New owners of Heineken’s local brewery could challenge Lion’s market share

The Distilleries Company of Sri Lanka Plc (DCSL) has officially announced its purchase of 99.4% of the issued share capital of Heineken Lanka Limited from Heineken Asia Pacific Pte Ltd for a total consideration of EUR12 million (USD13.5 million), in a stock exchange filing posted by the company on 10 January 2024.

Heineken Lanka Limited is Sri Lanka’s second largest brewer.  Heineken Asia Pacific Pte Ltd, is the Singaporean subsidiary of Heineken International, and controls about 45 breweries in 19 countries in the Asia Pacific region.

DCSL is a major distributor of international spirits brands in Sri Lanka, but prior to this acquisition had no brewing interests. It has been on a diversification drive in recent years, however, into sectors such as shipping, insurance and telecoms.

According to the announcement, the brewing of beers under international brands such as Heineken, Tiger, and Anchor will be continued by the purchased operation under a trademark licence agreement with Heineken Asia Pacific, and it will also continue to brew its own domestic brand, Bison. Heineken Lanka Limited will change its name to DCSL Breweries Lanka Limited.

When the deal was originally announced last November, Fitch Ratings said at the time, that the acquisition could increase competition for Lion Brewery (Ceylon) PLC, the leading brewer in Sri Lanka’s beer market with its Lion lager brand, the country’s most popular brew.

“Heineken is a distant second in Sri Lanka’s beer market for now, but we believe DCSL has the industry know-how, market access, and financial strength to elevate Heineken’s operations to a level that could weigh on Lion’s market share,” said Fitch.