Heineken and Coca-Cola System realign Brazil distribution partnership

Heineken has reached an agreement with The Coca-Cola Company and the Coca-Cola System in Brazil to redesign their long-standing distribution partnership in the country.

The redesigned partnership – which the companies claim will allow them to better serve consumers and customers in the Brazilian market with a wider portfolio – is expected to come into effect from mid-2021 until at least the end of 2026. The companies have agreed to an automatic renewal for another five-year term, subject to terms of the agreement.

As part of the new agreement, the parties will begin a smooth transition of the Heineken and Amstel brands to Heineken Brazil’s distribution network. Meanwhile, the Coca-Cola System in Brazil will continue to offer Kaiser, Bavaria and Sol; while taking on Eisenbahn and other international brands.

Under the terms of the deal, the Coca-Cola System in Brazil will be able to produce and distribute alcoholic beverages and other beers in Heineken’s portfolio; while Heineken will be able to explore further opportunities in the non-alcoholic segments.

“I am very pleased to redefine our distribution partnership with the Coca-Cola System in Brazil. Through a dual route to market, we will be able to reach and better serve our consumers and customers with our broad portfolio, leveraging two strong distribution systems,” said Mauricio Giamellaro, managing director of Heineken Brazil.

As a result, the parties have agreed to end existing litigation between them relating to previous distribution agreements. Back in 2017, Heineken announced it was ending its distribution contract with Coca-Cola Femsa in Brazil, following its €665 million acquisition of Kirin’s struggling Brazilian business.

However, in 2019, Heineken and Coca-Cola Femsa ended their dispute, agreeing that beverages produced by Cervejaria Kaiser will continue to be distributed by Coca-Cola bottlers in Brazil until 2022.

Ricardo Mello, president of the association of Coca-Cola Bottlers in Brazil, added: “This new agreement is positive news not only for the parties involved but for our Brazilian clients and consumers as well.”

Last March, Heineken announced an investment of $183 million to expand its brewery in Ponta Grossa, Brazil, according to a report from Reuters.