In an action filed at the São Paulo Court of Justice last Tuesday, Coca-Cola Brasil, the association of Brazilian Coca-Cola manufacturers and 11 bottlers ask for the annulment of the purchase of Brasil Kirin by Bavaria, a company also owned by Heineken. The plaintiffs justify their claim that Bavaria is a company that exists only on paper to circumvent Coca-Cola’s distribution rights for Heineken’s alcoholic beverages until 2022, as guaranteed in a mutual contract.
When Bavaria respectively Heineken acquired the former Schincariol breweries from Japan’s Kirin Holdings for BRL 2.2 billion (USD 706 m) in 2017 (inside.beer, 13.2.2017, inside.beer, 1.6.2017), the Dutch brewer broke off its existing contract with Coca-Cola concerning the distribution of all Heineken products like Heineken, Kaiser, Amstel, Bavaria, Xingu und Sol which were produced by Cervejaria Kaiser, a company which was acquired by Heineken in 2010. Heineken started to distribute the brands through its own newly acquired sales network because working with two separate distribution networks in Brazil was no viable option, Heineken said at that time.
Coca-Cola urged Heineken to adhere to the old contract but Heineken refused to do so. After the two partners could not reach an agreement on the matter, they started in November 2017 an arbitration case (inside.beer, 17.11.2017) which Heineken lost in October 2019. Accordingly, Heineken agreed to resume distribution through Coca-Cola (inside.beer, 31.10.2019).