HEINEKEN SEES HIGHER PROFITS, WIDER PENETRATION
  Dutch brewer Heineken NV said it hoped
  to maintain for a number of years a similar earnings growth to
  the 7.5 pct increase in net profit achieved in 1986, despite
  continuing investments in a reorganization program and efforts
  to extend world penetration.
      Heineken last month reported a 1986 net profit of 285 mln
  guilders, after 265 mln in 1985.
      Chairman Freddie Heineken said the company, Europe's
  leading beer producer with six pct of market share in 1986,
  said sales increased by 6.3 pct to 42.1 mln hectoliters.
      The volume increase was due mainly to a rise in the U.S.,
  Where the brand Amstel Lite saw great demand, and in Europe,
  where sales accounted for 25.5 pct of the total.
      Turnover, despite losses in guilder terms due to weaker
  foreign currencies, rose by 4.4 pct, to 6.7 billion guilders.
      Further consolidation of foreign companies, including the
  increase of its stake in leading Spanish brewery <El Aguila
  S.A.> to 51.2 pct, new ventures and modernization, particularly
  in French and Spanish interests, eroded profit margins. The
  company still planned to invest 700 mln guilders this year in
  restructuring and marketing, Heineken said.
      Heineken's Spanish activities should start yielding profit
  next year, Heineken said, adding that its French operations had
  already turned to profit after vast rationalization last year.
      Vice Chairman Gerard van Schaik said the decision by the
  European Court of Justice in Luxembourg to allow foreign beer
  into the closed West German market -- Europe's biggest beer
  market -- offered interesting possibilities for Heineken. "We
  have the beer, but distribution and sales is the important
  point," van Schaik said, adding that since the ruling Heineken
  had been inundated by German traders seeking joint ventures.
      "The question is not if we want to penetrate the German
  market, but how we are to do it," van Schaik said, adding that
  while the widely traveled Germans seemed to be developing a
  taste for foreign beer, the internal structure was very
  regionalized.
       Heineken board member Hans Coebergh, responsible for
  African operations, said he saw Africa as one of the most
  important beer growth markets in the long term.
       He said the company, present in Africa since 1932 and with
  majority stakes in six breweries and interests in 25, was
  hampered by the lack of hard currencies there.
      Africa, where beer consumption averages only nine liters
  per head per year and sales are limited by import restrictions
  and currency risks, nonetheless accounted for 6.5 pct of total
  1986 sales.
      On-site production is rendered expensive by the high price
  of imports of essential ingredients. But Heineken scientists
  have been looking at other possibilities.
      To balance the costs of imported malt, Heinken launched on
  the Nigerian market a new beer made of 50 pct sorghum, which
  had sold successfully, Coebergh said.
      Heineken is urging farmers to grow the traditional raw
  materials, but Coebergh noted that banana and palm beer were
  popular in Rwanda . "This is a possibility, but we could not
  possibly achieve the Heineken flavor," Coebergh said.
      Chairman Heineken said the company's seven year efforts to
  penetrate the Soviet market had finally resulted this week in a
  contract that relaxed some of the restrictions they faced.
      But again, a lack of hard currencies limited Heineken's
  market potential. Heineken now has seven bars in Moscow that
  are enjoying good sales, but the bars only accept western
  money.