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Vol 2, No 22
5 June 2000
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Photo Credit: Emil-Nicolaie Perhinschi Battle of the Brews
Brian J Požun

Beer sales are down in Slovenia and across Europe, but Pivovarna Laško and Pivovarna Union are still battling in the market and on the playing field to become the country's biggest brewers.

The Slovenes have a centuries-old tradition of brewing beer, even if it's not as old as that of their northern cousins the Czechs. A legend about a great flood still exists from the Slovene pagan era. The story says four men survived the flood, though the fates of three of them was unknown. The fourth was saved by climbing a vine on a hill and touching the sky.

The pagan deity, Kurent, a figure akin to the Greek God of Wine and Decadence, Dionysius, saw what was happening. That the man was trying to save himself using a plant associated with Kurent impressed the god so much so that he stopped the flood. Kurent made the man promise that he and his descendants would continue to grow two plants associated with the god: the grape (to make wine) and buckwheat (to make beer). The significance Slovenes continue to place on alcohol is evident from the very title of the national anthem, the Toast.

The big two

One of the oldest and most prominent Slovene breweries is Pivovarna Laško, founded in 1825. Pivovarna Laško started out brewing low-tech Carinthian stone beer, but today boasts a full range of products, from dark and light beers to non-alcoholic products including iced tea and bottled water. Their most popular beverage is the light beer Zlatorog.

Photo: Pat FitzPatrick with MAMAThe other big name on the Slovene beer scene is Pivovarna Union. Based in Ljubljana and drawing on the city's 400-year beer-making tradition, Pivovarna Union was founded in 1864. Union also produces a full range of products, including beers, soft drinks and bottled water.

The two had been competitors since the turn of the century, but in 1924 the rivalry took what looked like a decisive turn in favor of Pivovarna Union. Union gained a controlling interest in Pivovarna Laško in a secret deal and closed the Laško brewery three years later. In 1929, the idea to recreate Pivovarna Laško was born, but it was not until 1938 that the new brewery was finally opened. Pivovarna Laško has held the upper hand in the rivalry ever since and now controls 53 percent of the domestic market, leaving Union to share 44 percent with all of the other breweries in the country.

Beer and the Slovene market

Despite the strong beer tradition, the Slovene market has not been treating its breweries well in the past few years. Both Pivovarna Laško and Pivovarna Union produced more than one million hectolitres of beer last year, but sales have been steadily falling for several years following a general European trend. Across Slovenia, there was a general six percent fall in beer sales in 1997.

Domestic breweries are also facing stiff competition from foreign products. Pivovarna Laško recorded a ten percent drop from 1998 to 1999, and while Pivovarna Union's sales did not fall considerably, there was absolutely no increase. Both breweries have diverse product lines which include non-alcoholic beverages, and this is to their benefit as the market is much better for such products.

Pivovarna Laško's beer sales have grown from 50,000 hl in 1960 to more than 1,000,000 hl in 1999. This represents a jump from 25 percent of the Slovene market to 53 percent, making it Slovenia's leading brewery. Sales in 1999 amounted to some SIT 15.79 billion (nearly USD 80 million), a one percent increase over 1998. Pivovarna Laško recorded its export sales at 24 percent in 1999, up from 1998's 22 percent and 1997's 19 percent.

In 1999, Pivovarna Union produced about 1,300,000 hl of all of its products, of which 72 percent was beer. The share of the domestic market of all breweries except Laško is 44 percent, which includes Union.

In an effort to strengthen business, Pivovarna Laško announced at the end of 1998 that it was entering a reciprocal holding scheme with the Radenci-based beverage producer Radenska. Laško has become Radenska's second largest shareholder, with 10.15 percent. Radenska was to buy a substantial share of Laško the following year. Together, the two planned to work at reducing competition between themselves, as well as at increasing their effectiveness in the domestic and international market. The plan also called for shared warehouse space and joint distribution.

Laško is also looking to increase its export markets. It was announced on Friday that the brewery was purchasing a brewery in Split, Croatia and that the deal was expected to be closed within two weeks. Laško expects that its new base on the Dalmatian coast will enable it to increase its share of the market in Croatia, Bosnia-Hercegovina and the southern Adriatic. Laško's best export markets have traditionally been in the countries of the former Yugoslavia and Italy.


While the market may not be particularly appreciative of the breweries' efforts, appreciation has come from other areas. In both 1998 and 1999, six Pivovarna Union products were awarded gold medals for quality by Monde Selection, an international institute for quality assessment. Three of Union's beers were recognized, as were three of its non-alcoholic beverages.

Pivovarna Laško was recognized with the title "Advertiser of the Year" by the organizers of the ninth Advertising Festival of Slovenia this March. The award specifically named their recent campaign produced in various modes of media. Gordana Petek Ivandič, the head of the festival, said that Laško received the title for "creativity, innovation, economy and continuity of advertising, as well as for the fact that it used many different modes of media and worked with Slovene agencies."

The advertising award caused a minor scandal last month when the Ministry of Health sent a letter to the Slovene Advertising Association protesting the fact that a brewery was recognized so prominently. The Ministry questioned the Advertising Association's ethics, as alcoholism in one of Slovene society's greatest ills. Slovenia ranks in the upper echelon of per capita alcohol use of all European countries and underage drinking is a major problem.

Laws and advertising alcohol

There is not much that the Ministry can do, however. The Slovene Advertising Association immediately pointed out that Pivovarna Laško's adverts were in accordance with the law and there was no legal barrier to giving the award to the brewery. The daily newspaper Dnevnik compared the advertising controversy to the "battle against a certain other industry," namely tobacco, of prior decades.

Slovenia has one of the most restrictive laws concerning the advertising of alcohol of all European countries. Andrej Žorž, secretary of the Slovene Advertising Association, was quoted in Dnevnik saying that Slovenia's inclusion in the EU will cause Slovene trademarks that are not properly supported with advertising to be shut out of the market. Žorž called the law "outdated" and said that it was a hindrance not only to breweries, but also to wine and liquor producers.

Pivovarna Union's head of promotion, Nataša Okorn, was quoted in Dnevnik saying that the law is restrictive but does not prevent Pivovarna Union from advertising its alcoholic products. Union is working hard to find other possibilities to get its name in circulation on the corporate level. These other possibilities include sponsoring sports teams, cultural events and social programs.


The rivalry between Pivovarna Laško and Pivovarna Union that began on the market has spilled over into sports. Laško sponsors the handball club Celje Pivovarna Laško, the soccer club Maribor Pivovarna Laško, the Slovene Olympic team, and gymnastics and skiing groups. Union sponsors the basketball club Union Olimpija and is a co-sponsor of the hockey clubs Olimpija and Jesenice.

The breweries offer their support to many other projects. Pivovarna Laško sponsors exhibits at Cankarjev Dom (a cultural center in Laško), the Days of Comedy in Celje and a film festival. Pivovarna Union sponsors several initiatives in the fields of health and education, including an alcohol awareness program called Sola in Zala.

These are all highly effective methods of advertising within the law, but will they be sufficient to maintain the breweries' good fortunes? As Slovene accession to the EU draws closer, the breweries worry they will not be able to compete without more liberal advertising policies. Taken together with the European trend in declining beer consumption, the breweries have their work cut out for them. With its majority share of domestic market sales, rising trade in foreign markets and a highly diverse product line, Pivovarna Laško seems poised to survive. Even so, the problems it and Slovenia's other breweries are facing may make the beer industry among the first to fall to the common market.

Brian J Požun, 3 June 2000

Photo Credits:
Emil-Nicolaie Perhinschi
Pat FitzPatrick with MAMA

Moving on:


Kurent Legend
Pivovarna Union
Pivovarna Union
Slovenian Business Weekly


Pat FitzPatrick
To Be Biljana

Bernd Baumgartl
More Than Racism

Tom Liška
Working Alone Together

Jan Čulík
The Czech Enmity

Focus: Alcohol
Gusztáv Kosztolányi
Drinks for the Nation

Brian J Požun
Brew Wars

Mel Huang
Boozing in
the Baltics

Václav Bělohradský

Student Essay:
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Media Demythtified

Elke de Wit
Virgin Mary
Meets Porn Star

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Borders Up! Reviewed

The Arts:
Culture Calendar:

The Union of Death

Czech Republic