Heineken International

Gerard Adriaan Heineken

The Heineken company was founded in 1864 when the 22-year-old Gerard Adriaan Heineken bought a brewery known as De Hooiberg (the haystack) in Amsterdam. In 1868, the brewery is transferred from the Nieuwezijds Achterburgwal to the Stadhouderskade. In 1869, Heineken hired the experienced Bavarian brewer Wilhelm Feltmann, and switched to the use of bottom-fermenting yeast. In 1873 the brewery's name changed to Heineken's Bierbrouwerij Maatschappij (HBM), and opened a second brewery d’Oranjeboom (the Orange Tree) in Rotterdam in 1874. In 1886 Dr. H. Elion, a pupil of the French chemist Louis Pasteur, developed the "Heineken A-yeast" in the Heineken laboratory. This yeast is still the key ingredient of Heineken beer.

Henry Pierre Heineken

The founder's son, Henry Pierre Heineken, managed the company from 1917 to 1940, and continued involvement with the company until 1951. During his tenure, Heineken developed techniques to maintain consistent beer quality during large-scale production.

After World War I, the company focused more and more on exports. Three days after Prohibition ended in the United States, the first Heineken shipment landed in New York. From that day on, Heineken has remained one of the most successful imported beer brands in the United States.

Alfred Henry Heineken

On 1 June 1941, Henry Pierre's son, Alfred Henry "Freddy" Heineken, entered the service of the Heineken company, which by then was no longer owned by the family. Freddy bought back stock several years later, to ensure the family controlled the company again, and in 1971 was appointed chairman of the executive board. He was a powerful force behind Heineken's continued global expansion, and while he retired from the executive board in 1989, he maintained involvement with the company until his death in 2002.

During this period, Heineken tried to increase its stock price by purchasing competing breweries and closing them down. After World War II, many small breweries were bought or closed. In 1968 Heineken merged with its biggest competitor, Amstel, and in 1975 opened a new brewery in Zoeterwoude. The Amstel brewery was closed in 1980, and its production moved to Zoeterwoude and Den Bosch.

Recent history

Since mid-2007, Heineken has taken ownership of former S&N International brands such as Strongbow and Bulmers ciders, and John Smith's and Newcastle Brown Ale beers. With the part acquisition of Scottish and Newcastle in 2007/08, Heineken became the third-largest brewer based on revenues, behind the Belgian-Brazilian AB InBev and the British-South African SABMiller. Heineken owns the Czech brand Dačický, which was brewed in Kutná Hora from 1573 until Heineken took ownership of it and closed the brewery in 2009.

In October 2016, following the merger between Anheuser-Busch InBev and SABMiller, Heineken became the second largest brewer in the world.

On 12 January 2010, Heineken International successfully bought the brewery division of Mexican giant FEMSA in an all-stock deal, expanding its reach throughout Latin America. The deal brought brands such as Dos Equis, Sol, Tecate, Indio, Bohemia, and Kloster. Following the deal, Heineken started selling its products in Latin America through FEMSA's distribution network. The deal made FEMSA 20% owner of Heineken N.V. essentially becoming its largest single shareholder, after the Dutch Heineken and Hoyer families, who owns 25.83% and public shareholders owning 54.17%. The FEMSA acquisition is expected to keep Heineken in its strong position by growing its market share in the Latin American markets. FEMSA has a massive distribution network and owns Mexico's largest convenience store chain OXXO, which has thousands of locations throughout the country.

Advertising

Heineken's main advertising slogan in the UK was "Refreshes the parts other beers cannot reach", some of which featured voice-over narration by Danish comedian/pianist Victor Borge. The British TV campaign ran for over 30 years – stopping in 2005. From March 2011 they have been advertising using the song 'The Golden Age' by The Asteroids Galaxy Tour. After the success of The Entrance, a web advert (4M views in YouTube), Heineken launched The Date in May 2011.

In March 2017 in Amsterdam, Heineken opened a pop-up bakery for five days to promote the yeast used in its brewing. The bread was made by Mark Plaating, and proceeds were donated to a local baking guild.

Sports

Heineken sponsors several sporting events. The Heineken Cup was an annual rugby union knock-out competition involving leading club, regional and provincial teams from the Six Nations: England, France, Scotland, Wales, Ireland, and Italy. Heineken was the title sponsor from the cup's inaugural tournament in 1995–96, until the tournament ceased in 2014 and was replaced by the European Rugby Champions Cup. Heineken continued its sponsorship of European Club Rugby as the principle partner of the European Rugby Champions Cup returning to title sponsorship of the Champions Cup from 2018–19. They have been credited as the Founding Partner of European Rugby.

Heineken has been an integral partner of the UEFA Champions League since 2005, with a theme of "Enjoyed together around the world."

Controversies

Possible ties to the slave plantations

On 15 February 1864, Gerard Adriaan Heineken bought De Hooiberg (the Haystack) brewery in Amsterdam. It remains unclear whether the funds for the purchase of the Haystack came from his father, a cheese trader, or his mother, whose estate included proceeds from her previous husband's family's historical investments in West Indies slave plantations.

In a letter to his mother 18 June 1863, Gerard discussed the potential Haystack purchase and his plans for the future. Gerard's mother, Anna Geertruida van de Paauw, came to own shares in slave plantations in Berbice (modern day Guyana) and Suriname through her first marriage in 1829 to Pieter Jacob Schumacher van Oudorp (1804–1833) who died in 1833. The Schumacher family owned several plantations in Berbice and Suriname, according to records held at the UK's National Archive. After Pieter Schumacher died, Anna was remarried to Cornelis Heineken and had four children, one of which was Gerard Heineken. Anna died in 1881.

Price fixing and competition violations

Heineken has, over a sustained period, been subject to investigations, fines and litigation relating to anti-competitive conduct, including cartel behaviour, abuse of dominance and restrictive supply practices, both at a group level and through its subsidiaries.

At the EU level, one of the most significant enforcement actions in recent times arose from a Dutch beer cartel. On 18 April 2007 the European Commission fined Heineken €219.3m, Grolsch €31.65m and Bavaria €22.85m for operating a price fixing cartel in the Netherlands, totalling €273.7m. InBev, (formerly Interbrew), escaped without a penalty because it provided "decisive information" about the cartel which operated between 1996 and 1999 and others in the EU market. The brewers controlled 95% of the Dutch market, with Heineken claiming a half and the three others 15% each.

Neelie Kroes, the EU Commissioner, said she was "very disappointed" that the collusion took place at the very highest (boardroom) level. She added, Heineken, Grolsch, Bavaria and InBev tried to cover their tracks by using code names and abbreviations for secret meetings to carve up the market for beer sold to supermarkets, hotels, restaurants and cafes. The price fixing extended to cheaper own-brand labels and rebates for bars.

Heineken has also faced fines or sanctions in other EU markets. In France, the company was fined in 2004 alongside Kronenbourg (then part of Scottish and Newcastle), for anti-competitive conduct. In Austria another Heineken subsidiary, Brau Union, was found by the competition authority to have restricted "sales opportunities" to "oust existing drinks retailers from the market". According to the publication Brauwelt, Heineken could ultimately be fined up to 10% of its global turnover, which is over €30 billion.