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Heineken sparks beer wars with Nairobi office

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Dutch brewer has been supplying its beer in the Kenyan market through a local distributor

Dutch brewer has been supplying its beer in the Kenyan market through a local distributor 

By WANGUI MAINA

Posted  Tuesday, November 29  2011 at  00:00

Global beverage giant Heineken has opened a regional headquarters in Nairobi to help push its brands in the market, setting the stage for a market share war with East Africa Breweries Limited (EABL) and SABMiller.

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The Dutch brewer supplies its Heineken beer in the Kenyan market through local distributor Maxam Ltd, which is associated with businessman Ngugi Kiuna who has held the franchise since 2007.

Heineken, which recently bought breweries in Ethiopia and Rwanda, has now established a regional office in Nairobi that will be headed Koen Morshuis, general manager East Africa — signalling its intention to get a larger share of the East African beer market. This will open a fresh round of beer wars in the region that currently pits South Africa’s SABMiller and Diageo through EABL. “After doing research we saw the results and think it’s time to put people here (Nairobi office) and we shall have a huge marketing push,” Morshuis who moved in Kenya from Vienna where he was Heineken’s marketing manager for central and eastern Europe.

Brewing giant

“This office will look at the East African region which includes Kenya, Tanzania, Uganda, Southern Sudan, Ethiopia, Somalia, Djibouti, Madagascar, Comoros, Seychelles and Eritrea.”

He added that the Dutch brewer unlike its rivals will continue to feed the Kenyan market with beer imported from Europe, adding that the brewing giant will continue to work with Maxam in Kenya.

East African market is increasingly becoming a battle zone between SABMiller and Diageo led EABL as both firm’s proactively race to grow their regional footprint. Already, a vicious battle for market dominance is under way in Uganda between Uganda Breweries, owned 98.2 per cent by EABL, and Nile Breweries, which SABMiller owns 60 per cent. In Tanzania, Diageo through EABL ended a partnership with SABMiller over the running of Tanzania Breweries Limited and bought a majority stake in rival Serengeti Breweries last year.

This has set off a vicious market share war between the hitherto business partners as global brewers seeks a larger foothold in emerging markets where beers sales are still on the up.

Heineken’s aggressive African strategy, especially in Anglophone countries, is set to open a fresh round of beer wars in the continent. (READ: Heineken opens new round of beer wars with EABL)

It joins a long list of multinational’s including Airtel, Nestle, Coca Cola that have established their regional headquarters in Kenya.
The number three global brewer, Heineken, has been a late entrant into the African market but is racing to build its stake after clinching share deals in Nigeria, Rwanda, South Africa and Ethiopia in recent months.

Heineken bought Ethiopian Harar and Bedele for $163 million (Sh14.6 billion) mid this year and intends to use the two firms as a gateway to the newly independent South Sudan.

pmaina@ke.nationmedia.com