Blog: Amstel - some home comfort for SABMiller
Olly Wehring | 14 March 2007
The loss of the Amstel licence in South Africa to Heineken is a blow to SABMiller in a market that accounts for almost a third of its annual profits.
However, investors may have been a tad hasty in hitting SABMiller’s share price when the transfer of the licence was announced yesterday (13 March).
SABMiller has time on its side to rebuild its presence in South Africa’s booming premium beer segment while its Dutch rival frantically builds a brewery in the country to enjoy the full benefits of Amstel’s standing in the market.
Some 2.5m hectolitres of Amstel are sold in South Africa each year and the high margins commanded by the brand have boosted SABMiller’s earnings while mainstream beer sales remain flat.
When Heineken gets its South African brewery up and running – within two years, it hopes – it will have made something of a dent in SABMiller’s almost complete dominance of the market.
In the meantime, however, Heineken will find it tough to generate any money from selling Amstel in South Africa. Some 80% of all beer consumed in South Africa is sold in returnable bottles, which means Heineken needs a direct manufacturing presence in the market to sell and collect them.
And while Heineken and its venture partners Diageo and Namibia Breweries are busy turning the South African soil, SABMiller is well-placed to benefit from its knowledge of the local market, its distribution muscle and its global beer portfolio to bolster its position in the premium beer segment.
I've stopped short of covering it as a product launch story on just-drinks, but take a look at this. Released this month in the UK, Snuffle Dog Beer is already available in 25 markets....
PepsiCo received high praise when it announced it was to launch its stevia-based Pepsi extension True exclusively on Amazon in the US....
Sean 'Diddy' Combs, the US rapper and entrepreneur, has publicly turned against his apparent former favourite Tequlia brand, Patron, now that he is joint-owner of DeLeón Tequila....
The Coca-Cola Co has spent a lot of money recently fighting accusations that soft drinks make you fat....
- Coca-Cola pressure builds as bid rumours swirl
- Gin: Plymouth's from Plymouth, London's from...?
- Comment - IPO Launch a Tonic for Fever-Tree
- Fireball Recall: Putting Out Fire with Anti-Freeze
- Why Chinese beverages won't conquer the world
- NPD - Moët Hennessy’s Glenmorangie Dornoch
- Anheuser-Busch InBev cuts jobs in US shake-up
- Diageo targets Millenial women with Baileys push
- Pernod blames rule changes for Plymouth GI drop
- William Grant unveils bespoke Glenfiddich website
- Early Signals: future scenarios that will drive consumption and product innovation over the next five years
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Beer Opportunities: Beyond Standard Lager
- The IWSR Global Trends Report 2014
- Global Cognac insights - market forecasts, product innovation and consumer trends research