Asia Brewery, Heineken marriage fizzles out

Tycoon Lucio Tan-led Asia Brewery Inc. and Dutch beermaker Heineken International B.V. are separating the management of their respective beer brands four years after consolidating their local operations under a 50-50 joint venture.

In a disclosure to the Philippine Stock Exchange on Wednesday, Asia Brewery and Heineken announced a transition in their AB Heineken Philippines Inc. (ABHP) joint venture to a “new partnership structure” wherein Heineken would establish its own sales and marketing office based in Manila. The unbundling process is expected to be completed by end-december.

Asia Brewery, however, would continue to be Heineken’s local manufacturing partner for Heineken and Tiger, which would continue to be brewed out of Asia Brewery’s facility in Laguna. Asia Brewery would also continue to distribute these premium foreign beer brands.

“The immediate priority for Asia Brewery and Heineken is to ensure a smooth transition for the employees of AB Heineken Philippines and continuity for its customers and suppliers,” the disclosure said.

“The Philippines continues to present a good longterm business opportunity for Heineken and both Asia Brewery and Heineken remain committed to continue offering Heineken and Tiger beer to consumers in the country.”

Asia Brewery signed a partnership with Heineken to brew the latter’s brands in the country back in 2016, creating the new joint venture company, AB Heineken Philippines.

In November 2016, Asia Brewery transferred its alcoholic beverage business to ABHP, which handled the manufacturing, purchasing, importing, exporting, selling and distribution of alcoholic beverages, nonalcoholic beer, malt-based beverages and related products of both parties.

Asia Brewery’s homegrown brands that were made part of the joint venture were Beer na Beer, Colt 45 and Brew Kettle.

The disclosure was scant on details about the new structure, but it suggested that the existing 50-50 joint venture would be dissolved and the parties would henceforth regain old assets as they go their separate ways in managing the brands.

Industry sources said the decoupling of brand management was agreed upon as the parties had differences in strategy in the promotion of their respective brands in recent years. Some of the brands were supposedly being neglected when they were managed under one roof.

By regaining control of their homegrown brands, Asia Brewery and Heineken could now each invest in the marketing and promotion of their brands as deemed necessary to grow market share.

As of end-2019, Asia Brewery was supported by 13 exclusive major distributors, which had a network of 44 sales offices, 28 warehouses and 29 depots.