Heineken N.V. said it signed definitive agreements with China Resources Enterprise, Ltd. (‘CRE’) and China Resources Beer (Holdings) Co. Ltd. (‘CR Beer’) to create a long-term strategic partnership for Mainland China, Hong Kong and Macau (together ‘China’).
In the context of this partnership, Heineken will become CRE’s 40% minority partner in holding company CRH (Beer) Ltd. (‘CBL’), which controls CR Beer, the undisputed market leader in the world’s largest beer market, China.
Jean-François van Boxmeer, ceo/chairman of the executive board, said the” long-term strategic partnership will help Heineken to significantly expand the availability of the Heineken brand, and will strengthen CR Beer’s offering in the rapidly growing premium beer segment in China. We look forward to growing together by leveraging Heineken’s global reach and marketing capabilities to help accelerate the international development of CR Beer’s Chinese beer brands worldwide.”
As part of the strategic partnership, Heineken China’s current operations will be combined with CR Beer’s operations and Heineken will license the Heineken brand in China to CR Beer on a long-term basis.
China’s beer market, the world’s largest beer market by volume, is now the second largest premium beer market globally and is forecast to be the biggest contributor to premium volume growth in the next five years, driven by its rapidly growing middle class.
Profitability of the Chinese beer market is expected to improve significantly, driven by premiumisation, demand for international beer brands and cost optimisation.
Combining Heineken and CR Beer in China is highly complementary, Heineken said, explaining that CR Beer has a best-in-class route to market (RTM) network, a wide brewery footprint and a deep understanding of the Chinese market.
Under the strategic partnership agreement, Heineken will be CRE’s exclusive partner for international premium lager beers in China. Heineken and CR Beer will investigate which other premium brands from Heineken’s portfolio can be licensed to CR Beer in China. Heineken and CRE will also investigate if the Dutch brewer’s global presence and marketing capabilities can be leveraged to support and accelerate the international growth of CR Beer’s Snow brand and its other Chinese brands to become the Chinese beers of choice.