E-Malt.com News article: 1906

Bulgaria, Sofia: A two-member team from South African Breweries-Miller, one of the biggest breweries in the world with multinational operations, is exploring four Eastern Mediterranean countries in the first stage of deciding whether to enter their markets, according to Sofia Eco Com’s report from December 05. The four countries are Bulgaria, Greece, Cyprus and Lebanon. It is possible that Serbia-Montenegro may be added to the list. Philip Nieman, SAB head of exports and international marketing, and Charl Bassil, new market development manager, emphasized that their tour was a tentative, fact-finding mission. While SAB Miller has a European division, the two are looking at countries "not yet part of the SAB Miller family," Bassil said.

Becoming part of the SAB Miller family so far has meant the brewer investing in beer production within a new country. The option being explored by Nieman and Bassil is entering the market by selling brands, which have already proved popular in South Africa and elsewhere. In this case, these are Castle beer, Redds beer, and Brutal Fruit, a fruit juice-based alcoholic drink launched recently in South Africa and that has proved a runaway success among younger adults.

Interviewed in Sofia, Bassil said his first impressions were that the Bulgarian market was a tough one to enter, given the existing presence of Heineken, Interbrew, and Carlsberg - brewers that came to Bulgaria after the fall of communism 13 years ago - as well as solidly-established traditional Bulgarian brands. But, he said, it was possible that the youth market in the country would be looking for something new and exciting, and in this case Brutal Fruit would fit the bill. Nieman added, "there does seem to be an intense battlefield on the (Bulgarian) market"

As to the question of distribution of products that would enter as niche brands, there were the lessons learnt in other countries, including the UK, Australia and elsewhere, where SAB products had been sold through major supermarket chains. In Africa, the structure of distribution worked differently. Bassil said they were not intimidated by talk of vested interests in the liquor sale and distribution market, even those said to be linked to organised crime.

Exploration of the Bulgarian market was being done at the suggestion of the South African trade attache in Athens. "Consumption (in Bulgaria) per capita is high, and there is a place for a really affordable brand. Castle, therefore, has a place," Nieman said.

At a presentation in Johannesburg on November 21, SAB Miller chief financial officer Malcolm Wyman said the group's interim performance to September showed a 32 % increase in adjusted earnings. The group's good performance was the result of the combination of an excellent performance from its European operations, strong results from Beer South Africa, generally strong contributions from all its businesses outside the US, and favourable currency movements.

Turnover at the second-largest beer group in the world was up 59 % to $6.4 billion from just under $4 billion, Wyman said.

Meanwhile, following a shareholders' meeting on November 28, the go-ahead has been given for the merger of the Bulgarian breweries Zagorka and Ariana, under the banner of Zagorka. The merger will take effect on December 31. No jobs will be lost. The major shareholders in Zagorka are Coca-Cola and Heineken.


10 December, 2003