About Compañía Cervecerías Unidas

Compañía Cervecerías Unidas S.A. (CCU) operates as a multi-category beverage company. The company is a subsidiary of Inversiones y Rentas S.A. CCU is one of the largest players in each one of the beverage categories in which it participates in Chile, including beer, soft drinks, mineral and bottled water, juice, wine, cider and pisco, among others. CCU is the second-largest brewer in Argentina and also participates in the cider, spirits and wine industries. Also, in Argentina, the company participates in a joint venture with Aguas Danone de Argentina S.A. in the mineral and flavored water business. In Uruguay and Paraguay, the company is present in the beer, mineral and bottled water, soft drinks, wine, and nectar categories. In Bolivia, CCU participates in the beer, water, soft drinks, juice, and malt beverage categories. In Colombia, the company participates in the beer and in the malt beverage industry. The company's principal licensing, distribution and/or joint venture agreements include Heineken Brouwerijen B.V., PepsiCo Inc., Seven-up International, Schweppes Holdings Limited, Societe des Produits Nestle S.A., Pernod Ricard Chile S.A., Promarca S.A. (Watt's), Red Bull Panamá S.A., Stokely Van Camp Inc., and Coors Brewing Company. Segments The company operates through three segments: Chile, International Business, and Wine. Chile This segment produces and sells alcoholic and non-alcoholic beverages in Chile. In the beer category, the company carries a wide portfolio of products, which includes premium, mainstream, and convenience brands, which are primarily marketed under different proprietary brands and licensed brands. The company is the exclusive producer and distributor of Heineken, Sol, and Coors beer in Chile; the exclusive distributor of imported Blue Moon beer, Birra Moretti, and Edelweiss beer; and it produces and distributes Kunstmann, Dolbek, Guayacan, Mahina, Szot, Volcanes del Sur, Polar Imperial, Patagonia, and Austral beer in Chile via distribution or license agreements. The company's non-alcoholic beverages in Chile include carbonated soft drinks (both cola and non-cola), juices, sports and energy drinks, ice tea; and water, which include mineral, purified, and flavored bottled water. These include both the company's proprietary brands and brands produced under license, from PepsiCo (carbonated and non-carbonated soft drinks), Schweppes Holdings (carbonated soft drinks) and Promarca S.A. (Promarca) (juice and fruit-flavored beverages). In the energy drinks business, the company is the exclusive distributor of Red Bull energy drinks in Chile. The company also produces and distributes Gatorade, under license from Stokely Van Camp Inc. In addition, the company produces and distributes purified waters under license from Societe des Produits Nestle S.A. and others; and distributes the imported brand Perrier. The company also participates in the ready-to-mix category with instant powder drinks in a joint operation with Empresas Carozzi S.A. The company also produces and distributes pisco and cocktails, rum, flavored alcoholic beverages (FABs), gin, and cider in Chile. In addition, the company distributes Pernod Ricard products, such as whisky, vodka, rum, gin, and other spirits, in non-supermarket retail stores. Also, the company distributes Fratelli Branca products, mainly Fernet, a blend of herbs and spices liquor. The company has implemented the integration of the route-to-market of the beer and non-alcoholic category in Chile throughout the country, and at the same time, the company incorporated into the Chile Operating segment the business activities performed by the Strategic Service Units (SSU), which include Transportes CCU Limitada (Transportes CCU); Comercial CCU S.A. (Comercial CCU); CRECCU S.A. (CRECCU); La Barra S.A.; and Fábrica de Envases de Plásticos S.A. (Plasco). Comercial CCU is responsible for the sale of the company's whole portfolio of products through a single sales force in those areas where this synergic sales model is more efficient. Additionally, product distribution is handled by the company's subsidiary Transportes CCU. Comercial Patagona Limitada (Comercial Patagona) handles the company's sales and distribution in the Magallanes Region. In the case of its Home and Office Delivery (HOD) service, Manantial S.A. (Manantial) directly handles its own sales and distribution, given the nature of the business. As part of CCU's innovation and digital transformation initiatives, the company broadened its e-commerce sales channels through the launch of a modern online sales website in Chile, called La Barra, providing a new experience for consumers through home delivery of its portfolio. In Argentina, Bolivia, Paraguay, and Uruguay the company uses its own sales force, as well as third party distributors. Fábrica de Envases de Plásticos S.A. (Plasco), a subsidiary of CCU, produces nearly all plastic caps and injected preforms the company uses to produce plastic bottles in the Chile Operating segment. International Business This segment produces and/or imports, sells, and distributes beer under proprietary brands and licensed brands in Argentina, Bolivia, Paraguay, and Uruguay. The company also produces, sells, and distributes cider in Argentina. In Argentina, the company is the exclusive producer and distributor of Heineken, Amstel, Sol, Grolsch, Warsteiner and Miller beer brands; and the exclusive distributor of imported Kunstmann and Blue Moon beer brands. The company exports Imperial, Schneider, Heineken, Amstel, Warsteiner, and Miller beer to Uruguay; and Heineken to Bolivia all from Argentina. Additionally, the company has the license to distribute beer under the Heineken brand through its subsidiaries in Paraguay and Bolivia. In Uruguay, through its subsidiaries, the company produces and distributes mineral water under the Nativa and Nix brands, carbonated soft drinks under the Nix brand, juices under Watt´s brand, isotonic beverages under FullSport brand. Also, the company exports FullSport to Paraguay and Watt's to Chile. Also, the company distributes imported wine, from Viña San Pedro Tarapacá S.A. (VSPT), under the brand Misiones de Rengo, Finca La Celia and Eugenio Bustos. Also, the company has a license to distribute imported beer in Uruguay including the following brands: Heineken, Schneider, Imperial, Kuntsmann, Miller, Amstel, and Escudo Silver. In Paraguay, through its subsidiaries, the company produces and distributes carbonated soft drinks under the brand Pulp, Puro Sol for juices and La Fuente for mineral water. Also, the company has a license to produce and distribute juices under the Watt's brand and a license to distribute beer under the Heineken, Amstel, Sol, Paulaner, and Kunstmann brands. The company also imports from Uruguay the isotonic beverage FullSport. In craft beers, the company has the Sajonia brand and its varieties, which are produced locally. In Bolivia, through its subsidiary Bebidas Bolivianas BBO S.A. (BBO), the company produces and distributes beer under the brands Real, Capital, Cordillera, and Uyuni; and carbonated soft drinks under Mendocina, Sinalco, and Malta Real. The company also participates in the water category under Mendocina and De la Sierra brands; and in non-alcholic beverages under Natur-All. In addition, through BBO, the company sells and distributes Heineken and Kunstmann, imported beer brands. Wine This segment produces and markets a full range of wine products for the Chilean and Argentine domestic markets and export markets, reaching over 80 countries. VSPT's primary vineyards are located in the main viticulture valleys in Chile, with production plants in the cities of Molina, Totihue, Isla de Maipo and also in Mendoza and San Juan, Argentina. Joint Ventures and Associated Companies CCU is equal joint owner with Maltexco S.A. of Cervecería Austral S.A. (Cervecería Austral), a company that produces, sells, and distributes Austral beer in Chile. Additionally, Cervecera CCU Chile Limitada (Cervecería CCU) has a two-year renewable license agreement, subject to compliance with the conditions established in the agreement, for the production of Austral Lager beer, returnable liter containers and kegs in Chile and a distribution agreement for the sale and marketing of all Austral products in Chile, with the exception of the Magallanes Region, where selling and distribution is carried out by Comercial Patagona Ltda. In Colombia, CCU entered into a series of contracts and agreements with Colombian entity Postobón S.A. and related companies (Grupo Postobón), by which the parties agreed to initiate a joint agreement for the manufacturing, commercialization, and distribution of beer and malt based non-alcoholic beverages through Central Cervecera de Colombia S.A.S. (CCC) in Colombia. CCC is a 50-50 joint venture between CCU and Grupo Postobón, in which neither party exercises full control; thus, CCU uses the equity method to account for this investment. CCC has exclusive contracts to import, produce, and distribute Heineken, Amstel, Murphys, Buckler, Coors Light, Tecate, and Sol in Colombia. CCC owns the brand and assets related to the craft beer brand 3 Cordilleras of Artesana Beer Company S.A. The company incorporated the Miller Lite and Miller Genuine Draft brands by means of a license agreement for the development and/or marketing of these brands in Colombia. Through its subsidiary CCU Inversiones ll Ltda., CCU owns 50% of ZF CC, in which Grupo Postobón holds the remaining 50%. Zona Franca Central Cervecera S.A.S. (ZF CC) is producing and selling to CCC, which continues to market and distribute the company's products. In 2019, CCC launched Andina, the company's first mainstream beer brand produced locally in the new brewery, located north of Bogota, in the municipality of Sesquile, Cundinamarca. Also, CCC began producing in the plant the company's licensed global brands, including Heineken and Tecate, among others. In 2019, CCC launched the company's first malt-based soft drink, Natumalta, aligned with Grupo Postobón's leadership in soft drinks in Colombia. At the end of October of 2019, the company launched Andina Light, and at the end of 2019, a new contract was signed with Coors Brewing Company, D/B/A Molson Coors International (MCI), for the production, marketing, and distribution of the Miller Lite and Miller Genuine Draft brands. In Argentina, on April 28, 2022, CCU through its subsidiary, Compañía Cervecerías Unidas Argentina S.A. acquired 49% of the ownership of Aguas Danone de Argentina S.A. (ADA), which operates in the mineral waters and flavored waters business through its brands Villavicencio, Villa del Sur, Levite, Ser, and Brío. Furthermore, on April 28, 2022, the subsidiary Compañía Cervecerías Unidas Argentina S.A., acquired 49% interest on Aguas de Origen S.A. (ADO). It should be noted that Aguas de Origen S.A. (ADO), is continuing the business of Aguas Danone de Argentina S.A. Finally, on November 30, 2022, the company's subsidiary Compañía Cervecerías Unidas Argentina S.A. acquired an additional 1% of ADO, reaching a 50% interest in this company. Seasonality Chile As a result of the seasonality of the company's different beverages, its sales and production volumes are normally at their lowest in the second and third calendar quarters and at their highest in the first and fourth calendar quarters (i.e., those months corresponding to the holidays, as well as the summer vacation season in Chile). International Business As a result of the seasonality of the beverage industry with respect to the categories in which the company participates, its sales and production volumes are normally at their lowest in the second and third calendar quarters and at their highest in the first and fourth quarters (year ended December 31, 2022) (i.e., the highest selling quarters correspond to the summer and holiday seasons in the region). Wine As a result of the seasonality of the beverage industry with respect to the categories in which the company participates, its sales and production volumes are normally at their lowest in the first and fourth calendar quarters and at their highest in the second and third quarters (i.e., the highest selling quarters correspond to autumn and winter in the Southern Hemisphere). Geographical Markets Chile is the company's primary market in terms of sales, followed by Argentina. Competition Chile The company's largest competitor in the beer business is Cervecería Chile S.A. (a subsidiary of ABI). In the non-alcoholic categories, the company's main competitors are companies that produce, bottle, and distribute non-alcoholic beverages in Chile under licenses from The Coca-Cola Company and its affiliates. The company's main competitor in the mineral, purified and flavored water business is Vital Aguas S.A., a subsidiary of Embotelladora Andina S.A. and Coca-Cola Embonor S.A. The company's principal competitor in the juice, iced tea, and sport drinks business is also Vital Jugos S.A., a subsidiary of Embotelladora Andina S.A. and Coca-Cola Embonor S.A. In all the countries where it operates, the company competes with Anheuser-Busch InBev S.A./N.V. (ABI) and its subsidiaries. The company's largest competitor is Cooperativa Agrícola Pisquera Elqui Limitada (Capel), which produces pisco locally and imports a number of spirits. The company also competes against Diageo Chile Limitada, which imports premium spirits, such as Johnnie Walker whiskey and Smirnoff vodka, among others. International Business One of the most relevant markets in the International Business Operating segment is the beer market in Argentina, where the company competes with Cervecería y Maltería Quilmes S.A.I.C.A. y G. (Quilmes, a subsidiary of ABI), leader in the beer market in that country. In addition, in the other countries that encompass the International Business Operating segment, these are Paraguay, Uruguay, and Bolivia, where the company has multi-category operations, it competes mainly in the beer category with ABI subsidiaries, and in the non-alcoholic beverages' categories, the company competes mainly with companies that produce, bottle, and distribute products of The Coca Cola Company and PepsiCo, Inc. Wine Operating segment VSPT's biggest competitors in the Chilean domestic market are Viña Concha y Toro and Viña Santa Rita S.A. (Santa Rita). Government Regulation The company's subsidiaries in Argentina are principally governed by Law N° 19,550 on commercial companies included in the Civil and Commercial Code. Its subsidiaries are principally governed by Law N° 16,060, which regulates all commercial companies. BBO is governed by the laws of the Plurinational State of Bolivia, in particular by Chapter V (Corporations) of Decree Law N° 14,379 Commercial Code. Finally, VSPT UK Ltd., as a public limited company incorporated in the United Kingdom, is governed by the Companies Act 2006, the Income and Corporation Taxes Act 1988, the Food Safety Act 1990, and the Data Protection Act 2018. History Compañía Cervecerías Unidas S.A. was founded in 1850. The company was incorporated in 1902.