Diageo’s Kenya Unit Tops Up Spirits Stock to Guarantee Supply

Diageo’s Kenya Unit Tops Up Spirits Stock to Guarantee Supply

East African Breweries Plc has ramped up imports of spirits to avoid any stock-outs amid global supply-chain hangovers, according to Group Chief Financial Officer Risper Genga Ohaga.

The Diageo Plc unit boosted inventory by 800 million shillings ($7.03 million) in the first half, fearing the December festivities would catch it without enough alcohol for revelers and force emergency orders, she said in an interview on Friday, after the company reported profit had more than doubled in the six months through December.

“If you suddenly have more demand and you have to put an extraordinary order, it comes at a hugely incremental cost,” she said. The company has “very careful planning 18 months ahead, and then holding just a little bit extra, so you don’t have to airlift anything or have an emergency shipment.”

EABL, which also operates in Tanzania, Uganda and South Sudan, distributes brands including Smirnoff vodka and J&B scotch whisky. Sales of reserve brands such as Johnnie Walker doubled, while total spirit sales jumped 25%, Ohaga said. Doubled Profit

The brewer sees capital expenditure of 6.2 billion shillings in the second half, similar to the amount spent in the first six months, Ohaga said. The spending will go into expanding operations mainly in Tanzania and Uganda where EABL is investing in additional brewing capacity and a ready-to-drink packaging line respectively, she said.

The maker of lagers including Tusker and Serengeti as well as Diageo staples such as Guinness saw a recovery in its core Kenyan market, where sales were up 27%, helped by the reopening of the economy and the easing virus control measures. Sales in Uganda grew 18% and 15% in Tanzania after sales of Guinness shot up by 157%.

Net income jumped 130% to 8.74 billion shillings in the first half, and EABL declared a 3.75 shillings dividend. The shares rose as much as 3.6% to a two-week high.

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