E-Malt.com News article: South Africa: SABMiller bracing up to Heineken challenge

South Africa’s beer giant SAB will use its Carling Black Label brand to fight off the challenge from locally produced Heineken and Amstel, SAB MD Norman Adami was quoted as saying by Business Day on April, 23.

According to the Managing Director, SAB would promote the strength and taste of Black Label, following a strategy that Miller Lite used to win market share from rival Budweiser Lite under Adami’s own tenure as Miller CEO.

“You’re going to see us become increasingly assertive in making sure beer drinkers understand just how good a beer Black Label really is,” Adami said.

Amstel, which since last year has been brewed in SA by distributor brandhouse, a Heineken- Diageo-Namibian Breweries joint venture, is the main brand that SAB’s new local rival is using to fight Castle Lite for beer market share.

In the 12 months to December, Amstel had a 28.9% share of the premium beer market. Castle Lite had one-third of the market, Adami said.

SAB also faces the risk, however, that Black Label drinkers, the predominantly township- based market that is growing in wealth and is highly aspirational, will choose Amstel as their premium beer over Castle Lite.

Since local production started, Amstel is being produced in 660ml bottles that are close to the Black Label 750ml bottles and crucially — because this makes them cheaper — are returnable and fetch a deposit. Heineken bottles are not returnable, limiting their penetration into the township market.

Such is the tension between the two that each has lodged claims against the other with the Advertising Standards Authority — SAB against Amstel and brandhouse against Black Label — for misleading or unfair advertising.

Adami, making his second public address on the new competitive threat in as many months, said SAB had organised blind tastings of its own and rivals’ beers. Black Label, he said, outranked its premium rivals.

Separately, the Competition Tribunal said earlier this week that hearings scheduled for next month into complaints of anticompetitive behaviour by SAB would take place only in August, due to the fact that a number of interlocutory, or technical, matters still needed to be resolved.



23 April, 2010