By Adam Clark
Heineken NV (HEIA.AE) said Friday that it is reviewing its operations in the northeast of Brazil, due to a court order that it says forces it to sell drinks at a loss.
"The Heineken Group in Brazil is in a legal dispute with Grupo LGH regarding the pricing of its portfolio in the states of Pernambuco and Paraiba, where it currently complies with a court ruling that determines the sale of its products at lower amounts than the taxes paid on them," the company said in a statement.
"The company is concerned about this situation and, faced with distortions caused in the market, is being forced to review its commercial strategy in the region and is considering the adoption of extreme measures," said Heineken.
Brazilian newspaper Economico Valor reported Wednesday that Heineken has previously considered closing two factories in the area, after its 2017 purchase of local drinks maker Brasil Kirin.
Heineken said in its statement that the situation in the region isn't in line with its growth plan in the Brazilian market as a whole, where it intends to continue investing.