verginabeer

Many entrepreneurs will be familiar with the difficulties of growing a business in a crowded market but few have faced as many challenges as Greece's Macedonian Thrace Brewery.

The brewery suffered years of sustained abuse from competitors but, despite the foul play, it has continued to grow and is now finally able to set its sights on becoming number one in the Greek market.

The Macedonian Thrace Brewery (known as MTB) was founded in 1996 by Demetri Politopoulos, who returned to his homeland from the United States in order to build an authentic Greek brewing business. He entered a market dominated by the multinational brewing giants Heineken and Carlsberg – Heineken alone has over 80% of the Greek market at the time.

This domination of the Greek market by just a couple of companies reflects a global trend in the beer sector, where consolidation has created a few super-brewers with near-monopoly positions in many countries. According to UK regulators, the top 10 brewers accounted for 40% of global beer sales in 2000 but this had risen to 60% by 2012 and the trend has continued since.

At the very small end of the market, there has been a proliferation of micro-breweries but these are hyper-local and typically their market share is negligible. Between the multinationals and the micro-breweries there once existed a thriving mid-market but this has been gutted in the past couple of decades as consolidation has made the big even bigger.

MTB has bucked the trend by developing into a strong mid-sized producer with more than 5% of the Greek market. Its Vergina brands will sell nearly 200,000 hectolitres of beer this year and the company's profits are growing.

Demetri Politopoulos says: "We are taking shelf space from brands that had de facto exclusivity in Greece. It has taken a lot of time and effort for a small, independent brewery to do this. Our success is built on the fact that when consumers have a choice, they prefer us to the multinationals."

This growth has been hard-won. From launch, MTB's competitors sought to squeeze it out of the market by arranging exclusivity deals with bars and restaurants across the country.

This led to an investigation by the Hellenic Competition Commission (HCC), which ruled in 2017 that Heineken's local subsidiary, Athenian Brewery, had breached Greek and EU competition law.

Heineken was found to have "abused its dominant position" by creating a "targeted policy that sought to exclude its competitors from the on-trade consumption market and to limit their growth possibilities, over a period of fifteen years". The fine of €32.7 million was the largest competition penalty in Greek history.

"We have shown we can overcome the standard adversity any new business faces but we have also overcome the fierce opposition of the monopolists, who have engaged in abusive behavior," says Politopoulos.

MTB's boss believes that the company was able to sustain these illegal attacks because of the stability of its management team, which he describes as "battle-hardened". Politopoulos adds that this mentality is necessary for any company to succeed against large and dominant rivals that are willing to take any measures necessary to safeguard their position in the market.

"If we had not been battle-hardened, we would not have survived," he says. "We have been successful because we are in the trenches together, we are used to functioning in adversity. This is one of the advantages of a long-term and stable management team."

Macedonian Thrace Brewery is now embarking on the next phase of its growth with major investment in its branding and packaging, including new labels, a television advertising campaign, and the launch of alcohol-free and limited-edition beers. The company has also launched soda water and teas to take advantage of its growing distribution and marketing clout.

Politopoulos says: "We now have the brand recognition that can support moving into the big leagues and can finally work towards realizing our core objective, which is to become the number one Greek beer."

But he cautions other entrepreneurs to be careful about rapid expansion because it is easy to get ahead of yourself: "When you grow, you need more of everything: more support staff; you need more people out in the field; you need more storage space. The rush to expand can be a recipe for disaster, especially if you're unprepared to handle the new challenges that a large-scale operation entails."

He advises other business owners to be sure that their organizations can sustain each increase in reach and radius. "You have a solid year and think you are kings of the world but then disaster ensues," he says. "My advice is do not get ahead of yourselves."

As MTB continues to expand, Politopoulos admits there are distractions but he is determined to keep the company focused on its core values. He has received buyout approaches from rivals but insists he wants MTB to forge its own path.

He says: "We have a commitment to Greece; a commitment to our suppliers and customers; we have a commitment to our original founding ambition of becoming Greece's number one brewer. That is what our success is built on."

Politopoulos's achievements have come despite headwinds that would flatten most aspiring entrepreneurs: the illegal foul play of his rivals; the Greek economic crisis; and now Covid-19. But by staying true to its principles, MTB continues to thrive.