Stock markets shrug off brewers’ UK deal

The world’s two largest brewers, Diageo and SABMiller, remain in a strained marriage over the Kenyan and Tanzanian markets for now, even as they announced they had resolved their dispute.

On Thursday, EABL said SABMiller would continue holding a 20 per cent stake at its Kenya Breweries unit, ceded to the London based brewer in exchange for a similar stake at TBL.

Though details of the deal remain scanty, it is emerging that while TBL announced it would cease to distribute EABL products in Tanzania, EABL would manufacture and supply TBL’s beers in Kenya, officials from the two companies said on Thursday.

The announcement, made in a terse statement, raised debate on the amount of information such listed companies should release to the public.

Efforts to get a comment from the Capital Markets Authority on the same were fruitless.

While EABL has the green light to complete its planned acquisition at Serengeti Breweries Limited (SBL), the latter is apprehensive of making known its strategy for the Kenyan market.

“The agreement we have with EABL in Kenya is a separate legal agreement which remains unaffected by the settlement announced yesterday,” said Nigel Fairbrass, head of media relations at SABMiller in the UK.

EABL said it had agreed with TBL that the latter would in the meantime continue manufacturing the products in Tanzania, until such a time that the Kenyan brewer concludes the acquisition of a stake in SABMiller.

“This has to go on until SBL says it’s ready to start manufacturing our brands,” said Ken Kariuki, the corporate affairs director at EABL on phone, adding that the company was targeting a 30 per cent market share in Tanzania.

“In the meantime, we will continue to deal in SAB products in Kenya.”

EABL has courted SABMiller as their sole distributors of all its world-class spirit brands in that country.

The brewers are targeting Africa for growth as demand for their beers rises.

On Thursday, EABL’s share at the Nairobi Stock Exchange remained unmoved at Sh152.

TBL’s share price at the Dar es salaam Stock Exchange remained at Tsh1760.

Bruising battle