Japanese Brewer Sells Brazilian Breweries To Beer Giant Heineken

Japanese brewer Kirin announced on Monday that it would sell its Brazilian breweries to Dutch beer giant Heineken. This will make the Dutch giant the number two brewer in Brazil and this sale will cost Heineken $706 million. The reason for this sale is because of a ‘stagnant and competitive market’, the brewer stated.

In a statement, the company said, “Considering various risks associated with (the) Brazilian economy and (the) stagnant and competitive situation in (the) Brazilian beer and soft drink markets, Kirin has come to the conclusion that there are certain limitations in transforming Brasil Kirin into a sustainable and high-profitable business on its own.”

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For the Japanese brewer, this marks a departure from the Brazilian market, having paid almost $3.9 billion in 2011 for 12 breweries, a business which has subsequently lost market share and seen raw materials costs rise due to a weak currency and rampant cost inflation.

Brazil’s economy is entering a third year of recession in 2017, but according to Heineken said that the nation’s beer market was attractive in the long term. This acquisition will increase Heineken’s presence in the north and north-east of Brazil, boosting sales of the premium lagers Heineken and Sol.

This comes right after Heineken takes over United Breweries in India following the company asking Vijay Mallya to step down from the company.