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Bintang acquires right for Tiger Beer production, sales
Publicly listed PT Multi Bintang Indonesia has secured a license to produce and sell beer of Singaporean brand Tiger Beer in the archipelago.
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ublicly listed PT Multi Bintang Indonesia (MLBI) has secured a license to produce and sell beer from Singaporean brand Tiger Beer in Indonesia.
A deal on the arrangement was signed on Friday by the Indonesian brewer and its Singaporean affiliate Heineken Asia Pacific Pte Ltd.
“With the implementation of this affiliate transaction plan, MLBI receives several benefits […] Increased MLBI revenue and net profits on a consolidated basis,” read MLBI director Dayna Nicole Adelman’s explanation in a press statement released on Tuesday.
MLBI and Heineken Asia Pacific both operate under Amsterdam-based Heineken NV.
Bintang forecast in the statement that the introduction of Tiger Beer into its Indonesian product lineup would help it generate Rp 61.9 billion (US$4.1 million) worth of additional net sales in 2024.
That number translates to an expected additional net profit of Rp 12.8 billion.
Bintang has earned the rights to use the Tiger Beer trademark until 2028, and in the final year, Heineken Asia Pacific is entitled to 5 percent of the product’s sales.
The royalty was set to gradually increase over time, remaining, however, at 0 percent in 2023 and throughout next year.
In 2025, MLBI will have to pay a 1.25 percent royalty to its Singaporean counterpart, and the next year, the rate is to go up to 2.5 percent. For 2027, the former must pay a 3.75 percent royalty to the latter.
The alcoholic beverage industry was hit hard during the pandemic. Sales in Indonesia contracted more than 30 percent in 2020, while profits plummeted more than 60 percent.
However, business players are expecting a rebound this year as revenue has been rising, thanks to growing numbers of foreign tourists and the introduction of new products. That said, the number is still forecast to be below pre-pandemic levels this year.
In the first quarter, almost all public alcoholic beverage firms saw topline growth. MLBI reported a 9.8 percent year-on-year (yoy) hike in net sales to Rp 740 billion.
In a public briefing on Nov. 29 last year, a representative of MLBI explained that tourist destinations, especially Bali, would continue to be important for the business even though the company was working on expanding to "non-tourism areas" in Indonesia.
Some smaller producers have capitalized on the rebound momentum to go public at a time of growing investor appetite for the industry, as manufacturers see room for growth amid Indonesia's low per-capita alcohol consumption.
MLBI launched Bintang Crystal during the pandemic, which it claimed was Indonesia’s first "smooth cold-brewed beer". This year, the firm began selling Bintang Anggur Merah, a red wine-flavored beer, through offline retailers, despite not having launched it officially.
