The Coca-Cola Company and the Coca-Cola System in Brazil have reached an agreement (the “Agreement”) to redesign their longstanding distribution partnership in Brazil. The Agreement marks a new milestone in the relationship among the companies; it re-aligns the interests of all parties for the future and builds on a solid historical foundation.
As per the Agreement, expected to become effective mid-2021, the parties will begin a smooth transition of the Heineken® and Amstel brands to HEINEKEN Brazil’s distribution network. The Coca-Cola System in Brazil will continue to offer Kaiser, Bavaria and Sol, and will complement this portfolio with premium brand Eisenbahn and other international brands. The Agreement allows the parties to better serve consumers and customers in the Brazilian market with a solid portfolio, building on the positive momentum developed over many years of successful collaboration.
Additionally, as part of the redesign of the distribution partnership, the parties will have more flexibility. Subject to certain mutually-agreed upon terms established in the Agreement, the Coca-Cola System in Brazil will be able to produce and distribute alcoholic beverages and other beers in a certain proportion to HEINEKEN’s portfolio and HEINEKEN will be able to explore further opportunities in the non-alcoholic segment. This will allow Brazilian consumers to benefit from a wider array of options.
Mauricio Giamellaro, Managing Director HEINEKEN Brazil commented: “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.”
Luis Felipe Avellar, President Coca-Cola Brazil & South Cone Operations commented: “Our companies have a long partnership history in Brazil, and we are pleased to reach a new agreement that will serve consumers for many years to come.”
Ricardo Mello, President of the Association of Coca-Cola Bottlers in Brazil commented: “This new agreement is positive news not only for the parties involved but for our Brazilian clients and consumers as well.”
The parties have agreed to an initial term until December 31, 2026 with automatic renewal for another 5-year term subject to the terms of the Agreement. The Agreement is subject to customary regulatory approvals. As part of the Agreement, the parties have agreed to end the existing litigation between them relating to the previous distribution agreements.