BREWING GLOBAL PARTNERSHIPS
Operating as a family business for more than 150 years, Heineken, a Dutch brewer, has rapidly expanded in Asia, from Sri Lanka to Taiwan to Mongolia. In 2012, Heineken acquired Singapore-based Asia Pacific Breweries, which resulted in the integration of the Sri Lankan business with the Heineken group. A few months ago, Asia Pacific Brewery (Lanka) was renamed Heineken Lanka to reflect this change.
Being a family business makes it easier for Heineken to set the tone that they are about the long term. Not all Heineken’s overseas investments are made when conditions are perfect, but based on expectation that economic development and demographics will be favourable in the long term. Breweries take several years to provide an ROI. However, if taxes are set at a level that allow consumers to afford beer, Heineken says it will give serious thought to increasing its investment here.
THE RIGHT INVESTMENT CLIMATE
Heineken wants to go to places with potential—where the economy is moving, and so are its people. The overall economy, demography, political environment and stability of the country, as well as the regulatory and excise regimes, all have a major impact on its investment decisions. Sudden changes in taxes have significant impacts on business. For Heineken to brew its namesake brand here, it feels the investment climate needs to improve to generate adequate ROI.
TAKING LOCAL BRANDS GLOBAL
In Sri Lanka, Heineken Lanka operates a brewery in Mawathagama, where they brew international and local brands like Tiger, Anchor, Baron’s, Bison and ABC Stout. Heineken’s presence overseas has brought its most famous beer brand to the world and taken local brands it has acquired global. It’s now taken Singapore’s 85-year-old Tiger brand to Russia, the US, the UK, Ireland and even Nigeria.
THE POTENTIAL FOR CRAFT BEERS
Globally, there is a shift towards craft beers, often made locally in small breweries using traditional methods. There are vast ranges of such beers that have unique identities. Heineken brews 280 beer and cider brands, including many craft beers. Import taxes would make these beers expensive in the local market if they were imported.