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Drinks

Heineken Looks To Premium Brands To Take On SAB In South Africa

Heineken NV’s recent introduction of Sol Mexican lager to South Africa forms part of a plan to boost its market share in a country dominated by soon-to-be-acquired SABMiller Plc.

The Dutch brewer brought Sol to South Africa this month and plans to add more premium brands there, country head Ruud van den Eijnden said in a recent interview. Growth will also be achieved through established brands such as Heineken, Amstel and Windhoek, he said.

“South Africans love premium beers, with 39% drinking them on a regular basis,” van den Eijnden said. South Africans spent more than 103 billion rand ($7.1 billion) buying beer in 2015, an increase of 9.1% from a year earlier, according to researcher Euromonitor International.

Heineken took full control of its South African operations in April, after dissolving a joint venture with Diageo Plc. Its share of South Africa’s beer market has remained at about 10% over the last five years, dwarfed by SABMiller’s 80%. SAB’s imminent takeover by Anheuser-Busch InBev NV will give the brewer access to more global brands and make competition even more intense, van den Eijnden said.

“SABMiller is already a formidable competitor,” he said. “Its new parent company has even more financial firepower than SAB, so, in that sense, I think competition will intensify.”

Heineken has added 300 jobs in South Africa this year, with 95% of these in its sales department, doubling its local sales team, van den Eijnden said. That has improved its ability to stock shelves and increase product sold, he said.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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