Heineken moves into German market

Joint venture should help Heineken sales in Germany, Paulaner sales elsewhere

Feb 22, 2001 - Heineken today announced it has made its a long-awaited move into Germany, the largest beer market in Europe, through a joint venture with brewing group Schörghuber.


The Dutch brewer, the second largest in the world behind Anheuser Busch, will own 49.9% of the new company with Schörghuber unit Bayerische BrauHolding controlling the rest. The company, to be called BrauHolding International, plans to export Paulaner Weiss -- using Heineken's sales and distribution network to market the beer around the world.

Under the terms of the deal, Heineken also gets a minority stake in German brewers Paulaner and Kulmbacher, both controlled by Schörghuber, a Bavarian holding group that owns one of the country's largest brewery businesses.

Heineken has been trying to sell its beer in Germany for the past 10 years, but its sales there still lag far behind those of German competitors. Karel Vuursteen, chief executive, said: "The first step into the German market looks very promising. Currently the German beer market is fragmented with a large number of small breweries. This situation will not continue in the long run."

A fragmented regional market that has long kept German brewers from setting up nationwide distribution networks and growing has also served to protect the 1,277 German breweries from outside invasion. Now that German beer consumption has begun to slide, analysts expect German brewers to either merge or welcome foreign alliances such as this one.

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