AB-InBev to invest in Africa

AB-InBev seems to have big plans for Africa as it will invest between USD 150 million and USD 200 million in two new production lines in South Africa this year.

In Nigeria, where AB-InBev operates SABMiller’s three breweries at capacity limits, plans are firming to build a new plant, rather than invest in expansions. This could be a costly undertaking, as sites can cost as much as USD 400 million, AB-InBev’s Zone President Ricardo Mr Tadeu said recently.

Before the entry of SABMiller into Nigeria in 2009, market leader Nigerian Breweries (Heineken) and Guinness Nigeria enjoyed a duopoly. In 2016 their combined market share was about 90 percent, with SABMiller controlling over five percent. In response to SABMiller’s successful challenge, the two have had to tighten their belts, re-strategize, and launch series of campaigns to stay at the top.

Mr Tadeu also admitted that AB-InBev will not follow Heineken into other African countries such as Ivory Coast and the Democratic Republic of Congo.

Whether it’s a marketing stunt or a serious internationalising strategy remains to be seen but AB-InBev is planning to sell packs of eight different African beer brands outside the continent, including Castle, the dominant brand in South Africa, Kilimanjaro of Tanzania and Nigeria’s Hero.

In exchange, AB-InBev will introduce global beer brands such as Budweiser, Stella Artois and Corona into African markets. The brewer is even deliberating brewing some of its international brands locally in Nigeria as the imported version is too expensive for consumers.