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Heineken agrees to distribute Molson Coors’ beers in Ireland
Heineken’s subsidiary in Ireland has agreed to distribute Molson Coors’ products following its deal on Coors Light in the country.
The move comes as brewing giants’ activity in the UK and Ireland heats up, following Carlsberg’s takeover of Britvic for £3.3bn.
Now, the Dutch giant is planning to strengthen its own foothold, with an extension of its partnership with Molson Coors that has already seen it take on Coors Light in Ireland. But the deal will need to be cleared by the Competition and Consumer Protection Commission in the country.
According to the Sunday Independent, Heineken Ireland will now be the licensed distributor for Molson Coors’ brands, including Madri, Carling, Miller, Staropramen, Cobra and Blue Moon, amongst others.
A spokesperson told the publication that it was in the process of engaging with regulator authorities, and it was “business as usual” until this was complete, and the deal was confirmed by both parties.
Takeovers
It follows a number of big deals taking place across the UK and Ireland. Alongside the Carlsberg and Britvic deal, there is growing speculation about other big players, including C&C Group.
As reported in the drinks business last month, Engine Capital, which owns just under 5% of C&C Group, has sent a letter to the board describing the company as “a perennial underperformer” and calling for its sale.
In a letter to C&C’s board, New York-based investment firm Engine Capital criticised the group for underperforming as a result of “structural and self-inflicted problems”.
The letter called for a review of strategic alternatives aimed at a sale due to issues which make it unfit for public markets, the firm, which describes itself as a “long-term, significant shareholder of C&C Group”, argued. C&C manufactures brands including Tennent’s lager as well as ciders Magners and Bulmers. It is based in Dublin.
Engine Capital’s letter reads: “We invested in C&C more than four years ago due to the company’s high-quality portfolio of brands, leading distribution position in the UK and Ireland beverage markets, strong free cash flow generation, and the ample opportunities for the board to significantly increase shareholder value. Despite these favourable attributes, C&C has been a perennial underperformer and today is deeply misunderstood and undervalued by the market because of a combination of structural and self-inflicted problems.”
Diageo
In addition, similar questions have been raised by investors about Diageo, with one broker advising clients that Diageo might be a good stock to buy because it looks undervalued.
There are perennial rumours that Diageo might sell off Guinness, but management has always rejected that idea. Last year, Axios said that the firm was looking to off-load its beer brands, including Smithwick’s, Kilkenny, Harp Lager in Ireland, and also East African Breweries’ Tusker lager — although the firm rebuffed the claims.
Guinness is one of its best sellers in the beer portfolio globally, and has continued to see year-on-year growth, especially in the UK, where it grew 7% on 2022 levels. Recently it has also signed a big deal to sponsor the English Premier League.
The spirits giant made £3.36bn in the year to 30 June 2023 from beer sales, which is around 14% of the firm’s total sales. Its spirits arm made more than 81% of all sales in the same period.
Indeed, the group is building a giant new brewery in Ireland and has consistently pointed to symbiotic sales benefits between the stout and its premium spirits portfolio.
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