What’s in a name?

...a lot if you are called Bavaria Brau and have a namesake in the Netherlands. The Netherlands’ fourth largest brewer Bavaria has joined a consortium of local investors to take over the Bavaria Brau Brewery, located near Johannesburg, which went into liquidation last July with liabilities of R37 million (USD5.7 million). This is Bavaria’s first investment outside the Netherlands. Bavaria will hold 60 percent of the South African operations, the consortium 40 percent.

SAB defied its sceptics

If you see someone drinking a beer in India there is a 34 percent chance it is a SABMiller product; in the Czech Republic the chance of the beer being SABMiller’s is 49 percent; in Italy 25 percent; in Romania 20 percent; and in the US the chance is 18 percent. In China, however, there’s an 88 percent chance it is not SABMiller. Anyone drinking a beer in Mozambique, Swaziland, Zimbabwe, Zambia, Botswana or Lesotho can only be drinking SABMiller. In South Africa, if you’re drinking a beer down at your local, there’s a 98 percent chance it’s a SABMiller product. Unless you are drinking it in one of the fancier pubs where they specialise in premium beers. The premium sector now accounts for 6 percent of the local market and SABMiller has only a 70 percent share of it....

Cul-de-sac for SAB?

Since December last year, Guinness Ghana Limited and Ghana Breweries Limited (Heineken) have been in discussions over a merger or takeover (which way you look at it) that could create the biggest brewing company in Ghana. The proposed merger was confirmed by the Ghana Stock Exchange. The new company, to be called Guinness Brewery Ghana Ltd, in which Diageo would own 51 percent and Heineken 20 percent, would have a market share in excess of 70 percent. The deal is valued at USD55 million, reports The First Africa Group which acts as an adviser to Diageo, parent of Guinness. The statement said the transaction was subject to corporate approvals as well as certain regulatory approvals....

Heineken pulls out of Angola and Chad or does it?

s SABMiller and France’s Castel Group (wine, beer soft drinks) have begun to gradually integrate their African operations, Heineken N.V. must have felt like the odd one out. That’s why Heineken’s announcement in April to pull out of the beer markets of Angola and Chad took few by surprise. Heineken said that it has signed agreements for the sale of its minority participations in NOCAL and EKA in Angola and of its subsidiary, Brasseries du Logone, in Chad to Brasseries Internationales Holding Ltd, a Gibraltar-registered holding which controls the Castel Group’s beer interests.
Heineken admitted that the decision to divest was based on the lack of a future perspective in both markets.....

The pitfalls of language

And you’d thought that the slogan "it brings out the action in you" was innocent enough? That it did not refer to what others call "horizontal jogging"? Oh ye innocents. You have just fallen into the pitfalls of language. For as long as marketers can think - and that’s quite some time - they have used promotional language that is deliberately loaded and thrives on the three "i"s of Innuendo, Insinuation and Implication. Only the most naive back home in the UK were convinced that the slogan "Guinness is good for you" just meant - well what it said. In the rest of the world consumers knew: wink, wink, nudge, nudge, say no more. For some reason or other Guinness’ marketers have always excelled at this sort of promotional language. Do consumers get the message? Definitely. ....

Moving closer

Expansion is still the rule of the game for Pierre Castel. But in a move that represents a departure from his previous strategy, he now accepts partners. Despite the political and economic risks associated with the North African states, especially Algeria, Castel has managed to extend his joint venture with SABMiller to include Algeria and Morocco. In Algeria, a country of 31 million people, SABMiller acquired a 25 percent direct interest in two Castel carbonated soft drink plants and one brewery, together with a 15.8 percent stake in a second brewery, in which Castel is a majority shareholder. In neighbouring Morocco (30 m inhabitants) SABMiller bought a 25 percent interest in a holding company which has controlling interests in three breweries and a malting plant.3 times sales.....

Patient is sitting up

Sometimes it makes you wonder if the sense of tact has gone out with bowler-hat-and-umbrella-brigade. How are Miller’s employees supposed to feel after SABMiller’s group chairman, the South African Jacob Meyer Kahn, compared the number 2 brewer in the US to a "patient sitting up and taking liquids"? Admittedly, the Milwaukee-based Miller Brewing Co. has not been doing too well in the past. But has Miller fared so badly to deserve such a cruel comparison? According to SABMiller’s interim statement, the group has done very well in the six months to 30 September 2003, when a 32 percent increase in adjusted earnings to USD0.35 a share was achieved.
Turnover at the second-largest beer group in the world was up 59 percent to USD6.3 billion from just under USD4 billion.1 percent..

End of story

It could have been a re-run of the David vs. Goliath story: little brewer takes on giant brewer. Alas, it was not to be. Even before David could aim his shot at Goliath, he stumbled and fell down. As happened to Bavaria Brau, the South African brewer of traditional German type beers that was put in provisional liquidation this year.
Negotiations have taken place between the liquidators of Bavaria Brau, and two parties interested in either investing in the brewery and resuming production or acquiring the company’s assets. The liquidators have until 3 February 2004 to negotiate a deal with prospective investors or buyers of the company.
The brewery (capacity: 50,000 hl p.a. The founder of the brewery, German-born Georg Funk, died earlier this year..

New brooms

Quietly but steadily Heine-ken and UK drinks group Diageo have used their muscles to exert their control over Namibia Breweries. In April they bought an effective 28,98 percent of Namibia Breweries (NBL) from Belgian brewer Interbrew for EUR31 million. Interbrew had "inherited" the stake as part of the Beck’s deal but wanted to get rid of it as the investment did not fit its strategy. For Heineken and Diageo (which owns Guinness) the stake represented an ideal opportunity to gain a foothold in the neighbouring South African market which is controlled by SABMiller. The first significant sign of the new broom at work came in September when long-time Managing Director Bernd Masche was replaced by Marcus von Blottnitz. In 1976 he was promoted to General Manager. The contract expires in 2008..

Black label takes top spot

Carling Black Label, according to AC Nielsen, has knocked Castle Lager off the country’s top selling beer list. Black Label accounts for 33% of total beer sales in South Africa’s ZAR10-billion a year beer market (USD1.4 bn), while Castle Lager accounts for 31%. Another SABMiller brand, Hansa, came in third, with 23% of sales. AC Nielsen believes that an increase in sales of quart bottles and a boost to advertising spending on the brand (from ZAR22 million to over ZAR27 million) contributed to Black Label overtaking SABMiller’s flagship brand, Castle Lager.
SABMiller spent ZAR42 million on advertising for Castle Lager in the first six months of the year..