As Amstel takes time to relaunch, SAB cashes in, pushing new brands

Staff Reporter

Staff Reporter

By rushing Hansa Marzen Gold to the market while Amstel's new local agent Brandhouse got off to a slow start, SABMiller halved the potential damage from losing South Africa's best selling premium beer brand.

SABMiller said in a trading update yesterday: "The reintroduction of the Amstel brand following the contract termination earlier this year appears to have been delayed, limiting the anticipated financial impact to $40million-$50million (about R280million-R350million) in the current year."

Amstel's owner, Heineken, terminated SABMiller's licence to brew and sell the brand in South Africa earlier this year after the global brewing giants clashed in South America.

In March, SABMiller warned investors this could knock $80million off its pre-tax earnings.

Namibia Breweries said in its results last week that Brandhouse, its South African joint venture with Heineken and Guiness's owner Diageo, was enjoying double-digit beer sales growth.

SABMiller's trading update indicated the beer market was growing for both groups.

"The favourable economic landscape in South Africa will continue to underpin future volume and revenue drivers in both lager and soft drinks as the group invests to rejuvenate the mainstream beer category and to enhance its competitive position in the worthmore product segment. Building on the success of Peroni Nastro Azzurro and the recently launched Hansa Marzen Gold, the group will consider further new product launches in addition to improving market penetration through the expansion of trade licensing and direct delivery."

SABMiller said its worldwide lager volumes grew 11percent for the five months to the end of August. Despite reassurances that in the US Miller was making headway in beer war against InBev, the world's largest brewer whose brands include Budweisser, SABMiller's shares dipped more than 3percent to a day's low of R193,47.

"While the business has recently enjoyed a period of unexpectedly high volume growth during the initial implementation of the group's plans, this growth is expected to moderate over the remainder of the year," SABMiller's trading statement said.