Heineken Says Brandhouse Joint Venture ‘Makes Absolute Sense’

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Heineken NV (HEIA)’s drinkmaking and sales joint venture with Diageo Plc (DGE) in South Africa “makes absolute sense” as a selected project to boost growth, Chief Financial Officer Rene Hooft Graafland said today.

Distributing beer, premixed drinks and spirits together through the Brandhouse venture is pragmatic, and partnering with Diageo, owner of the Guinness beer brand, is useful in other African countries, Hooft Graafland said in a webcast.

“In a number of markets, Guinness is a very strong addition to our portfolio,” though the Dutch brewer usually wouldn’t favor combining beer and spirits distribution, Hooft Graafland said during his presentation at a Deutsche Bank consumer conference in Paris. “But there are special circumstances where we help each other.”

Brandhouse said in April that it controls about 14 percent of the South African beer market, up from 12 percent. Amsterdam- based Heineken, the world’s third-largest brewer, and London- based Diageo, the biggest distiller, could team up to buy Brazilian brewer Primo Schincariol Industria de Cervejas & Refrigerantes SA, Valor Economico reported in May, without saying where it got the information.