Africa
Regional Review
Africa/Middle East
Group volume
Africa/Middle East
in millions of hectolitres
13
12
11
10
5
3
oi
CD
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O l CM CO
O O O O
O O O O
CM CM CM CN
Operations
Heineken owns a total of 26 breweries in
11 African countries and is active in other
countries via its own sales and distribution
organisations or through distribution
partners. The Heineken breweries in
several African countries have substantial
market shares. As well as local brands,
Amstel beer is brewed in some countries,
and most of the operating companies also
produce and market soft drinks. In several
countries, the Heineken, Amstel and
Mützig brands are brewed under licence
and marketed by third parties. Heineken
beer is imported on a modest scale.
The Heineken brand has good growth
potential particularly in Nigeria and South
Africa.
In 2003 Heineken and Diageo together
acquired a 28.9% stake in Namibia Brew
eries, the country's only brewer, which has
been distributing imported Heineken beer
in the region since May 2003. Namibia
Breweries, which also has an excellent
distribution network in South Africa, is to
start brewing Heineken under licence for
the South African market. Heineken's
licensing agreement with SAB for the
production and distribution of Heineken
beer in South Africa was terminated in
2003. The new arrangement will provide
a good basis on which to build sales of the
Heineken brand in South Africa.
Agreement in principle was reached in
December 2003 on the merger of Ghana
Breweries, in which Heineken has a major
ity interest, and Guinness Ghana, in which
Diageo holds a majority shareholding.
The combined company, Guinness Ghana
Breweries, in which Heineken will have
a 20% stake, is expected to be more
profitable. The merger is still awaiting
a number of approvals.
Market conditions
Although most countries were more
politically stable, the position remained
vulnerable. The aid and bilateral aid
programmes for the Central African
countries were resumed by the World
Bank, the IMF and private-sector organi
sations. Slight to modest economic growth
was achieved in the countries in the
south of the continent, but private-sector
investment generally was lower, which
meant no improvement in consumer
purchasing power. In addition, a large
share of disposable income is now being
spent on mobile phones, which are gaining
rapidly in popularity.
Performance review by country
In Nigeria the sales volume reported by
Nigerian Breweries was sharply higher, up
from 4.6 million hectolitres to 5.7 million
hectolitres, but the result was lower due to
the weakness of the naira against the euro,
lower prices reflecting a healthier balance
between supply and demand, higher
pension charges, non-recurring write-
the Middle East. Beer sales in Africa
and the Middle East increased from
10.6 million hectolitres to 12.7 million
hectolitres. Sales of Heineken beer
in Africa and the Middle East were up
5% and Amstel beer sales were 15%
higher. Heineken brand sales recorded
the fastest growth in South Africa.
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