E-Malt.com News article: 1751

The fierce competition between Namibia Breweries and SABMiller made the two breweries repackage and launch new brands, Business Report posted on October 31. “The premium beer category in South Africa had become the object of intense competitor activity since the group gained the distribution rights to the Heineken brand,” Lionel Matthews, the financial director of Namibia Breweries, said on October 30

Namibia Breweries, which also exports much smaller volumes to the UK, southern Africa and Europe, struck a partnership with Heineken in May to distribute in South Africa, the report said. The move has led to SABMiller, the previous distributor of Heineken Lager, introducing new brands such as Miller to compete with Heineken and Windhoek Lager. In response, Namibia Breweries has invested heavily in the new packaging of Tafel and Windhoek, its premier brands. Although Matthews would not say how much had been invested in this process, he said the investment associated with the new packaging had not been fully recovered in the single price increase. "The price increase of the Windhoek range to reflect its prime positioning impacted upon initial volume growth, but value growth was within expectations," he said.

However, the fight with SABMiller is not a big factor in the group's less-than-impressive interim results, the press released. High import levies imposed by the Angolan government hit beer volumes and almost halved attributable profit to R8.3 million for the six months to July. This translated into a 53 % drop in earnings a share to 4.06c.

Matthews said the import duties, which began to hit the business in February and March, had caused volumes to decline by 44.9 %. "Since the Angolan market represents more than 90 percent of the group's export volumes, excluding South Africa, the decline in volumes had further caused pressure on working capital, supply chain costs and an overall increase in production overheads per unit," he said.

Regularising cross-border trade between Angola and Namibia had taken longer than expected but the board of Namibia Breweries was working with the Angolan government to finalise the bilateral trade agreement, he said. The group's prospects for the full year do not look promising, as the Angolan situation is not expected to be resolved soon.


03 November, 2003