Molson Coors will get CAD$70m from ABI over the early termination of the contract

Molson Coors will get CAD$70m from ABI over the early termination of the contract

Anheuser-Busch InBev has agreed to pay Molson Coors CAD$70m (US$67m) in compensation to take over distribution of the Modelo portfolio in Canada. 

Molson Coors is part of a joint venture with Grupo Modelo responsible for handling the Mexican brewer's brands in the country. The JV was due to end in January 2018. 

However, the Coors Light brewer has agreed with Modelo's owners, A-B InBev, to end the agreement in February, four years early. 

The news emerged during a conference call following Molson Coors' year-to-date results today (6 November)

Peter Swinburn, Molson's president & CEO, said the company had “no objection” to terminating the agreement early and that the companies had reached “favourable terms”. 

The total compensation agreed is intended to cover the profits Molson would have received if the JV had run its course. 

Swinburn said he did not expect to see any anti-trust concerns from A-B InBev taking control of the brands in Canada. The Budweiser brewer was forced to hand over the rights to the Modelo portfolio in the US over similar competition concerns after acquiring the Mexican group for US$20.1bn in June.

Swinburn also confirmed that his group will retain the rights for Modelo's portfolio, including Corona, in the UK and Japan until the current contract expires at the end of next year.