Heineken takes on SAB in SA

Johannesburg - Heineken’s recent introduction of Sol Mexican lager to South Africa forms part of a plan to boost its market share in a country dominated by soon-to-be-acquired SABMiller [JSE:SAB].

The Dutch brewer brought Sol to South Africa this month and plans to add more premium brands here, country head Ruud van den Eijnden said in an interview on Tuesday. Growth will also be achieved through established brands such as Heineken, Amstel and Windhoek, he said.

“South Africans love premium beers, with 39% drinking them on a regular basis,” Van den Eijnden said. South Africans spent more than R103bn ($7.1bn) buying beer in 2015, an increase of 9.1% from a year earlier, according to researcher Euromonitor International.

Heineken took full control of its South African operations in April after dissolving a joint venture with Diageo. Its share of South Africa’s beer market has remained at about 10% over the last five years, dwarfed by SABMiller’s 80%.

SAB’s imminent takeover by Anheuser-Busch InBev [JSE:ANB] will give the brewer access to more global brands and make competition even more intense, Van den Eijnden said.

“SABMiller is already a formidable competitor,” he said. “Its new parent company has even more financial firepower than SAB, so in that sense I think competition will intensify.”

Heineken has added 300 jobs in South Africa this year, with 95% of these in its sales department, doubling its local sales team, Van den Eijnden said. That has improved its ability to stock shelves and increase product sold, he said.

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