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SAB stems market share losses

South African Breweries (SAB), the South African division of the brewing giant SABMiller (SAB), said on Thursday it had managed to stem the loss of market share to “formidable” competitor Brandhouse Beverages, the owner of premium beers Amstel Lager, Windhoek and Heineken.
Brandhouse, which has about 12% market share, is a joint venture between three global beer companies, Diageo, Heineken International and Namibia Breweries Limited.
Speaking on the sidelines of the Tomorrow's Leaders Convention 2011, the fourth such annual conference, Norman Adami, MD and chairman of SAB, said that, even though the company was confronted with its most serious competitor in decades, it was confident that it could take on Brandhouse. “We think we will be capable to take them on and continue to win against them,” Adami said.
Adami said the local beer market was “always contestable”, describing Brandhouse as a “formidable” company.
Adami said Brandhouse initially banged on SAB's door, demanding 20% market share.
Brandhouse's owners were serious about extracting value from their investments in SA, but noted that SAB was not excited about handing over 20% market share to Brandhouse, he added.
In the past 12 months, Adami said SAB had gained share and clawed its way back to about 89% from about 87%.
Before 2007, SAB had a historical average of about 98%.
In 2007, Heineken NV terminated a contract allowing SAB to produce, market, sell and distribute Amstel lager.
When Diageo, Heineken International and Namibia Breweries Limited re-entered the South African beer market via Brandhouse, they had three established premium beer brands - Amstel, Windhoek and Heineken.
Adami also said SAB was committed to SA, noting that the company planned to invest about 1.3 billion rand in capital expenditure in 2011.
This investment would go into plants, equipment, retailers and trucks.

31 Mar. 2011

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