Because they are able to spend more freely on beer, research company Business Monitor International rates Angola as one of the sub-Saharan beer markets with the best potential for growth.
Diageo, the world's largest liquor company, is the latest to announce a beer deal in Angola. It has signed a five-year agreement with Unicer, a Portuguese brewer operating in Angola, which will manufacture, import and distribute Diageo's beer brand Guinness.
“Unicer is well established in Angola,” says Diageo strategy director Rajal Upadhyaya, “It has a strong distribution network and we think that Guinness will complement their brand portfolio very well.” Unicer's brands include Super Bock, Cristal and Carlsberg.
Diageo is no stranger to Angola, but until now has been present largely through the sale of spirits, Johnnie Walker whisky in particular. It is keen to drive beer sales in Africa. The continent accounted for 39% of its global beer sales in the year to June and is therefore its largest beer market in value terms. “This is the time to invest in Angola,” says Upadhyaya. “Angola is a growing market and already accounts for 7% of the African beer market.”
SABMiller hasn't missed the opportunity either. It operates in Angola through a joint venture with domestic brewer Empresa Cervejas, and is building a new brewing and soft-drinks manufacturing facility in Luanda, Angola's capital. This boosts the number of breweries and bottling plants controlled by the joint venture to five.
Diageo and SABMiller are old rivals. In the fast-growing East Africa region, Diageo is tussling with SABMiller over Diageo's attempts to purchase Tanzanian brewer Serengeti Breweries. SABMiller believes this breaches a sales contract and share-swap deal made between the parties in 2002. The courts have prevented Diageo from concluding the Serengeti purchase until the dispute is resolved. It comes before the International Chamber of Commerce's arbitration panel early this year.
In SA, Diageo and Heineken have entered into a joint venture to build a brewery and bottling plant. A second joint venture, DHN Drinks, distributes and markets beer, “ready-to-drink” beverages and cider on behalf of the parties.
It is a successful partnership which is making inroads into SAB's market share.
In Nigeria, Diageo's Guinness is the undisputed market leader. Nigerians drink more Guinness than the Irish.
However, strength in one market does not guarantee strength in another — each of these markets has its own unique challenges.
“Angola is an unusual market,” says SABMiller spokesman Jonathan Oates. The main challenge is overcoming logistical hurdles. “It has been nigh impossible to import beer into the north of the country. There is no reliable infrastructure from our breweries in the south and the port provides significant logistical issues, with crates regularly spending several months in the system.”
Once its Luanda brewery is up and running, SABMiller expects to gain significant share of the Luanda market, where 70%-80% of consumption occurs.
Source: Financial Mail
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