Competition in Addis Ababa’s beer market to heat up

It will be an “all out” rush to the capital’s watering holes once Heineken open their new brewery in Addis Ababa, Ethiopia’s capital and major beer market in July 2014. The brewery in Kilinto, on the outskirts of Addis Ababa, will be Heineken’s third plant in the East African country and will have an annual capacity of 1.5 million hl. It represents an investment of USD 150 million.

Dutch brewer Heineken entered the Ethiopian beer market in August 2011 after acquiring the Bedele and Harar breweries from the state. The breweries, which were purchased for the staggering sum of USD 163 million, had a joint capacity to produce 750,000 hl a year.

The trouble was, these breweries were in locations far away from Addis Ababa and transport represented an expensive and cumbersome challenge.

Therefore, Heineken took the decision to build a facility closer to the capital where they could brew the Bedele and Harar brands – and possibly Heineken’s premium lager beer in the future.

With about 90 million people, Ethiopia is Africa’s second-most populous country and possibly Africa’s last beer frontier. Unlike other African markets, which are usually duopolies or monopolies, Ethiopia is witnessing three beer heavyweights – Diageo, Castel and Heineken – carving the market up amongst them, banking on the country’s enormous growth potential. Per capita beer consumption is currently under five litres, which is one of the lowest in the region.