Luxembourg’s top two drinks depositories, both family-owned businesses, announced the merger on Friday morning at the Chamber of Commerce.
As no one in the Heintz family was able to take over the business, Munhowen took the initiative to launch discussions of a merger. The fusion of the two companies will now take place step by step, says Munhowen CCO Isabelle Lentz:
“We’ll need to carry out a full analysis to see where we can make the right synergies. The Heintz depot in the south is bigger than ours, so we need to see how things will be organised, whether we have a depot in the north and the south, or whether we need to move.”
However, the two companies will not operate as a single business, explains Oliver Mausen, commercial director of Boissons Heintz:
“Our customers will keep their contracts. We aren’t simply going to throw everything together. It was important to us to keep both companies separate.”
During negotiations, the goal was to bring the companies together and maintain their strong position within the Luxembourg market, while also looking beyond the borders.
“The Greater Region has companies which are ten times our size. We wanted to strengthen ourselves in case of any future imported business, which could cause us issues.”
The drinks wholesalers plan to expand into the French market, among other things, says Lentz. However, they will continue to focus on maintaining good relationships with their current customer base, prioritising their good service, which helps the companies stand out from the lower-priced supermarkets. Many supermarkets sell products cheaper than they cost Munhowen to purchase.
“When we enter negotiations with the big supermarket chains, they say they will buy beer at this price, and if they don’t get the price they want, they won’t put our products in stores. This doesn’t leave us with many options.”
Both companies currently employ around 320 people, with further recruitment planned in the future, according to the Munhowen CCO.
Earlier this year, Green MP François Bausch questioned whether the merger would prove problematic due to competition rules, pointing out that new company would have a virtual monopoly on the market, bringing the risk of higher prices.
In 2019, the competition authority also expressed concerns. However, a new law on the control of mergers has not yet been passed in parliament.
