Bidco Africa Group's joint venture has received the go-ahead to fully acquire the company behind the Ribena and Lucozade brands in a deal that will boost the consumer goods company's stake in the soft drinks market.
The Competition Authority of Kenya (CAK) said on Tuesday it had unconditionally approved the proposed acquisition of the entire issued share capital of Suntory Beverage & Food Kenya Limited by Bidcoro Africa Limited.
“This approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for non-alcoholic ready-to-drink (NARTD) beverages, nor elicit negative public interest concern,” said CAK.
Suntory Beverage & Food Kenya Limited, the manufacturer of Ribena and Lucozade soft drinks, is wholly owned by Suntory Beverage & Food Asia Pte Ltd, a beverage and food company with operations in various regions including Europe, Asia, Oceania and the Americas.
CAK's analysis shows that Bidcoro, with a market share of less than one percent, will control a maximum market share of 2.8 percent after the acquisition of Suntory. This will allow it to enter the top five beverage companies in Kenya in terms of market share.
“The parties indicated that the rationale of the transaction is addressing the target's (Suntory) underperformance by leveraging on the acquirer’s (Bidcoro) production and commercialisation expertise,” said CAK.
The NARTD beverages market in Kenya is characterised by a mix of multinationals and local companies, with CAK data showing that Coca-Cola Beverages Africa has a market share of 65 percent, followed by Delmonte Kenya with 5.23 percent.
Kevian Kenya Limited follows with 4.4 percent, while Excel and Predator have 2.87 percent and 2.2 percent respectively. They are followed by Suntory with 1.8 percent, Red Bull (1.7 percent), Highlands (1.7 percent), Brava Food (1.4 percent) and Pepsico with one percent.
Bidcoro has a market share of less than one percent, placing it among the other small players with a combined share of 12.67 percent.
In mid-2020, Bidco opened a $2.5 million (Sh322 million) juice processing plant in Ruiru, Kiambu County, through a 50-50 joint venture with Co-Ro to produce concentrated drinks under the Sunquick brand.
According to research firm Euromonitor International, the Kenyan soft drinks market has recovered from the slump experienced during the Covid-19 pandemic.
“Small local grocers remained the leading distribution channel for soft drinks in Kenya in off-trade volume terms in 2023, followed by supermarkets. Together, they continued to claim the lion’s share of sales, with all other channels holding low single-digit shares,” the research firm said.
