AFTER importing beer into Namibia for 20 years, SABMiller’s subsidiary in the country is to build a US$34-million brewery north of Windhoek, which stands to enhance its position in South Africa’s neighbour.
SABMiller on Friday signed a shareholders’ agreement with its local Namibian partners in a black empowerment scheme, who will own 40 per cent of the shares in the brewer.The 220 000-hectolitre capacity brewery will produce the Castle and Castle Lite brands, and for the first time the company will be able to include a returnable bottle packaging line and warehousing facilities.SABMiller currently has an estimated 22 per cent local market share in Namibia through brands such as Castle Lager, Carling Black Label, Peroni Nastro Azzurro and Castle Lite.Construction of the brewery starts in the second half of this year.The development echoes that of rival Heineken – which withdrew its Heineken and Amstel brands from SAB and set up its own presence in South Africa – opening a multibillion-rand brewery south of Johannesburg to produce premium beers such as Heineken, Amstel and Windhoek Lager.Absa Investments analyst Chris Gilmour said: ‘In some ways it’s tit for tat. They’ve been wanting to get into Namibia for some time. For the first time, Namibia Breweries will have organised competition in its own backyard.’The battle between SAB and Brandhouse, the joint venture between Heineken, Diageo and Namibia Breweries, is now referred to as ‘the beer wars’, with SAB’s dominance being challenged.Earlier last week, in a trading update, SABMiller said it had increased volumes eight per cent for the fourth quarter of the year ending March. The brewer, which earns more than 85 per cent of its profits from emerging markets like South Africa, Colombia, Poland and China, said its financial performance for the year to end-March was in line with its expectations and was helped by the strength of many of its operating currencies around the world against the dollar.Brandhouse, meanwhile, last week said it had gained an additional 2,7 per cent of the total South African beer market, bringing its market share to 11,3 per cent. This was achieved on the back of Brandhouse’s growth in its beer volume of 28,4 per cent.These figures are for the three months ending February 2010 and are based on new ‘off-trade’ data from research company Nielsen. Off-trade consumption is products bought and taken home instead of being consumed in restaurants or pubs. This puts SAB’s market share at 88,7 per cent and shows Brandhouse gaining market share – at least over the three months ending February. For the year ending February, Brandhouse increased market share 2,2 per cent in the total market.SAB’s sales for the year ending March were down one per cent.Industry insiders say the market has declined on an annualised basis, but grown over the past three months. – Times Live
