Norway: Hansa Borg drinkers decide against REMA 1000 in beer war

Norwegian grocery chain REMA 1000 may reverse its so called new best friend strategy, which was introduced earlier this year. The strategy means a concentration on a few strong suppliers on a national basis and removing the products of regional suppliers.  In January, Rema picked Ringnes/Carlsberg as their “Best friend” in the beer and soft drinks market and delisted rivals including Hansa Borg and Mack. Carlsberg, which already controls 55% of the beer market in Norway, produces brands like Carlsberg, Ringnes, Frydenlund, Dahls, Nordlandspils and Tou, and imports the brands Guinness, Corona, Kronenbourg 1664 and Brooklyn.

Hansa Borg Bryggerier, Norway’s second largest brewing group, which operates the Hansa Brewery in Bergen, the Borgs Brrewery in Sarpsborg and the Christians Brewery in Kristiansand was the biggest loser in the game. From formerly selling 145,000 hl through REMA stores, the volume was expected to be reduced to 10,000 hl per year.

“If you want to be Rema’s best friend it means you have to lay a frighteningly large amount of money on the table. For Hansa Borg it will never be possible to be in the position of being Rema’s best friend,” Hansa Borg’s managing director Lars Andreas Midtgaard said in a press conference in January.

But the picture seems to have turned since then. Rema stores sold 860 hl less beer during the first four weeks of the year than in the same period the year before, while its competitors Extra  and Kiwi boosted  their beer sales by 2,900 and 2,090 hl respectively, as business site E24 reported. Rema CEO Ole Robert Reitan admitted last week that the delisting of regional brewers was the main cause of the lower beer sales. It looks like Reitan did not expect the high loyalty of beer drinkers to their brand and might reverse his decision soon in order to gain back the lost business.

 

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