3 A new partnership with Heineken

Click on the image below to enlarge

×

Following two cautionary announcements in June and July 2015, NBL announced the restructuring of its joint venture with Diageo and Heineken – DHN Drinks, which was established in 2004. DHN Drinks held the licences for the combined beer, RTDs and cider portfolio of Heineken, Diageo and NBL. NBL owned 15.5% of DHN Drinks with the rest split between Heineken and Diageo.

DHN Drinks in turn owned 50% of Brandhouse Beverages (Proprietary) Limited (Brandhouse), a distribution and cost sharing joint venture with Diageo. DHN Drinks sourced beer from NBL’s facility in Windhoek and from the Sedibeng Brewery (Proprietary) Limited (Sedibeng) in Johannesburg. The latter was co-owned by Heineken (75%) and Diageo (25%).

Following the transaction announced in 2015, DHN Drinks’ beer and spirits portfolio was split, with Diageo taking full ownership of the spirits portfolio and Brandhouse. NBL now holds a 25% stake in DHN Drinks and a 25% stake in Sedibeng with Heineken holding a 75% stake in both entities. The decision to split from Diageo allows the beer partners to focus solely on the beer category.

NBL’s joint venture with Diageo and Heineken before the restructuring in December 2015.

Following approval by the National Liquor Authority in South Africa, DHN Drinks (Proprietary) Limited and Sedibeng Brewery (Proprietary) Limited was merged into DHN Drinks which is now called Heineken South Africa (Proprietary) Limited.

This new partnership between NBL and Heineken will focus on developing the beer portfolio and provides Heineken with increased commercial control of its key brands in South Africa.

As a result of the agreement, and subject to regulatory approvals, the existing Brandhouse, DHN Drinks and Sedibeng joint ventures were dissolved ahead of the previously agreed April 2018 termination date. During the transition period, Brandhouse continued to operate as normal, and a transition agreement was in place between the three parties to ensure business continuity until Heineken and NBL complete the establishment of a new marketing, sales and distribution business in South Africa.

Sedibeng Brewery was built in 2009 and has a capacity of 4.5 million hectolitres. NBL has migrated the agreed volumes of beer to Sedibeng as part of the new agreement with Heineken, and to ensure the long-term feasibility of Sedibeng. This will optimise the joint venture’s cost structure in South Africa and assist in mitigating the challenges with water supply in Windhoek.

NBL remains the brewer and sole distributer of Heineken brands in Namibia.