Europe's two largest brewers Heineken and Interbrew are to terminate their licensing and distribution agreements in Italy by mutual consent.
Under the terms of the agreements, Heineken Italia has had the right to produce and/or distribute Interbrew's Belgian brands and the Labatt range of Canadian beer in the Italian market since 1995.
Interbrew will now regain full control of its premium and speciality brands (Hoegaarden and Leffe) and offer its comprehensive brand portfolio in the Italian market as of 1 March 2003, while Heineken Italia will launch its own exclusive range of speciality beers for the Italian market.
Interbrew has paid €19.5 million for the return of the rights to its Belgian and Canadian brands, a move which it claims allows it to consolidate its position as the leading importer of beer in Italy. It will also allow the Belgian group to benefit more fully from the substantial margins generated in the Italian market.
Heineken has handled the production and distribution of Interbrew's Stella Artois and its Belgian speciality brands in Italy since 1995, and of the Labatt range since 1996. With a sales volume of 170,000 hectolitres in 2001, Stella Artois is an important premium brand in the Italian import segment.
Within the total Italian beer market (which Interbrew put at 16.7 million hectolitres in 2001), the import segment represents 26 per cent and has been the fastest growing beer segment in Italy over the last 10 years.
Since its recent acquisitions in the UK (Bass Brewers) and Germany (Beck & Co), Interbrew said it had achieved a stronger position in the Italian market, with leading brands such as Beck's and Tennents, and the return of Stella and the other brands to the Interbrew fold from 1 March will enable the company to compete more sucessfully with the leading players in Italy.
"Our brands in Italy can now be leveraged on a broader platform, allowing us to grow the brands substantially faster than in previous years," said Dieter Ammer, regional president for Germany, southern Europe & export at Interbrew. "It's a win-win situation. The deal makes a lot of sense not only from a strategic, but also from a financial point of view."