Soft drink and beer giants head east in Euro focus

By Neil Merrett

- Last updated on GMT

Related tags Pepsico United states

While they may produce very different types of beverages,
multinational manufacturers Heineken and PepsiCo have both
committed to further expansion within the high growth markets of
Central and Eastern Europe.

Heineken today confirmed that it has acquired Czech Republic-based brewer Drinks Union, while PepsiCo also announced last week that it had purchased a majority stake in Russian juice group Lebedyansky. While Western Europe has recently afforded both beer and soft drinks makers mixed fortunes during the last year, higher sales growth in emerging markets are an attractive prospect for processors. Heineken Czechs market potential ​For Heineken, the acquisition of Drinks Union for an undisclosed sum, will allow the group to consolidate its market position as the third largest brewer in the country. Upon completion of the deal, the company claims it will have a 12 per cent share of the country's beer market, amounting to a total production capacity of 1.9mn hectolitres. Nico Nusmeier, group regional president for the Central and Eastern European region, said the move was significant for the company not just in the country, but also the wider area. "With this transaction we have significantly extended our reach and consolidated our position in a profitable beer market,"​ he stated. "Our geographic presence coupled with our strong, balanced portfolio of regional and national brands, will allow us to extract greater value from the considerable growth opportunities in the Czech market."​ Through the purchase, Heineken will control all four breweries currently operated by Drinks Union, which are situated in both North and East Bohemia. Drinks Union brands, including Zlatopramen, Breznak, Louny and Dacicky will be added to the group's own portfolio in the country, which includes the Starobrno, Hostan, Zlaty Bazant and Krusovice labels. PepsiCo moves for Russian juice leader ​ Soft drink giant PepsiCo, in cooperation with the Pepsi Bottling Group (PBG) announced on Thursday that it had jointly purchased a 75.53 per cent stake of Lebedyansky. The $1.4bn (€898m) acquisition of the group's juice operations, which excludes its mineral water and infant nutrition operations, will allow the growth both to target growing markets for it products, while also moving away from its once core carbonated soft drink brands. PepsiCo vice chairman Michael White said Russia was proving to be one of the fastest growing markets for fruit juice products offering strong potential for future growth within the country "Combining Lebedyansky's strengths with those of PepsiCo, one of the world's largest makers and sellers of branded juice, and The Pepsi Bottling Group, our largest bottler, will create vast opportunities,"​ he stated. "We are committed to investing in Lebedyansky's brands and building an even brighter future for this company."​ Under the terms of the purchase, PepsiCo will control 75 per cent of the acquired venture, with PBG claiming the remaining 25 per cent.

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