Carlsberg sells brewery to Castel

All things considered, Carlsberg’s investment in Malawi would not have given the Danish a lot of joy over the years. In fact, it must have been a near-disaster because it remained Carlsberg’s sole investment in Africa. Today, it is listed under the group’s Asian businesses.

Carlsberg does not disclose how much beer it produces in Malawi. It only says that its Malawian brewery has a capacity of 380,000 hl. The local unit is also engaged in the production of soft drinks and spirits. According to the Barth Report, Malawi’s beer output stood at an estimated 835,000 hl in 2015, after a jump from 210,000 hl in 2013 to 830,000 in 2014. This seems implausible, unless the most recent figures include the volumes of sorghum beer produced by SABMiller’s four plants in the country.

Malawi is a country of 16 million people and landlocked between Tanzania, Mozambique and Zambia. Carlsberg Malawi was founded in 1968 in partnership with the Press Corporation, a local conglomerate then under the personal ownership of Malawi’s dictator Kamazu Banda, who ruled the country between 1963 and 1994.

Today, much of Press Corporation is allegedly controlled by the government. But with the looting of public money endemic and the country beset by all kinds of shortage problems, including foreign exchange, fuel and other imports, running the beer and beverage business profitably would have been a challenge. Relying largely on tobacco exports and foreign aid, Malawi is amongst the poorest countries in Africa.

On 10 August 2016 Carlsberg announced it had sold its stake in Carlsberg Malawi to France’s Castel Group for an undisclosed fee, as it executes its strategy to slim down the company and focus on core businesses.

As part of the deal, Carlsberg has signed a license agreement allowing Carlsberg beer to continue to be produced and sold in Malawi, it said.

According to a statement released by the Press Corporation, Castel has acquired 59.48 percent of shares that used to be held by Carlsberg Malawi. Press Corporation still holds 39.65 percent of shares in the company while the remaining 0.86 percent is held by minority shareholders. Press Corporation used to hold a 50 percent stake in Carlsberg Malawi, but recently shed off 10 percent of its equity which went to Carlsberg Denmark. Whether some local Big Men wanted to cash out or the two partners sought to make the company more attractive to a buyer, will remain a secret.