Blog: Olly WehringAmstel - 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.


BLOG

Make way craft, here come the indie brewers

Could it happen? According to this report, a section of the beer community wants to ditch the word craft. They prefer instead the term “Indie” for brewers they believe follow the enlightened path of t...

BLOG

Kent's dire warning puts Coca-Cola woes in the shade

The global elite were in Switzerland last week for the World Economic Forum in Davos, the annual corporate huddle for the rich and powerful. The CEO of The Coca-Cola Co, Muhtar Kent, was there too, de...

BLOG

PepsiCo wakes up and smells the latte

With The Coca-Cola Co stealing yesterday's limelight with its new united marketing strategy for brand Coke yesterday, a Forbes interview with PepsiCo North America Beverages' new CMO, Seth Kaufman, sl...

BLOG

Coke Life threatens Coca-Cola's united front

It is a bold attempt to regain a measure of control in the ever-spiraling debate about sugar. But will The Coca-Cola Co's new marketing strategy - which for the first time ties all of the Coke family ...

just-drinks homepage



Forgot your password?