Heineken anounced today the entry into the beer market of Ecuador by acquiring a majority stake in Biela y Bebidas del Ecuador, a mainly locally owned brewing and beverage company. Financial terms of the transaction were not disclosed.
Following antitrust regulations after the purchase of SABMiller by AB InBev in 2016, the business which is today Biela Ecuador was split from the rest of the operation and sold as a separate company to local investors. “Over the past few years, Biela Ecuador has established its place in the Ecuadorian beer market by re-launching the Biela brand. The Biela brewery is located in Guayaquil, Ecuador's largest city, and is fully operational using high-quality brewing and packaging equipment,” Heineken said in today’s press statement.
The Dutch brewing giant does not only want to strengthen the local brands but also to market in the future its portfolio of premium and international brands in Ecuador. Heineken also plans to brew Heineken beer locally in due course.
Ecuador is a very attractive market for Heineken, with GDP projected to grow at a 5.7% rate (CAGR) in the next 10 years and encouraging social-economic fundamentals. The Ecuadorian beer market has a current size of 6 million hectoliters per year and a relatively low consumption per capita of 39 liters when compared to other South American countries. In addition, the Ecuadorian government is supportive of foreign investment and of introducing competition in the beer market.
Exactly one year ago, Heineken already entered another Latin American market by buying Belize Brewing Company, beer market leader in the Central American country of the same name (inside.beer, 11.5.2018).
Marc Busain, President Americas at Heineken, said: "We are pleased to announce our investment in Ecuador. With its favourable demographics, flourishing tourism industry and GDP growth, it offers a lot of potential to grow our premium offering, led by the Heineken brand. We are excited to grow our business in Ecuador in close collaboration with our new partners."
Luis Enrique Landinez, CEO of Biela Ecuador, speaking on behalf of the group of investors said: "We are very pleased to have completed this alliance with Heineken, which is good news for Ecuador and its consumers, who will have a wider and better choice of beer products. The successful re-launch of the Biela brand, its current recognition in the market, and the favourable investment environment generated by the Ecuadorian Government have successfully drawn Heineken into Ecuador."
Before the merger, the beer market in Ecuador was dominated on one side by Cervecería Nacional, owned by SAB Miller and beer market leader in Ecuador with brands like Pilsener, Pilsener Light, Club and Pony Malta and on the other side by Ambev Ecuador, the local arm of ABInBev with brands like Budweiser, Brahma, Biela y Maltín. As part of the regulations imposed by the local antitrust authority Superintendencia de Control del Poder del Mercado, AB InBev had to divest one brewing site and the brands Zenda, Dorada, Biela and Maltín.