South Africa, Johannesburg: Drinks giants Diageo and Heineken launched a joint venture in South Africa on July 6 along with regional partner Namibia Breweries. The new venture said in a statement that it would trade under the name "brandhouse" and would have annual sales of around 3.0 billion rand ($485 million), Reuters revealed.

The three companies decided to combine their South African marketing and distribution operations after Heineken and Diageo bought a combined 28.9 percent stake in Namibia Breweries in 2003. The joint venture will compete with the mighty South African Breweries unit of global beer giant SABMiller, which controls more than 98 % of South Africa's beer market.

The lucrative and fast-growing premium beer sector is much more open than the wider beer market, but SABMiller still controls more than 70 percent of the premium sector, thanks mainly to a contract to brew Heineken's Amstel brand beer in South Africa. "South Africa is an incredibly exciting market for us. Overall growth in the liquor industry has been minimal for some years now, but the premium sector is growing very fast," brandhouse Managing Director Simon Litherland said in a statement. "Through our unrivalled portfolio of premium brands and our global experience in this sector, we are very well positioned to take full advantage of the opportunities the market presents."

Among the best-known brands the joint venture will market and distribute are Windhoek, Heineken, Guinness and Becks beer, Johnnie Walker and Bell's whisky and Smirnoff Vodka. ($1=6.186 Rand)

09 July, 2004