Coca-Cola Company buys Backus non-alcoholic Peruvian brands

Source: www.mercadonegro.pe

Last weekend SabMiller, which administrates all of Backus´ activities, came to a global agreement with Coca – Cola Company to purchase all of their non-alcoholic beverages in an attempt to expand operations and sales in Africa. This purchase was for 260 million dollars.

Backus is an international Peruvian brewery. It was founded by Jacobo Backus and Howard Johnston two American citizens. In 1876 they founded an ice company in a well-known district in Lima, Rimac, and in 1879 they change it to The Backus and Johnston Brewery LTD. But in 1954 it was bought out by a group of Peruvian entrepreneurs led by Ricardo Bentin Mujica in an effort to show the world how you can nationalize a company with private investment. Throughout the years Backus bought out all their competitors in Peru and as a result they own all the major beers brands of all the major regions making them a modern day monopoly. In 2005 Backus merged with SABMiller to become the second largest beer company in the world with a presence in 60 countries with a portfolio of 170 brands..

Source: www.mercadonegro.pe

Not only does Backus have alcoholic brands, but it also possess no alcoholic beverages; San Mateo mineral water, Cristalina (water), Agua Tonica Backus (soda water), Guarana Backus (soft drink), Viva Backus (soft drink) and Maltin Power (nutritional drink). All of these brands will be licensed to Coca-Cola Company except for Maltin.

These brands are of Peruvian origins and are highly connected to the Peruvian people. The good thing is all production, distribution and commercialization will still be under Backus. Hopefully this means no Peruvian will lose their job in the coming months. This is the second multi-million dollar deal by Coca-Cola Company in Peru. In 1999 a deal was struck by Coca-Cola Company with The Inca Kola Coporation and Jose R. Lindley Corporation worth 300 million dollars, and became majority owners of the soft drink Inca Kola. It´s important to note that at the time Inca Kola held a 35% market share of soft drinks to Coca-Cola´s 21% market share.

Now we have a monopoly in the soft drink market and with this purchase Coca-Cola Company owns all the major soft drink brands Peru.

Do you think Coca-Cola Company is a monopoly?

Do you think it´s an accomplishment for a local brand to be bought out by a global brand?

What do these purchases mean for local brands?

Sources:

http://www.mercadonegro.pe/noticia/4640/backus-cede-a-coca-cola-sus-marcas-de-bebidas-no-alcohlicas

http://www.backus.com.pe/website/otras-bebidas.html

http://www.larepublica.pe/02-12-2014/backus-cede-a-coca-cola-sus-marcas-de-bebidas-no-alcoholicas

http://www.codigo.pe/marketing/coca-cola-adquiere-las-marcas-no-alcoholicas-de-backus/s-marcas-no-alcoholicas-de-backus/