It seems like there will be soon some serious beer action in Africa’s most populous country, where Guinness and Heineken are calling the shots - so far. Guinness, through its 53% stake in Guinness Nigeria, and Heineken, which owns 40% of Nigerian Breweries, control the market. South African Breweries, which sold 25.1 million hl of beer in South Africa, still has no brewing plant in Nigeria but is already exporting beer there from South Africa.
Nigeria was once considered Africa’s most interesting beer market. In the late 1970s, consumption was 12 million hl when the economy prospered thanks to the high oil revenues. In sync with falling oil prices, consumption dropped below 4 million hl in the 1980s. In addition, Heineken plans to buy Con-solidated Breweries Ltd..

Mike Simms, Chairman of South African Breweries’ soft drinks division, will become Managing Director of SAB Europe. Before he chaired the soft drinks division, Simms spent 12 years in SAB’s South African beer division.

Namibian Breweries has entered into a joint venture with Beck & Co. Export Brewery of Bremen/Germany. Together, they want to wrestle market shares from the South African South West Breweries brewing giant.
The success of Namibian Breweries (NBL), a publicly quoted company for the last three and a half years, is really impressive. In the 1998/99 fiscal year, turnover (57 million US $) rose 28% compared to the previous year.
The brewery produces 1.4 million hl of beer per annum. NBL has a type of monopoly position in Namibia (91% market share). As the domestic market has only 1.6 million people, it is not large enough to ensure survival of the brewery so that footholds in neighbouring African countries have to be established.
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Brauerei Beck and Namibian Breweries announced that they will set up a joint venture, with Ohlthaver & List, Namibian Breweries’ parent company, controlling the majority stake. Brauerei Beck’s involvement in southern Africa is to help Namibian Breweries to continue on its fast growth track. Dieter Ammer, Managing Director of Beck, said his company would support Namibian Breweries with capital and know-how. No figures were disclosed. Namibian Breweries will brew and distribute Beck’s under licence. With Beck’s, Namibian Breweries stocks up its portfolio of international premium brands which includes Holsten and Guinness, for the quickly expanding South African premium beer segment.

South African Breweries (SAB) and Castel Group have joined forces to boost their position in the African beverage markets. SAB will take a 20% stake in Castel’s beer division, CBB, and Castel will buy 38% of SAB’s African division, SABI. SABI has transferred US$73m of net assets to Castel and CBB US$64m to SABI. The alliance took effect on 1 April 2001. The alliance makes sense if seen against the partner’s geographical investments. Whereas SABI’s operations are mostly concentrated in southern and east Africa, CBB’s operations are located in west and central Africa. In 2000, Castel had a total beer output of 9.1m hl. For the year ended 31 March 2000, SABI produced 13.9m hl outside South Africa.

In March, Distell, the new South African drinks group, launched itself officially by getting listed on the Johannes-burg Stock Exchange’s Security Exchange. This followed the merger of Distiller’s Corporation and Stellenbosch Farmers’ Winery in 2000. Distell claims to be the tenth largest drinks company in the world.
The merger was met with opposition from Bulmer SA and Seagram Africa that tried to stop it through an interdict through the Cape High court. Both parties argue that the merger is notifiable in terms of the Competition’s Act. Distell, on the other hand, insists that the voting pool made up of South African breweries, KWV and Rembrandt, each with a 30% stake in the former companies, exercise the same authority in the new company. Distell has an assets base of R3..

Irrespective of a recent decline in beer sales, South African Breweries (SAB) officially opened its new Ibhayi Brewery near Port Elizabeth to the east of Cape Town. It took 18 months and R650m (US$81m) to build the brewery. The brewery which is fully automated, has a production capacity of 2.3m hl annually. It is set in an area of an extremely high unemployment rate.

What do you do with a well-known consumer brand which follows the law of gravity and fails to perform as desired? You sigh resignedly and then spread the cloak of oblivion over it, as did Detroit-based General Motors Corporation? In December, the US car maker decided to discontinue the Olds-mobile brand after decades of pummelling and cajoling and had done nothing to fight the consumer’s growing ennui with the Oldsmobile brand.
Now there are quite a few tired old beer brands out there too. Take the saga of South African Breweries (SAB) and the new improved Lion Lager, for example. Lion Lager, once the pride of certain segments of the South African society, has seen volumes decline rapidly during the 1990s. In 1999 only slightly more than 3m hl of Lion Lager were sold....

The African beer market has large untapped potential. At a time when the dominant market on the continent, South Africa, is contracting, the second largest market, Nigeria, has big growth opportunities, a population of 120 million with a per-capita consumption of only 5.25 l of beer per annum (a total of 6.3 million hl), compared to South Africa’s 60.47 l per-capita per annum (43.0 million hl).
The size of the African beer market is estimated to be about 62.1 million hl at present. South African Breweries (SAB) are the uncontested market leader, producing 31.8 million hl (25.1 million hl in South Africa alone). Second place is taken by BGI of France (8.1 million hl), followed by Heineken (7.7 million hl) of the Netherlands and Guinness (6.2 million hl) of Britain..