Case Background
Heineken, a brewer company mostly known for its beer, was founded in Amsterdam in 1863. Heineken’s success dates back to 1889, winning a gold medal for its beer at the Paris World’s Fair and becoming one of the largest beer sellers in the Netherlands four years later. In 1937, Heineken granted its first license to a foreign brewer to produce Heineken beer according to the original formula to become available to markets outside The Netherlands.
To keep control over their own brand while expanding their market, Heineken sought to gain majority equity stakes in its partners. The company owned outright its operations in the Netherlands, France and Ireland and held majority interests in breweries in various other European countries. In Germany and the United States, Heineken beer was not bottled but was sold after import. In 1993, Heineken recorded net sales of over nine billion guilders and a trading profit of nearly 800 million guilders. Beer then accounted for 82% of total sales, of which 71% percent was sold in Europe.
The beer sales brewed under Heineken’s supervision then was about 5% of the world’s total beer production. The beer sales of the Heineken brand itself amounted for about 1,25% of the world’s total beer production. Other brands of the company were Amstel, Buckler (a non-alcoholic beer) and Murphy’s Stout. Heineken also oversaw the brewing of many local beer brands, marketed by Heineken’s subsidiaries.
But Heineken was not the only brewery signing joint ventures and acquiring equity stakes. Due to this development in the industry, the brewing industry was becoming increasingly global. This trend was especially seen in emerging markets with increased per-capita consumption and population expansion.
Europe, however, was another type of market, where there was little population growth and a stable consumption per-capita. This