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Brewing giant SABMiller said that Dutch rival Heineken's decision to terminate its South African subsidiary's licence to manufacture and distribute Amstel Lager with immediate effect would cost it about R6million in profit.
Heineken said late Monday that it had decided to construct a brewery in South Africa - where SABMiller has a 98percent share of the beer market - and until the new brewery was built, Amstel beer would be sourced from its breweries in Europe.
"Strategically it is a major problem. They [SABMiller] are losing market share in the premium beer market in South Africa, which is the fastest-growing market in the country," Investec Asset Management portfolio manager Rob Forsyth said.
"It also gives its competitor, Brandhouse, a bigger share of the market with Heineken, Amstel and Windhoek brands."
Heineken said that Amstel would be marketed, sold and distributed in South Africa through Brandhouse Beverages, the Cape Town-based joint venture bet-ween Heineken, Diageo and Namibia Breweries.
SABMiller, which makes Black Label, Castle and Miller beers, said that the termination followed an arbitration ruling that found that its 2005 purchase of Bavaria in Colombia constituted a material change in shareholding of SABMiller, which could be re-garded as detrimental to the interests of Heineken.
The brewer announced in July 2005 that it had taken a 71,8percent stake in brewer Bavaria for $7,8billion before buying an extra 25,2percent for $1,22billion in a tender that left it owning 97percent.
The group said that Amstel currently accounts for about 9 percent of beer sales in South Africa, but it hoped to replace some of this with sales of its own premium bottled beers. - Reuters