What is Guinness getting up to?
The background: Heineken and Diageo bought a stake in NBL in 2003 from Interbrew. Since then they have attacked South African Breweries in neighbouring South Africa with their Windhoek beers.
Although theirs is the typical promiscuous brewers’ relationship (in bed with each other in one country, competing head on in others), the Namibian venture seems to be so strong that they decided to build a brewery together in South Africa to be opened during the last quarter this year.
On 26 February Diageo announced that it had signed an agreement with NBL, under the terms of which Diageo will brew and distribute NBL’s beers globally, while NBL retains ultimate ownership and control.
The agreement is for an initial ten-year term at a nil initial consideration.
However, Diageo will not brew and distribute the products in certain African markets, including South Africa and Namibia.
That brings us back to the question asked above: which other countries in Africa could be excluded?
It can be taken for granted that Windhoek lager means most to consumers in Africa and it would make sense for Diageo to have a premium lager brand in its portfolio (other than, let’s say Satzenbrau, Harp and Red Stripe) to satisfy the rising demand for premium beers in countries like Kenya, Tanzania, Uganda and Nigeria.
Hang on – did we say Nigeria? Our thoughts must be running wild. Heineken is Diageo’s partner in NBL and through its stake in Nigerian Breweries Ltd. Heineken is the leading beer producer in the country. Diageo’s subsidiary Guinness Nigeria Plc is number two.
Could Heineken have an interest in Diageo doing well in Nigeria with a premium lager, although they are in competition with each other?
Since this is a business world and neither Heineken nor Diageo are known for their magnanimity (nor can they afford to), our guess is that the Nigerian market is out of bounds for Diageo.
However, should our readers, at some stage later this year, discover Windhoek lager in Lagos (albeit locally brewed!), the explanation will be that both Heineken and Diageo consider Africa’s number two beer market firmly on the growth path. Which means there is enough room there for the Heineken brand AND Windhoek.
