Published: Wed, February 15, 2017
Money | By Oscar Reynolds

Japanese Brewer Sells Brazilian Breweries To Beer Giant Heineken

Japanese Brewer Sells Brazilian Breweries To Beer Giant Heineken

Today, Heineken now operates five breweries in Brazil and has a strategic distribution partnership with Coca-Cola bottlers.

Heineken's first venture in Brazilian beer market was in 2010 with the acquisition of the beer operations of Fomento Económico Mexicano.

Brasil Kirin operates 12 production facilities with its own distribution network and has a strong presence in the North and the North East of Brazil, where Heineken now has less exposure.

This way, the Dutch company immediately gets 9 % (for beer) and 2 % (for soda) market shares in Brazil and it gains plenty of additional traction in 2 of its weaker regions in the country: the north and northeast.

Brasil Kirin has also reported its financial results for the year ended 31 December, 2016.

Brazil's economy appears set to enter a third year of recession in 2017, but Heineken said that its beer market was attractive in the longer term, with a premium segment growing faster than the market as a whole. "I look forward to welcoming our new colleagues from Brasil Kirin into HEINEKEN and working with them to take the combined business forward".

Some analysts have also said the deal is important as it makes Heineken a stronger rival in a heartland of global beer leader A-B InBev just as the latter has pushed into Heineken's markets elsewhere through its takeover of SABMiller.

"However, capitalising on its improved position will be far from straightforward for Heineken - it faces considerable challenges including intense competition in the premium segment, the rising popularity of microbrewers and a beer market under pressure from ongoing macroeconomic uncertainty".

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