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Turmoil on the mineral water market - Pepsi and Nestlé's hitherto easy dominance is being undermined by much smaller, Hungarian-owned companies.

Over the past decade, mineral water consumption per head has grown fifteen-fold to 60 litres per year in Hungary. Last year was relatively stagnant, but growth should take off again this year, with some bottlers predicting annual consumption of 70 litres. Figures released by the market researchers AC Nielsen seem to confirm this: between August 2004 and July 2005, 650m litres were sold, 21% more than in the preceding year, with the total value of the market rising by 11%. But power relations in this HUG35bn market are changing. The multinationals that were leading up until now have been pushed on to the back foot by smaller companies. It is only a small exaggeration to say that anyone who can is bottling.

A year ago, the market was clearly led by the two multinationals: Nestlé Waters owned Kékkúti, and Pepsi-Cola owned Metropolitan Mineral Water (FÁÜ). The companies were neck-and-neck, each having around a fifth of the market. But this year, market actors - bearing in mind their tendency to exaggerate their own positions - believe that Szentkirályi leads the market, even though Kékkúti continues to claim pole position. The company expects to improve on the 101m litres it sold last year and hopes to take 10% more than the HUF6bn it earned in revenues last year. FÁÜ did not provide any precise figures, but Zsolt Barta, the company's communications manager, says that its earlier 20% market share has shrunk as a result of pressure from cheaper supermarket own brands. Levente Balogh, managing director of the family-owned Szentkirályi, told HVG that his company was now the market leader in still water, meeting almost a fifth of total demand. But Szentkirály hopes to go further by building up an international brand. This campaign is due to begin next year.

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