AB-InBev and Heineken push value packaging
South Africa | What are we to make of AB-InBev’s launch of Carling Black Label beer in a one litre bottle for only ZAR 19 (USD 1.51)? Is it AB-InBev’s attempt to hike its volume sales through disguised discounting?
Promotions have become a distinct feature of South Africa’s mature beer market recently as market leader AB-InBev (at an estimated 80 percent market share) and Heineken (13 percent market share) have gone for large bottles and multipacks.
The Dutch brewer has responded to AB-InBev’s value game by driving into the mainstream segment with the craft beer brand Soweto Gold, which it acquired in 2017. Currently, six-packs of Soweto Gold are available for ZAR 49 (USD 3.90). The concerted down-pricing strategy does not seem to apply to Heineken’s other two craft brewers Stellenbrau and Jack Black.
“Both AB-InBev and Heineken are pursuing an ambitious growth agenda. With that comes quite intensive promotional activity,” Heineken’s South Africa chief Ruud van den Eijnden was quoted as saying.
South Africa’s 200+ craft brewers, who are still reeling from the ten percent hike in excise on beer in February 2018, are concerned. Many are fighting for survival as the country’s Big Brewers aggressively take accounts away from them.
