Heineken makes a real job of it
With the acquisition, Heineken will be assuming a controlling stake in Sona Breweries, IBBI, Benue Breweries, Life and Champion Breweries, which currently brew brands such as Goldberg, Williams Dark Ale and Malta Gold.
One of the companies, Champion Breweries, quoted on the Nigerian Stock Exchange, may have been rescued from extinction. Latest available information shows that between 2005 and 2009 the company has been making losses. Champion Breweries has not paid dividends to shareholders in the past 15 years either, Nigerian media reported.
Heineken will have to integrate the newly acquired breweries into its existing business structure in Nigeria during 2011. In Nigeria, Heineken owns stakes in both Nigerian Breweries and Consolidated Breweries, with a total capacity of about 12 million hl, it was reported.
Media reports say that Heineken’s combined market share was 64 percent – which we think is somewhat exaggerated, unless that figure includes Heineken’s beer and non-alcoholic malt beverages, whose segment volumes are fairly high.
Nigeria’s breweries were said to have produced 16.5 million hl beer and malt beverages in 2009. The country’s beer and non-alcoholic malt consumption was approximately 11 litres per capita in 2009, well below the global average of 27 litres, but higher than the African average of perhaps 8 litres.
Although no market observer contacted by BRAUWELT International was prepared to put a figure to the Sona Group’s beer output, given Mr Mirchandani’s well-known cavalier attitude to the veracity of his statements, it could be well into the one million hl bracket.
We think that Heineken’s shrewd move to acquire five more breweries and increase its geographic spread puts SABMiller into a real quandary. A late-comer to the Nigerian market, SABMiller has struggled to gain market clout. With only one brewery to date (Pabod Breweries in Port Harcourt), SABMiller’s market share is probably hovering around the one or two percent mark.
SABMiller’s suits recently talked about wanting to build a greenfield brewery in Nigeria. We will be interested to see what will become of this plan – if anything at all.
SABMiller’s dithering in Nigeria is not exactly the kind of performance expected from a global brewer that claims Africa as its home turf.
