KUALA LUMPUR: Fast-moving consumer products distributor Yee Lee Corp Bhd is once again the distributor for the Red Bull energy drinks in Malaysia — and this time on an exclusive basis. It will be the sole distributor of the drinks here from Aug 1, 2015, taking over from beverage maker Fraser & Neave Holdings Bhd (F&N).
On March 27, F&N (fundamental: 2.1; valuation: 1.1) told the local bourse that it would not be renewing the terms of its original agreement with Allexcel Trading Sdn Bhd inked in February 2010 as both were unable to reach an agreement on the changes in commercial terms. The parties then agreed to a transition period of six months, from April 1 to Sept 30, 2015, during which F&N will hand over the exclusive dealership to Allexcel Trading in phases.
In a filing with Bursa Malaysia yesterday, Yee Lee (fundamental: 1.0; valuation: 0.8) said its wholly-owned subsidiary Yee Lee Marketing Sdn Bhd had entered into a distribution partnership agreement with Allexcel Trading on the same day. The agreement sees the appointment of Yee Lee Marketing as Allexcel’s exclusive distributor to market, distribute and sell Red Bull Gold, Red Bull Sugarfree, and Red Bull Bottle energy drinks in Malaysia.
“The agreement is for a period of five years commencing from Aug 1, 2015 (initial term) and shall automatically be renewed for further periods of two years upon each anniversary thereof (subsequent terms) unless or until rescinded or terminated by either party giving to the other party a written notice at least three months prior to the expiry date of the initial term or subsequent terms,” the filing read.
Yee Lee also said the agreement is expected to contribute positively to its future profits from financial year 2016. The appointment comes after Yee Lee announced in January that its wholly-owned unit Yee Lee Trading Co Sdn Bhd would cease to be the non-exclusive distributor of Red Bull Energy Drink and Red Bull Sugarfree in Malaysia by April 30.
This article first appeared in The Edge Financial Daily, on April 22, 2015.