Sunday, June 16, 2024
BusinessHeineken says it will not consolidate the beer market

Heineken says it will not consolidate the beer market

With the local beer market in a stiff competition to interest the pocketbooks of the ever-increasing beer drinking population and BGI Ethiopia scooping little known brands, Heineken Ethiopia has confirmed it will not follow its competitor’s trend and take part in an increasing consolidated beer market.

With BGI Ethiopia in the process of owning brands such as Zebider and Raya, Heineken will have a different strategy to attract the local market, according to Heineken Ethiopia managing director, Gerrit van Loo.

“We will not buy any beer company in Ethiopia,” he told The Reporter. “It is much cheaper to build or invest in our own factories than buy (like BGI)”. He explained that Heineken recently expanded its factory investing much resource at its facility in Kilinto.

BGI, owner of St. George and Castel brands, recently bided for Raya at 2.5 billion birr and for the Zebider brand from Unibar, the Belgium-based company via its owner, The Castel Group, as a strategy uses the factories of these brands instead of constructing new factories to appease the local market.

The Ethiopian local market continues to attract multinationals from abroad following the privatizations of all the beer markets in the nation.

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In a related development, Loo also told The Reporter that Heineken is not interested in purchasing the Asela Malt Factory, which Habesha Brewery offered to purchase it for the sum of USD 42 million, via its sister company Bavaria, last week.

“We bring most of our malt from abroad and there is no need to bid on the factory,” he shrugged.

The Dutch-based company and owner of the Walia, Bedele, Harar and Heineken brands is teaming up with the development arm of the Government of Holland and the Ethiopian government as a strategy to work with local farmers to empower them to be entrepreneurs and have the company buy most of its raw materials locally.

There are now five beer companies operating in the country, including Dashen, BGI, Heineken, Diageo and Habesha, all owned by foreign multinationals.

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