Sedibeng brewery comes on stream

SABMiller has a fight on its hands in the premium beer market and the battle was intensified this week with the official opening of the Sedibeng brewery.

Sedibeng, with a capacity of three-million hectolitres, is a joint venture between Heineken and Diageo Holdings, and cost R3,5-billion to construct.

While it is running at full capacity, volume is expected to be increased to four-million hectoliters by September 2010.

It will be responsible for brewing Amstel, Heineken and Namibian Breweries’ popular Windhoek brand as well as Smirnoff Spin, Smirnoff Storm and Strongbow Cider.

In March 2007, Heineken took on SABMiller on its home turf by winning back the right to brew and distribute Amstel in South Africa, which had previously been held by SABMiller.

This was followed by the announcement that it would be building the Sedibeng brewery, south of Johannesburg.

Absa analyst Chris Gilmour said the loss of Amstel had hit local subsidiary SAB SA hard in the premium beer market, which has a nice fat margin compared to the non-premium beer market.

However, he stressed that we had yet to see a major face-off between Heineken and SAB in the country.

SAB SA has been in decline of late, with margins being squeezed from 25,8% in 2007 to 19,3% in 2009. With the increase in competition, these margins will come under even more strain.

Market figures from September 2009 revealed that Brandhouse — a joint venture between Heineken, Diageo and Namibian Breweries — had managed to raise its share of the premium beer segment to 55%.

Heineken’s share of the premium segment was 12,98% at the end of September, up from 8,73% in 2007.

Johan Doyer, managing director of Sedibeng, said the new brewery had been completed three months ahead of schedule, with the brewing of Amstel, Windhoek and Heineken beginning in September, October and December 2009 respectively.

Sedibeng has also introduced a returnable bottle for Amstel.

Gerald Mahinda, managing director of Brandhouse, said that the returnable quart segment comprised the overwhelming share of the local beer market.

“Our ability to offer our customers our premium product in this format will enhance our capacity to meet consumer demand,” said Mahinda.

Diageo’s CEO Paul Walsh signified the joint ventures intentions by claiming that it aimed to be the best premium drinks company in South Africa, while Heineken’s CEO Jean-Francois Van Boxmeer said the new brewery was all about competing with the 800-pound gorilla – SABMiller.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Lloyd Gedye
Lloyd Gedye
Lloyd Gedye is a freelance journalist and one of the founders of The Con.

Related stories


Subscribers only

Poachers in prisons tell their stories

Interviews with offenders provide insight into the structure of illegal wildlife trade networks

Covid-overflow hospital in ruins as SIU investigates

A high-level probe has begun into hundreds of millions of rand spent by the Gauteng health department to refurbish a hospital that is now seven months behind schedule – and lying empty

More top stories

The politics of the Zuma-Zondo showdown

Any move made by the Zondo commission head or by former president Jacob Zuma must be calculated, because one mistake from either side could lead to a political fallout

Museveni declared winner of disputed Uganda election

Security personnel out in force as longtime president wins sixth term and main challenger Bobi Wine alleges rigging.

Pay-TV inquiry probes the Multichoice monopoly

Africa’s largest subscription television operator says it is under threat amid the emerging popularity of global platforms like Netflix and Amazon Prime

​No apology or comfort as another Marikana mother dies without...

Nomawethu Ma’Bhengu Sompeta, whose funeral will be held this weekend, was unequivocal in calling out the government for its response to the Marikana massacre

press releases

Loading latest Press Releases…