Denmark's other breweries: to survive a consolidating market, Denmark's regional brewers merged into the "Bryggerigruppen"

Modern Brewery Age,  March 31, 2003  by Gregg Glaser

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Carlsberg may be the overwhelming, and in many cases, intimidating, giant in Danish brewing (a 70 percent market share will do that), but it does have one strong competitor in both the home market and the nearby Swedish and Norwegian markets. Bryggerigruppen A/S is a consolidation of five Danish breweries all (except one) founded in the 1800s. Together, they have become powerful enough to command 20 percent of all Danish beer sales.

Bryggerigruppen's Danish Breweries

The five Danish members of Bryggerigruppen are: Albani (founded in 1859 on the central island of Funen); Ceres (founded in 1856 on the Jutland peninsula); Faxe (founded in 1901 on the main island of Sealand); Maribo (founded in 1895 on the small island of Lolland) and Thor (founded in 1856 in Jutland and due to shut down in late 2003).

Ceres and Thor merged in 1976, forming the Jyske Brewery. This company then merged in 1999 with Faxe, forming the Faxe-Jyske Brewery. In 1992, the company name was changed to Bryggerigruppen (Brewery Group). Albani and Maribo joined in 2000. (Albani acquired Maribo in 1997.)

International Additions

The Lithuanian brewery Taurus was added to Bryggerigruppen in 1999 when 95 percent of that brewery's stock was purchased. A second Lithuanian brewery, Kanapolis, was acquired in 2001. Taurus, founded in 1860 in Vilnius, is the fourth largest brewery in Lithuania. Kanapolis, founded in a small town north of Vilnius, is the country's third largest brewery.

International Cooperation

Bryggerigruppen owns a number of subsidiaries throughout Europe, primarily for distribution of its products in various markets, and has associations with other European distribution companies. A major development in international co-operation took place in the late 1990s when Bryggerigruppen allied itself with the number two breweries in Sweden and Norway.

According to Niels Buchwald, Director of R&D for Bryggerigruppen, this international cooperation was essential for Bryggerigruppen's survival: "With the huge grocery chains growing ever larger, brewers must grow likewise and stand firm. Our agreements with Swedish and Norwegian breweries are necessary for bargaining leverage."

To date, there are no cross-country beer sales or cross ownership or stock trades between Bryggerigruppen and its Swedish and Norwegian partners, but Buchwald doesn't rule this out for the future, when a much larger brewery could be formed.

Bryggerigruppen's partner in Sweden is Spendrup, the number two brewery in that country. In Norway, the partners are the Hansa and Borg breweries, which themselves had merged earlier to become the second largest brewery in Norway. Interestingly, the number one brewery in Sweden, Pripps, and the number one brewery in Norway, Ringes, are both owned by Carlsberg. It seems that almost everywhere Bryggerigruppen turns, it is again up against Carlsberg. (In Lithuania, the number one brewer is Baltic Beverages Holdings, BBH, which is 50 percent owned by Carlsberg.)

Back in Denmark...

FAXE--Faxe is the only brewery in Bryggerigruppen with brands sold nationally throughout Denmark, concentrating on sales of its flagship, Faxe Pils, a 4.6 percent lager made with 1020 percent maize grits. For something a bit heartier, Faxe produces Fruhlingsbock (Season's Bock), a 7.7 percent, all-malt lager. Even though Faxe beers can be found throughout the country, the bulk of its sales are in eastern Denmark Faxe is also strong in the German, U.K. and Swedish markets. The brewery produces about 852,000 barrels yearly.

CERES--Ceres, the number two brewery in Bryggerigruppen, brews the same yearly quantity of beer as Faze, but concentrates on its Ceres Royal line, sold extensively (50 percent market share) on the German side of the Danish-German border and in Italy, a huge Ceres market. (Ceres is sold in 300,000 of 340,000 Italian beer outlets.) Many of the beers in the Ceres Royal Selection are 6.5 percent to 7.7 percent lagers, such as Ceres Red Erik and Ceres Royal Stout.

When founded in 1856 in the Jutland city of Arhus (now the second largest city in Denmark), Ceres was the first Danish brewery to be built outside the walls of the city in which it was located. Before this time, it was thought that all essential industries (and beer was always an essential industry in Europe) must be located within the city walls for protection from enemies that would surround a city and destroy everything outside the walls. But in 1807, when the Duke of Wellington destroyed Copenhagen with bombardment by his ships from the sea, thinking changed about where industries must be located.

The Ceres brewery was built into the side of a hill so that lagering cellars could be dug, and ice from a nearby lake was brought in to keep the beer cool. Ceres still stands on its original location. A new brewhouse was built in 1996, with an annual capacity of 2.13 million barrels. "That takes care of the near future," said Buchwald." Surplus vapor from the brewery is used to heat 500 nearby houses. Seventy-five percent of Ceres production is exported (much of this to Italy), and this accounts for 50 percent of Bryggerigtuppen's exports. Overall, Bryggerigruppen exports 85 percent of its beers to 65 countries around the world.