Sabmiller aims to outperform African growth with sales

SABMILLER plans to boost beer sales by 7%-9% a year by slashing prices, using more local grains, cheaper packaging and negotiating better tax terms with governments, it said yesterday.

“On average the African continent (in terms of gross domestic product) will grow by 5%-6% per annum we think ... we would expect to capture maybe 2%-3% (beer volume sales) above that,” SABMiller Africa’s finance director Jonathan Kirby said at the Reuters Africa Investment Summit in Nigeria.

He said the world’s secondlargest brewer planned to invest $400m-$500m a year outside SA and open one to two breweries in Africa in each of the next three years, with countries such as Ghana, Nigeria, Mozambique and Zambia the likely targets.

Home to some of the world’s fastest-growing economies, Africa’s thirst for beer is surging, and analysts estimate beer volumes rose about 7% last year. Excluding the mature South African market, growth reached more than 10%. This growth is spurring increased competition.

SABMiller wanted to gain an edge over rivals such as Diageo and Heineken by luring consumers who drink cheap locally made homebrews that comprise 75% of alcohol consumed in the region, the company said.

African consumers paid more for beer brands than the global average, Mr Kirby said, despite being the poorest continent.

“I think price is a key area. The African consumer will pay about $1 a serve and if you benchmark that against the rest of the globe that is at the top end. If we could make beer say 80c to 85c a serve I think the volume opportunity would just jump at you.” Reuters