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A hard-hit beer sector

A hard-hit beer sector

Late last year a chilly Addis Ababa morning greeted the heads of the breweries as they met a senior government minister. Eugene Ubalijoro was appointed as a spokesperson and tasked with presenting a slew of issues that the executives felt were deterring them from doing business in Ethiopia.

A hard-hit beer sector

 

Among them were new taxes that were to be introduced in mere months, the sudden banning of TV advertisements within a new Ethiopian society that was beginning to see alcohol as hazardous on moral ground. To them, the government was putting little credit in the record amount of money the sector brought to the government coffers and the thousands of jobs the sector has created.

Eugene who started his career with Heineken in 1990 was advised to compare alcohol to khat in explaining their issue. Instead, he felt ridiculed in front of his colleagues when the minister asked him to sit midway and ended the conversation and departed shortly after.

Just a year at the helm of one of Ethiopia’s two biggest breweries, and with a young child at Harvard, he asked to be transferred from a nation that he felt was beginning to punish their success.

Within Ethiopia, Ubalijoro spent his first year trying to understand the new successive laws that were being introduced but he was said to be frustrated.

His former colleagues remember how on his first month at the helm – taking from his predecessor who complained about old debts that were coming to Heineken pre-its enterance to the local market and being forced to pay for them – he looked and sounded confused at a press conference for a Heineken sponsored Aster Aweke concert that started an hour late.

This happened as he tried to figure out if he could even mention Heineken when he spoke and whether he was allowed to advertise the brand and to him, a corporate leader with no road map on how such an important sector should manage its act.

With a planned factory on the horizon and a new brand rumored to be introduced, including the Heineken draft, he felt, while the Ethiopian market presented endless possibilities, the new action by the government presented obstacles and departed, without even completing a second year of what was believed to be a five-year term appointment.

“Eugene, a Rwandan native was excited with the Ethiopian market when he came and saw many similarities between Rwanda and Ethiopia. However, he felt some of the actions of the government were contrary to the interest of the company. He did not want to spend many years in the country with little results when the expectation for his success was much higher,” a former colleague told The Reporter.

At BGI – Ethiopia’s biggest breweries of the best selling St. George beer and Castel beer, the later that has brisk business in Tigray, but little success in the capital, this week, the company introduced a new beer, Doppel – a dark beer that tastes much like Guiness without the strong bitterness local beer drinkers dislike. To help promote the brand, Misikir Mulugeta, a 30-something highly paid former Coca Cola employee and former Marketing Director at Anbesa beer was introduced as the person behind the effort to break from old efforts of introducing new beers that ultimately failed for BGI.

Misikir is known as marketing wiz with big ambition with little success at Anbesa, which has since his departure has shelved his ideas and instead has been promoting the beer as a cheaper alternative sold in makeshift bars and pubs, including those found inside Kebele pubs.

At Anbesa, he was afforded much resource to promote the new beer and brought in talents from abroad, including from South Africa including those laid-off from Ernest & Young and presented iconic advertisements that were forward thinking and made a great impression but poor result.

There was a backlash against it over a symbol that many associated with ‘Satan’ on its bottle wrongly and because he did not have a strategy to fight it, it failed. He left the company and this week, the CEO that hired and so him leave, a former executive at Habesha beer known as a hard worker who hosted bbq parties to promote Habesha also departed.

A new head of BGI, who recently came to Ethiopia as a cost-saving manager to handle the affairs of BGI, that that used to over spent its means, with little resources at hand and forced it to borrow from three different banks to purchase the Zebidar beer two years ago, Misikir became his most expensive star recruit.

At the launch inside BGI this week, inside a new building with few characters associated with a modern building, he arrived belatedly and was personable and excited with what the future held for him and the new beer – Doppel – he has been hired to sell.

“How do you like the beer?” he asked nervously as he went around the pub inside the headquarters of BGI, understanding the probability of success is little with new beers in Ethiopia. After all, the company has tried Amber, Guinness beers in the past to utter failure, only saved by its St. George brand that is the best selling beer in Ethiopia, including the rural parts that BGI transports on the back of donkeys.

There are also challenges with Diageo which owns the Meta brand and where a new generation of beer drinkers associates it with their parent’s generation, not theirs. There has been much effort to make it relevant to them, but it has been a hard sell. Two years ago, it introduced a bigger bottle of Meta as part of its 50th anniversary but that was rejected in the market, with the exception of some butchery restaurants that use it as a mixture for cocktail drinks.

Another brand was also in the pipeline to be introduced by Diageo, a sugary fruity beer named Mench but that failed as well.

In 2018, it also introduced Azmera draft beer, with its ever revolving door with its marketing team a cheaper beer sold at government pubs and was so successful, it was forced to limit its sale to five cups per customer, but that mysteriously disappeared from the market. Its re-introduction of Guinness, taken from a failed trial from BGI in the early 2000 but that was also rejected as it continues to subsidize its dwindling beer business from the sell of its liquor export business that is still strong.

At Habesha beer, its brand has seen some success as well, but with little advertisement on TV with celebrities such as Betty G, its growth has been limited. Last year, it introduced a new non-alcoholic beer, Negus and opened a store to sell its signature accessories it envisioned the public would be interested within its headquarters in Bole, but the store as well as the brand are seeing lower than expected success, giving little dividends to its shareholders this year.