AFRICA: SABMiller gets duty deal for cassava beer launch

SABMiller hopes to lure more African consumers into beer after securing a cut-price tax deal to produce a beer using local cassava in Mozambique.

Impala is the first commercial-scale beer that is made predominantly from cassava, SABMiller claimed today (1 November). Launched this week in Mozambique, the beer will benefit from reduced duty tax in recognition of SABMiller's decision to source cassava from within the country and also the beer's potential to draw more consumers out of illegal alcohol.

The Peroni brewer said that Impala, which is 70%-cassava based, will retail at around 70% of the price of mainstream lager in Mozambique. Earlier this month, SABMiller identified Mozambique as one of nine African countries that, collectively, contain US$3.7bn in untapped retail beer sales, largely because many consumers stick to homebrews and cheap spirits.

"We estimate that the volume of the informal, unregulated alcohol market across Africa could be up to four times that of the formal market," said SABMiller's MD for Africa, Mark Bowman, today. "By using locally-sourced raw materials, we are able to create high-quality, affordable products for consumers who would otherwise be drinking informal or illicit alcohol."

Higher returns and employment in cassava cultivation could also create a new consumer base in Mozambique. Approximately 40,000 tonnes of raw cassava will be used annually in the production of Impala, creating employment for around 1,500 smallholder farmers and their families, SABMiller said. It said that Mozambique has the potential to produce "more than enough" cassava for both consumption and brewing.

Mozambique's per capita beer consumption is eight litres, just below the average for Africa as a whole and in contrast to per capita consumption of 60 litres in neighbouring South Africa. 

Local sourcing of raw materials has been a key SABMiller strategy for the past three years. It sees the policy as a win-win for all players, in terms of lower production costs for itself and a helping hand for local agriculture in developing countries. In December 2008, the brewer said that, by 2012, it aims to increase the number of smallholder farms it uses for raw materials by 15,000 worldwide. 

In Mozambique, the brewer has worked with the Dutch Agricultural Development and Trading Company (DADTCO) to develop a new mobile processing unit for cassava. DADTCO will manage cassava collection and payments to farmers, and is also working in tandem with not-for-profit organisation IFDC in order to improve farming methods and yields.