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

Diet Coke decline leaves Pepsi sitting pretty

Last year was tough for The Coca-Cola Co. So staff in Atlanta won't be pleased to read that Pepsi has overtaken Diet Coke as the no. 2 soda brand in the US. ...

BLOG

Net-buster kicks-off Budweiser 'Dream Goal' campaign - video

A bit of football fun for a Friday. Anheuser-Busch InBev has released the ad that will accompany its new Budweiser 'Dream Goal' campaign, that seeks to find the UK's best amateur goal. ...

BLOG

Are New York's craft beer fans any the (Bud)weiser?

No sooner had Anheuser-Busch InBev taken a gentle pop at the craft beer segment during February's Super Bowl, than the world's largest brewer has challenged the sub-category's target market in New Yor...

BLOG

The secret to a long life? Three cans of Dr Pepper a day - video

A few wry grins will have been raised in the offices of Dr Pepper Snapple Group today. ...

just-drinks homepage



Forgot your password?