The world’s third- and sixth-largest beer producers nudged one another recently, the immediate fallout being that Amstel drinkers may have to switch brands, at least for a couple of months.
SABMiller has been brewing Amstel for 40 years, but the brewery announced recently that it has stopped production of the premium beer brand following an announcement by Heineken that it was cancelling SAB’s licence to manufacture Amstel in South Africa.
The move follows a private arbitration held recently to determine whether Heineken could invoke a term of the agreement entitling it to terminate the decades-old Amstel trademark licence agreement.
Amstel accounts for 9% of the South African beer market, while Heineken hold a 2% share. Amstel included, SABMiller lays claim to 96% of the local beer market.
In the past financial year, Amstel generated revenue of $300million in South Africa, with a before-tax profit of $80million. At present, Heineken is the world’s third-largest brewer, with SABMiller in sixth position.
SAB spokesperson Michael Farr told the Mail & Guardian this week that there is enough Amstel in South Africa to last another 10 days.
Heineken did have the option to take all of SABMiller’s Amstel stock off its hands, but chose not to. Instead, Heineken informed the South African brewer that it had three months to sell off excess stock.
The cancellation of the licence, however, does not mean that Heineken can quickly up its market share by 9%.
Heineken has confirmed that Brandhouse Beverages, a Cape Town-based company, will be importing Amstel into South Africa for the next two years. Heineken should have its own brewery up and running in South Africa by then.
The first shipment of Amstel cans is only expected to arrive in three months’ time, and bottles in five.
“Consumers will be disadvantaged. There will be no Amstel after our stock runs out in 10 days,” said Farr.
SAB is confident that it will recoup some of the volumes lost owing to the departure of the Amstel brand, by increasing the number of brands offered locally.
“Luckily, we are part of the SABMiller group and so we have 150 international brands,” said Farr. “We have a lot of initiatives planned for the year ahead to introduce new brands.”
SAB is reported to be planning to capture a large portion of the Amstel market with premium beer brands such as Peroni and Pilsner Urquell.
Analysts have suggested that this move by Heineken is significant because the premium beer market has seen the most growth in South Africa in recent years.
SABMiller has suggested that Heineken was unhappy that its profits in South Africa were helping to fund its expansion internationally, and that this move is an attempt to decrease those profits.
Heineken spokesperson Nathalie Grotenhuis said the Dutch-based brewer will do everything it can to minimise disruptions to Amstel supply, but confirmed that the first imported batch is at least two and half months away.
What’s in an amstel?
In an attempt to get to the bottom of Amstel’s popularity, the Mail & Guardian decided to put Amstel beer drinkers to the test.
The Mail & Guardian Online news department agreed to help us out as we pitted Amstel against other SAB premium beer brands Pilsner Urquell, Peroni and Hansa, as well as Namibian beer Windhoek. M&G Online news editor Matthew Burbidge and Dutch intern Thijs van der Post were confident that, blindfolded, they could identify Amstel from its competitors.
First our contestants were given Pilsner Urquell. Both agreed that it definitely was not Amstel, with Burbidge suggesting that it could be Hansa.
Second was Peroni, which Burbidge also thought was Hansa, but after a second taste he correctly identified it as Peroni.
Windhoek and Hansa were given an overwhelming thumbs down, which led us to Amstel.
Burbidge was convinced from the first taste; Van der Post was doubtful. He chose to have another taste of the Urquell before declaring that the Czech beer was Amstel.
Our Dutch beer drinker was horrified to find out that he had chosen the wrong beer, having earlier proclaimed proudly that if there was anyone qualified to identify an Amstel, it was him.
Van der Post’s error of judgement raises the question whether Amstel from Holland tastes the same as the South African variation.
I know from my travels to Amsterdam that it was definitely not the South African version of the beer to which I had become accustomed. — Lloyd Gedye