Global beverage giant Heineken is set to enter the South Sudan beer market after completing the buyout of two Ethiopian breweries, setting the stage for a marketshare war with East Africa Breweries Limited (EABL), which plans to enter that market next year.
Heineken bought the Ethiopian-- Harar and Bedele for $163 million (Sh14.6 billion) and intends to use the two firms as a gateway to the newly independent South Sudan.
EABL plans to build a 700,000-hectolitre plant in Juba next year, opening a new battle front between global brewing giants SABMiller, Heineken and Diageo, which owns a majority stake in EABL.
Heineken’s president in charge of Africa and Middle East Tom de Man said the company’s next target would be the newly independent nation before seeking a piece of the Kenyan and Ugandan market.
“Exporting our beers to South Sudan and other neighbouring countries in the region is in our plan,” said De Man in an interview with the Africa Review, a sister publication.
This will open a fresh round of beer wars in the region that currently pits South Africa’s SABMiller and Diageo through EABL.
South Sudan look set to be the new contest field as SABMiller, which opened a Sh2.9 billion plant in the country in April, doubled the size of its plant to consolidate its presence.
EABL, which exports its Tusker brand to South Sudan, hopes its Juba plant would give it scale and cost advantages as its prepares for a head-to-head battle with SABMiller’s flagship White Bull lager.
Still, it will have to contend with Heineken as the three multinational brewers have been battling for a larger share of the East Africa with their eyes cast on the rising incomes in emerging markets.
South Sudan is a key market for companies with ambitions to cover the entire eastern Africa market.
With a population of 12 million people, the south is on the verge of an oil-fuelled boom in a market without adequate supply to meet the expected demand for beer.
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.
The number three global brewer, Heineken, has been a late entrant into the African market but is racing to build its stake after clinching deals in Nigeria, Rwanda, and South Africa in recent months.
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.