Australia, Sydney: Lion Nathan Ltd., Australia's second- biggest brewer, and Heineken NV have concluded negotiations to establish a joint venture which will manufacture, import, market, sell and distribute Heineken Lager in Australia, Lion Nathan announced on May 17.

Under the terms of the agreement, Heineken will provide its brand to the joint venture, together with access to Heineken’s international marketing initiatives and technical support on the brewing of its brand in Lion Nathan’s Australian breweries. Lion Nathan will provide brewing, importing, sales, warehousing and distribution, and back office and support services.

The current Managing Director of Heineken Australia, Hans-Erik Tuijt, will become the Managing Director of the joint venture.

In a joint statement, Lion Nathan Australia Managing Director, Andrew Reeves and the Managing Director of Heineken Australia, Hans-Erik Tuijt said: “The premium segment of the Australian market, and in particular the international premium segment, is very attractive and has significant growth potential. We believe that the combined strength of Lion Nathan’s brands and infrastructure and one of the world’s leading premium brand, Heineken (which grew its volume in Australia by 45 per cent last year), will provide both companies with significant opportunities to grow their respective businesses in Australia.”

Heineken controls Lion's main rival in New Zealand, DB Group. DB is 76%-owned by Singapore-based Asia Pacific Breweries (APB) Group, which in turns is 42.5%-owned by Dutch brewer Heineken NV and 38% by local soft drinks group Fraser & Neave.

Last week, when Lion confirmed market rumours that it was in talks with Heineken on establishing the joint venture, one analyst suggested that on a pre-tax basis, such a deal would be worth A$6 million ($6.9 million) to A$7 million a year to Lion.

19 May, 2004