Diageo to sell Ethiopia’s Meta Abo brewery to BGI
Ethiopia | It is one of the industry’s unwritten rules, that if you cannot be number one or two, vamoose. This must have been the reason why global drinks company Diageo, on 24 January 2022, announced that it has agreed to sell its Meta Abo Brewery to BGI, part of Castel Group, the French multinational.
Financial terms were not disclosed. The sale is subject to approval by the Ethiopian Competition Commission and certain conditions.
Diageo’s fire sale of Meta Abo comes ten years after the Guinness brewer splashed out USD 225 million to acquire the firm from the Ethiopian government in an auction. In those days, the country of 115 million people was deemed the last beer frontier in Africa.
Big Brewers revved up production capacities
Buoyed by heady forecasts, international brewers, like Heineken and Swinkels and a host of other investors, piled into the country, snapping up pricey assets and investing even more to capture the anticipated growth. Diageo alone spent more than USD 100 million to triple Meta Abo’s production capacity to 1.7 million hl beer, French media report.
Due to Ethiopia’s economic wobbles, rising taxes and not least the civil unrest in Tigray, beer consumption has taken a hit in recent years: it declined from 14 million hl in 2019 to 10 million hl in 2020. Figures for 2021 are not available yet, but insiders suspect that consumption has not risen much, if at all, over 2020 levels.
From what we hear, Diageo significantly reduced production last year and quietly put the brewery on the market for a rumoured USD 60 million.
With breweries in six cities, such as Addis Ababa, Zeway, Hawassa, Kombolcha, Zebidar and Raya (currently idle because of the civil war), BGI Ethiopia has been operating in Ethiopia since 1998 and vies for number one position with Heineken.
