SA's liquor giants get powerful new rival
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Consumer Industries Editor
CAPE TOWN Shareholder agreements were signed last week to create a new R3bn-a-year sales and marketing joint venture company in SA in which Heineken, Diageo and Namibia Breweries will have equal stakes.
The venture will create a substantial liquor company in SA to rival groups such as South African Breweries (SAB), Distell and KWV.
KWV also said recently it was forming a new sales and marketing division to sell locally its previously export-only wine brands.
The new Heineken-DiageoNamibia Breweries company which is yet to be named will market premium beer brands such as Heineken, Windhoek Lager, Becks and Guinness, as well as spirits brands such as Johnnie Walker, Baileys, Smirnoff, J&B, Gilbeys Gin and Cape Velvet Cream.
Heineken, Diageo and Namibia Breweries said last week that Simon Litherland, MD of Guinness UDV in SA, would head the new company.
Litherland said it was expected that the three shareholders' former businesses in SA would be fully integrated by the middle of this year.
Until May last year, SAB brewed Heineken under licence for the Netherlands-headquartered group, but the agreement was terminated and imported Heineken is now being distributed in SA by Namibia Breweries, which will start brewing it under licence as well.
There has been much speculation, denied by SAB, that Heineken would like an early termination of the contract, expiring in 2008, under which SAB is currently making and selling Heineken's Amstel brand.
At the same time as Heineken terminated the agreement with SAB on Heineken beer, Heineken said it and Diageo had bought an effective 28,9% stake in Namibia Breweries.
The deal was cleared by the SA's competition authorities last month .
Apr 13 2004 07:17:18:000AM Charlotte Mathews Business Day 1st Edition
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