobson range. Jensen said the company hoped to grow the
premium-end beer market in Malaysia by introducing more of such beverages, as
the demand for premium quality drinks increased among discerning Malaysian
customers. He also said the company did not rule out exploring
opportunities in the wine and spirits market as this segment was
growing in popularity. He declined to elaborate. Another step that the
brewer is also considering is to introduce non-alcoholic beer, which has been
successfully marketed in the Middle East. Carlsberg sells non-alcoholic
beer to the Muslim population in Saudi Arabia, Yemen, Kuwait and the United
Arab Emirates. We will constantly look at the opportunities here but brewing is
still in our hearts, he said.
For the current financial year ending Dec 31, 2007, the company expects the
local beer and stout market to stabilise as the government did not announce any
increase in duties for this year. But it still has to contend with stiff
competition and declining margins.
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