Coca-Cola Brasil seeks compensation from Heineken
Brazil | Heineken has refuted a Brazilian newspaper report, which said that Coca-Cola Brasil had filed a lawsuit seeking to void Heineken’s 2017 acquisition of Brasil Kirin. This was reported by esmmagazine.com on 27 January 2020.
The Brazilian newspaper Valor Economico said on 24 January 2020 that the filing in a Brazilian court accused the Dutch brewer of designing the acquisition contract for Brasil Kirin in such a way that it would break the distribution contract Heineken had with Coca-Cola.
In 2017, Heineken bought Kirin’s struggling Brazilian unit (the former brewer Schincariol) for EUR 664 million. Since then, Heineken has maintained two distribution networks: Kirin’s and Heineken’s previous one with the Coca-Cola distributors.
However, Heineken said it understood the lawsuit from Coca-Cola Brasil and the Brazilian Coke bottlers was not threatening the acquisition, which made it the number two player in the country, behind AmBev.
In an effort to streamline its distribution, Heineken had sought to terminate its contract with the Coke bottlers ahead of its expiry. But, in October 2019, an arbitration tribunal ruled in favour of the bottlers. It decided that Heineken must keep distributing its existing Kaiser products via the Coca-Cola network until March 2022, thus upholding the dates in the original contract.
Heineken said on 26 January 2020, that it had become aware of the lawsuit through public sources, but believed the suit was not aimed at annulling its 2017 acquisition of Kirin’s business in Brazil.
Coca-Cola Brasil and the Brazilian Coke bottlers, it said, were seeking compensation for Heineken’s unwillingness to transfer its full portfolio of beers to the Coke distribution system.
The plaintiffs were challenging certain corporate actions of Heineken, but these actions did not impact the validity of its Brasil Kirin purchase. An arbitration tribunal had already addressed these issues, Heineken said. Heineken also said the lawsuit did not change its operations in Brazil, including distribution of its Kaiser brands via Coke distributors.
