Anheuser-Busch InBev NV (AB-InBev) — the world’s largest brewer — is planning to build a $100 million brewery in Dodoma, Tanzania.
East Africa’s beer market is set for interesting times with reports that Anheuser-Busch InBev NV (AB-InBev) — the world’s largest brewer — is planning to build a $100 million brewery in Dodoma, Tanzania.
AB-InBev’s entry into the region comes at a time key players — Diageo, Heineken and Castel Group — are either struggling to protect their market share or increase their presence.
Indeed, as global beer consumption declines in other regions, in Africa consumption has been steady, averaging four per cent between 2012 and 2014, and is projected to average five per cent for the period from 2015 to 2020, according to market research firm Canadean.
Bloomberg this week reported that AB-InBev has set in motion plans for a new plant after a meeting between President John Magufuli and Ricardo Tadeu, its Africa boss.
The decision by the company, which entered Africa in 2016 after the acquisition of SABMiller at a cost of $100 billion, to invest in a plant that will anchor its expansion in the region did not come as a surprise. The company has been recording double-digit growth in volumes.
“Our beer volumes grew double digit in the majority of the countries in which we operate in Africa — Nigeria, Tanzania, Uganda and Zambia — as we continue to expand our offerings to consumers through affordability and premiumisation strategies,” said the company in its 2017 financial report.
Shift from premium beer
In East Africa, AB-InBev has a strong presence, controlling over 75 per cent of the Tanzania market through Tanzania Breweries Ltd, while in Uganda it is seeking to increase its market share through its local subsidiary Nile Brewery, which controls about 60 per cent of the market.
In Kenya, Diageo through East Africa Breweries Ltd (EABL) in which it has a 50.02 per cent stake, continues to dominate the market.
