LAST WEEK, SA BREWERIES,
A SUBSIDIARY OF AB INBEV, ANNOUNCED THAT IT WOULD INVEST R2.8 BILLION IN BREWERY EXPANSIONS AT ITS ALRODE AND ROSSLYN BREWERIES IN GAUTENG AND WOULD INTRODUCE TWO NEW PACKAGING LINES FOR RETURNABLE GLASS BOTTLES happen in the near future.
Tadeu said R1.3 billion would be spent on the Alrode expansion and R1.5 billion on Rosslyn.
Asked about undertaking an expansion during the current recession, Tadeu said AB InBev was taking a longterm view on the upgrades at the two local breweries.
Craig Read, project manager at Alrode, said AB InBev decided on the R2.8 billion investment in November.
The expansion started in December when all the major orders related to the project were undertaken, with actual construction having begun in February.
The Alrode packaging line would be ready next month, while the Rosslyn line was scheduled for completion in January, Read said.
No new brands would be introduced as part of the Alrode expansion, he added.
According to Sanderson, the project will result in Alrode and Rosslyn’s beer output capacity increasing from 8 million to 10 million hectolitres, with SAB’s local beer output rising from 28 million to 32 million hectolitres.
Given the recession and the increase in local beer supply thanks to the abovementioned expansion projects, City Press asked Sanderson if this would result in lower beer prices.
“SAB reviews its pricing regularly and tends to have one or two price adjustments each year,” he said.
“It is not possible to comment at this stage on beer prices in the future.”
Heineken is AB InBev’s key competitor in the local market.
Ruud van den Eijnden, the managing director of Heineken SA, declined to comment on the expansion in AB InBev’s beer production and its impact on market dynamics.
Van den Eijnden said Heineken was also expanding its beer and cider output at its Sedibeng Brewery plant in Gauteng.
David Wilson, the head brewer for craft beer company Copperlake Brewing Company in Fourways, said the extended production capacity at Alrode and Rosslyn was unlikely to have an effect on South Africa’s craft beer industry, which makes up less than 1% of the local beer market.
Wilson said since craft beers were premium beers, they were priced a lot higher than normal beer. Also, the expansion at Alrode and Rosslyn catered to a high-volume beer market, so prices were cheaper.
“The expansion in beer supply is in a different price bracket from the craft beer market,” he said.