The contract for South African Breweries (SAB) to produce, market, sell and distribute Amstel lager has been terminated, Heineken NV said on Monday.
Heineken would build a brewery in South Africa and Amstel would be sourced from existing European breweries until the new brewery was complete, the company said in a statement.
SAB said it would stop brewing Amstel with immediate effect in a statement on Monday.
Amstel Brouwerij is a Heineken subsidiary.
The termination followed an arbitration award by the International Court of Arbitration of the International Chamber of Commerce in favour of Amstel.
”Regaining the Amstel brand is an important development for both the Heineken and Brandhouse businesses,” said Tom de Man, Heineken’s regional president.
”It allows us to further strengthen the existing Brandhouse portfolio and it represents a significant step in building our business in this profitable beer market.”
SAB has been marketing and distributing Amstel in South Africa for the last 40 years.
Amstel has an 8% market share and is positioned in the premium segment of the South African market.
The lager would be marketed, sold and distributed in South Africa through Brandhouse Beverages — a joint venture between Heineken, Diageo and Namibia Breweries with headquarters in Cape Town.
Brandhouse managing director Simon Litherland said: ”Amstel will be a fantastic addition to our premium brand portfolio and will bring significant scale to our existing beer business”.
Amstel initiated the arbitration in 2006 following its conclusion that the acquisition by BevCo of a 15,04% shareholding in SABMiller resulted in a material change in ownership of SABMiller, the statement said.
Amstel considered this to be harmful to the interests of the Heineken Group.
”Heineken’s stated argument was that SAB’s profits were being used to fund SABMiller’s global expansion and that Heineken’s objective was to restrict SABMiller’s South African domestic and international success,” said SAB.
SAB managing director Tony van Kralingen said the company ”found it difficult to believe” that the new 15% shareholder in South America posed any threat to Heineken’s interests in South Africa.
”To the contrary, the success of this brand in South Africa is attributable to over 40 years of investment behind the brand by SAB …” he said.
Heineken NV has over 115 breweries in more than 65 countries. – Sapa