E-Malt.com News article: South Africa: Heineken may open South African brewery

Dutch brewing force, Heineken N/V is considering whether to build a brewery in South Africa, prior to the expiry of a license there for its second brand, Amstel, now held by SABMiller. Heineken officials said recently that a decision was likely before the end of 2006, according to Reuters’ communication from June 1.

South Africa is the continent's biggest beer market, with annual consumption of more than 26 million hectolitres -- more than twice global production of the Amstel brand. "Heineken, with its partners Diageo and Namibia Breweries, will decide within the coming year how to expand further into South Africa," an official said on Wednesday.

Since late 2004, Namibia Breweries has made Heineken for Namibia and exported to South Africa. Heineken has licensed its Amstel brand in South Africa to SAB and this license expires in late 2008.

While SAB has in the past expressed an expectation that the license will continue, the Heineken official said that "currently there are no discussions with SAB on the (dis)continuation of the license."

Last year, Heineken teamed up with Diageo and Namibia Breweries in a joint venture for South Africa under the name "Brand House." Heineken and Diageo have a combined 28.9 percent stake in Namibia Breweries.

The Brand House venture involves the Windhoek, Heineken, Guinness and Kilkenny brands.

The Heineken group sold 11.1 million hectolitres of Amstel beer worldwide in 2004, compared to 22.8 million hectolitres of Heineken-branded beer, and sub-Saharan Africa is among the biggest growing markets for Amstel, it said in it annual report.

SABMiller, the result of the 2002 buy by South African Breweries of Miller Brewing Co., controls almost 98 percent of the beer market in South Africa and 70 percent of the premium market, partly due to the sales of Amstel.

Leading U.S. brewer Anheuser-Busch Cos Inc. relaunched its Budweiser brand in South Africa in late 2003.


02 June, 2005