Bar by bar, Heineken battles AB Inbev in Brazil

FILE PHOTO: Packs of Heineken beer are displayed for sale in a Casino supermarket in Nice, France, January 16, 2017. REUTERS/Eric Gaillard/File Photo

SAO PAULO/BRUSSELS (Reuters) – Sao Paulo bar owner Arthur Santi has long served up boatloads of ice-cold Skol, one of Brazil’s most popular beer brands and a mainstay of brewing giant Ambev SA.

Then last year, rival Heineken NV (HEIN.AS) made him an offer he could not turn down. Santi was launching another saloon in the same working-class neighborhood. The Dutch brewer wanted top billing for its products at the new location.

Heineken paid him 90,000 reais ($23,000) for a three-year commitment to sell Heineken as its only big-name premium beer. The company also threw in new refrigerators, tables and chairs, all emblazoned with its familiar green logo with the red star.

Bar by bar, Heineken is fighting for a bigger share of the world’s third-largest beer market and an end to Ambev’s dominance in Brazil.

While beer consumption has stagnated in much of the world, growth is still forecast for Latin America’s largest economy, which is why Brazil has become a key battleground for global brewers.

Heineken made a big move last year with its $1.2 billion purchase of the money-losing Brazil operations of Kirin Holdings Co Ltd (2503.T). That transaction doubled Heineken’s market share to nearly 20 percent.