Heineken eyes dumping JC Le Roux and Nederburg three years after mega-deal with Johann Rupert’s Remgro
Heineken is considering options for its South African wine business just three years after acquiring it, with all brands such as Nederburg and JC Le Roux under review.
As an indicator of the pace of change at the Dutch brewer, which recently hired outsider CEO Rafael Oliveira to lead a revamp.
Heineken said it’s assessing the relevance of wine in its South African portfolio.
“We are not making rash decisions on what to do, but we do have it under strategic review,” CFO Harold van den Broek told analysts on a call Wednesday.
He added that how the company will compete in certain wine segments “is an active discussion with our South Africa business.”
Van den Broek did not specify what options are under consideration or whether they include a sale.
Beer and ready-to-drink volumes in South Africa grew by double digits in the third quarter, while wine remained under pressure, the company said Wednesday.
“We are really working very hard to bring volumes back into our business in South Africa,” Van den Broek told analysts.
Heineken acquired the wine brands as part of its €2.2 billion ($2.4 billion) purchase of South African wine and spirits maker Distell.
The transaction, agreed in 2021 and completed in 2023, combined Distell and Namibia Breweries Ltd. with Heineken’s existing South African operations to create Heineken Beverages.
More than 5,400 employees from Distell and Namibia Breweries joined Heineken when the transaction was completed, according to the company.
The deal was intended to give Heineken a broader drinks portfolio in the region and help it compete with rivals including Anheuser-Busch InBev SA and British spirits giant Diageo.
Instead, the enlarged business struggled with a complex integration and market-share losses.
Heineken took a €491 million impairment on the business in 2023, less than a year after completing the transaction.
Then-CEO Dolf van den Brink later acknowledged that the brewer had “dropped the ball on a couple of commercial elements.”
On Wednesday, Heineken also reported that group volumes grew more than expected in the third quarter, boosted by strong demand for beer in Asia and a rebound in the Americas.
Shares of Heineken rose as much as 2.2% on a more positive update.
The company has underperformed rivals Carlsberg and AB InBev in recovering from a slump in beer demand after the pandemic.
Heineken “has strong foundations, but we are not translating them into consistent growth and winning with consumers and customers as often as we should,” Oliveira said in the results statement.
He called for sharper execution, greater pace and accountability and said he would give more detail on his plans for the company when it reports full-year results.
