Starts dispute between the giant beverage producers Coca Cola and Heineken with Ambev in the Brazilian market

Coca Cola announced an agreement with Heineken to remodel its distribution network in Brazil and puts the multinational Ambev, the largest beverage company in the world, in a tight fight.

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The agreement between the Heineken Group and the Coca-Cola distribution system in Brazil announced on Wednesday, the 24th, puts an end to an impasse that extends since the purchase of Brasil Kirin by the Dutch brewery, in 2017.

The partnership between the giants Heineken and Coca Cola will come into force in the middle of this year and will be valid until 2026, but there is the possibility that it will be extended for another five years.

The contract is subject to regulatory approvals and, as part of the negotiation, the companies have agreed to end all disputes between them relating to previous distribution agreements.

According to Bradesco BBI, the consequences of the decision will be negative for Ambev, as the bottling of competitors will develop better in Brazil.

Heineken and Amstel will be distributed by the Dutch brewery itself and Coca Cola will be able to distribute other Heineken brands

The expectation for the outcome of the story was such that, in the last week, a report published by Bradesco BBI valued at BRL 1,9 billion a possible transaction in which the Coca-Cola bottlers, with Femsa and Andina, would buy the Kaiser and Bavaria brands and, thus, resolve the impasse.

According to the statement, Coca Cola will continue to offer Kaiser, Bavaria and Sol. This portfolio will also be complemented with the Eisenbahn premium brand and other international labels.

Coca-Cola Brasil will still be able to sell and distribute other beers and alcoholic beverages, respecting an undisclosed proportion of the Heineken Group's portfolio. Likewise, the brewing group will be able to explore other opportunities in the non-alcoholic segment.

For analysts, the agreement means more competition between the giants Ambev, Coca Cola and Heineken

In the analysts' view, Ambev's competitive advantages would diminish with the hit.

There is no doubt that competition will increase with the Heineken Group better resolved in its distribution chain.

About the increase in competition, Ambev thinks it is too early to comment. “From our point of view, the Brazilian market has always been competitive. This was announced yesterday and it is still too early to say the impacts. We prefer to look at what we control. Our distribution network has operated very well. It is a well-oiled machine created over decades,” Lucas Lira, CFO of the company, told Estadão/Broadcast. company.