Heineken and Coca-Cola-FEMSA have ended their dispute over distribution rights for beer in Brazil. Both companies announced on Thursday to continue the distribution of beverages by Coca Cola bottlers in Brazil through 2022. The decision only applies to beverages that are produced by Cervejaria Kaiser, a company which was acquired by Heineken in 2010. The decision also means that Heineken will continue to keep two separate distribution networks for its beers for the next years, one for the former Kaiser brands and one for the former Schincariol brands
Initially, Heineken wanted to terminate the distribution contract with Associação Brasileira dos Fabricantes da Coca-Cola (ABFCC), a consortium of 13 Coca Cola distribution companies in Brazil. After the two partners could not agree on the future distribution of Heineken brands like Heineken, Kaiser, Amstel, Bavaria, Xingu und Sol, they started in November 2017 an arbitration case in this regard (inside.beer, 17.11.2017).
When Heineken acquired in 2017 the former Schincariol breweries from Japan’s Kirin Holdings for EUR 1.03 billion (USD 1.21 bn) (inside.beer, 13.2.2017, inside.beer, 1.6.2017), the Dutch brewer broke off its existing contract with ABFCC to start distributing the brands through its own newly acquired sales network. In the long run working with two separate distribution networks in Brazil was no viable option, Heineken said at that time.
However, according to today’s agreement, Heineken has to stick to its former distribution partner until 2022. The remaining duration was set by the arbritation to 5 years starting from the day when Heineken gave proper notice of the termination of the contract at the end of 2017.