Heineken’s Brazilian unit Kaiser to stay with Coke system, tribunal rules

Brazil | An arbitration tribunal has ruled that beverages produced by Cervejaria Kaiser, one of Heineken’s subsidiaries in Brazil, will continue to be distributed by Coca-Cola bottlers in Brazil through March 2022, the alleged termination date of the original arrangements.

The decision was announced by Heineken on 31 October 2019.

Two years ago, the Dutch brewer had initiated arbitration proceedings in order to end the contract sooner. It thus hoped to simplify its distribution. At the moment, Heineken manages two different routes to market in Brazil: one for Kaiser and one for its other subsidiary, the former Brasil Kirin, which Heineken acquired in 2017.

The whole dispute is a bit bizarre, as the Brazilian Coke bottlers are part of FEMSA, the Mexican drinks and retail giant, and second-largest Coke bottler. FEMSA owns a 20 percent stake in Heineken NV, following the sale of its Mexican beer business to the Dutch firm in 2010. The all-stock deal was then valued at EUR 3.8 billion (USD 5.5 billion).

We wonder: Couldn’t the two parties solve their issues amicably in the boardroom? This would have prevented their spat from becoming public and pundits from wagging their tongues.