Told you so

Schadenfreude (trans. "malicious glee") may have originated with the Germans, but it seems to be experienced the world over where English is spoken or they would have come up with a term themselves. Anyway, there must have been quite a few people who responded to SABMiller’s full year financial announcement with a hearty laugh, especially when CEO Graham Mackay had to admit at the end of May 2003 that Miller’s problems appear to be deeper than originally thought. Really. Didn’t everybody tell him so? In the year ended 31 March 2003, SABMiller doubled its turnover to USD9.1 billion. Excluding Miller, which has been included for nine months, turnover was 29% higher at USD5.6 billion. Earnings before interest, tax and goodwill amortisation were 66% higher at USD1.27 billion.8%.2%.7%..

Bad press

Looks like SABMiller has had a spell of bad press in recent weeks. At the end of May 2003, the prestigious University of the Witwatersrand sociology of work unit issued a report which argued that the South African food and beverage industry’s social and environmental responsibility programmes had failed to deal strategically with the problem of overcoming hunger in society.
For "South African food and beverage industry" read also "SABMiller". "If anything, the level of retrenchment in the industry is such that the problem has probably become more acute", David Fig, the unit’s industrial psychology professor was reported as saying.
South Africa’s food industry accounts for 14.4%, or 185,728, of manufacturing jobs..

... and ACTION!

"Born for dangerous adventures, bred to take hardship, pain and fearful threats with cold courage, educated to be a gentleman who can mix it with the best and the worst of them - he is the true hero of our day and age." That’s the billing they gave "Bond, James Bond" in 1964. Add 40 years, take away the dry martini and relocated to Africa and you’ve got Michael Power, Africa’s answer to 007. Michael Power, who started out as Guinness’ brand icon in Nigeria four years ago, has been put on a "Critical Assignment" to uncover the truth behind a tale of corruption, greed and deception. It’s probably one of the first films coming out of Africa which openly deals with corruption in high places ... and makes it past the censors. Moreover, Africa is one of the fastest growing markets for Guinness..

Musical chairs

With Norman Adami moving to Milwaukee to take over Miller Brewing Co (see below), his seat became vacant in Johannesburg. But not for long. On 1 February 2003 it was filled by Tony van Kralingen, 44. Van Kralingen has become the new Managing Director of SABMiller in southern Africa. For three years previously, he had been Managing Director of Plzensky Prazdroj in the Czech Republic and responsible for the brand Pilsener Urquell. Under his management, SAB’s market share in the Czech Republic rose 4 percent to 48 percent. Beer output increased from 5.0 million hl to 8.0 million hl. He also initiated the project of having Pilsener Urquell brewed by SAB in Poland, presumably to find out if consumers would accept the brand even if not produced in the Czech Republic..

How long this time

Pepsi Cola might be making a comeback to the South African market after having secured the anchor sponsorship for the Cricket World Cup, which begins in February next year. Negotiations are taking place between Namibia Breweries, which bottles Pepsi at its plant in Windhoek, and PepsiCo with a view to set up a bottling plant in South Africa.
In the past, Pepsi has been bottled and marketed in South Africa three times, but has always failed to capture a viable market share. Its last effort was through a black empowerment group New Age Beverages (NAB), which collapsed in 1997.
NAB set up two plants, one in Germiston and one in Phoenix near Durban..

A sweetener for Mackay

To ensure that he stays with the enlarged group during the period of integration of Miller Brewing Co. with South African Breweries, the SABMiller Chief Executive, Graham Mackay, was awarded 240,000 SABMiller shares, valued at GBP1.0 million, at the end of September 2002. This payment will be over and above the normal remuneration package that he receives. For the financial year 2001, Mackay was paid a basic salary of over GBP 400,000 and was the recipient of various generous share option schemes. Mackay can take ownership of the 240,000 shares after 3 years if SABMiller achieves a total shareholder return above that achieved by a similar group of companies on the FTSE. In Sub-Saharan Africa, beer volumes were up too, with strong soft drink performances in Angola and Zambia..

Softly, softly

Perhaps they have discovered a new, soft approach to product launches. Very quietly and without major advertising in print, South African Breweries launched Sterling Light Lager in the market. Using imported crystal malt, SAB’s product developers have created a full tasting lager, low in both alcohol (2.5% Alc/Vol) and kilojoules (130kJ/100ml). Or so they claim. In any case, Sterling Light Lager has been designed to take on Namibian Breweries’ Windhoek Light which has established a strong niche in the premium segment. SAB’s Sterling Light Lager comes in a pack of four bottles - a first for the South African market place. It also carries the Heart Foundation logo, having met with their requirements for endorsement..

Not for the faint-hearted

Brewers in Nigeria have seen many days of boom and bust. But since Nigeria returned to civilian rule in 1999 for the first time in 15 years, things have steadily looked up for the country’s once depressed breweries, with sales and profits going up despite the introduction of strict Islamic law in the Northern states. With an estimated population of 123 million people, Nigeria is Africa’s most populous country and potentially a huge consumer market - if it were not for innumerable problems.0 million hl of beer sold in 2001.
Since 1999 beer sales have grown according to Nigerian Breweries’ spokesperson Vivian Nkern. Nigerian Breweries’ sales have risen fourfold since 1999, from 1.0 million hl to 4.0 million hl a year, he was quoted as saying. At Guinness there is a similar picture..

And yet another quiet deal in the bar

In an effort to get out of an infight with its former competitor and now partner Castel Group, Cerveias de Moçambique (CDM), 78 per cent owned by South African Breweries (SAB), announced that it was purchasing the controlling interest and management control of Laurentina Brewery from BIH.
The Laurentina Brewery was considered bankrupt. Brasseries International Holdings (BIH), a subsidiary of France’s Castel Group and stakeholder in Laurentina, has decided to pull out of Mozambique as the market of 19 million people with a beer consumption of 1 million hl in 2000 was not big enough to support two brewers. The deal, which has government approval, will avoid financial loss being sustained by all stakeholders.5 %), SPI (5,4 %) and the government (2 %)..

A quiet deal in the bar

South African Breweries (SAB) on 15 May 2002 closed down its brewery in Kenya and bought a 20 per cent stake in rival Kenya Breweries Ltd (KBL), owned by UK brewing giant Guinness/Diageo.
The reason for the shut down? Falling sales. In exchange, East African Breweries (Guinness) will shut its $30m brewery it built in Moshi, Tanzania and acquire 20 per cent of Tanzania Breweries, where SAB has a majority shareholding.
Some 200 Kenyans employed at SAB’s brewery which made Castle lager and several other brands in the central town of Thika close to Nairobi, have been laid off and another 600
in the company’s distribution chain are likely to loose their jobs too.
Actually, Kenya’s beer market has witnessed a massive decline to about 2.4 million hectolitres from 3..