Heineken distributes its beer in FEMSAs Brazil network

Heineken distributes its beer in FEMSA's Brazil network

The head of Coca-Cola FEMSA has called on Heineken to boost the bottler's margins in Brazil as it continues to expand distribution coverage for the Dutch brewer.

Carlos Salazar Lomelín said on Tuesday (3 September) that his company is in talks with Heineken to increase the profitability of Coca-Cola FEMSA's distribution network. Coca-Cola FEMSA, which handles about 40% of Heineken's sales in the country, is “very, very important for Heineken now in Brazil”, Lomelín said.

“We want to have more leverage and to convince the Heineken people that we need better margins for the following months,” Lomelín told analysts in a conference call.

The Coca-Cola FEMSA chief executive was speaking after the company's board agreed to buy independent bottler Spaipa Industria Brasileira de Bebidas. The deal, announced at the weekend, will add seven distribution centres in southern Brazil to Mexico-based Coca-Cola FEMSA's network.

A Heineken spokesperson today told just-drinks the company does not comment on its distribution agreements with Coca-Cola FEMSA, but added: “This is a great partnership for both companies”. The spokesperson said that FEMSA, in addition to being a large shareholder in the brewer, “is also an important business partner of ours in Mexico and Brazil”.

In 2010, Heineken bought FEMSA Cerveza from FEMSA, which is Coca-Cola FEMSA's parent company, in return for a 20% stake in Heineken. 

Lomelín also said a new initiative to increase soft-drink single-serve sales in Brazil is off to a good start. The company has launched a 25cl “mini-PET” bottle in São Paulo, which Lomelín said is showing “a very, very good performance” despite concerns of a declining market in Brazil.