Benjamin Kyalo (right) and David Masinde inspect bottles of WhiteCap Lager brand at the East African Breweries Ltd plant in Ruaraka, Nairobi. The directive on social distancing to stop the spread of coronavirus disease, and the subsequent drop in the consumption of alcohol, has proved that drinking has little to do with access. On the contrary, the ban on social gatherings means beer consumers are hardly drinking even though their favourite brands are still available through cheaper outlets, including liquor stores and supermarkets. In such outlets, the retail prices are often those recommended by the manufacturers, meaning that buyers would avoid the hefty margins loaded on the drinks’ prices in bars to cover for their entertainment and hospitality. Bars were ordered closed in a March 22 directive that took effect immediately and with a near total compliance rate, with serious implications for brewers. Naivasha-based Keroche Breweries has suspended the manufacturing of bottled beer while East African Breweries Ltd has shifted focus to the production of canned beverages. “The brewery is open but due to the prevailing situation in the lockdown order on bars, there is no distribution being done,” said Keroche’s corporate affairs director John Nyongesa. He added that beer production was “100 per cent down and the situation is ugly." The firm has sent home hundreds of workers and opted to retain only essential staff who can be deployed in the manufacturing of other products such as spirits. Nothing captured the scale of the disruption better than the plunge of EABL’s shares on the Nairobi Securities Exchange, where the company was valued at Sh126 billion. In just a week after the government announced that bars had to be shut, the brewer’s value had shrunk by a staggering Sh25 billion, as jittery investors took flight. It might have been worse if EABL was not already a major producer and importer of wines and spirits, which can be easily accessed from liquor stores. EABL Corporate Affairs Director Eric Kiniti said the brewer’s focus had moved to packaging its products in cans instead of bottles. "Beer production has been severely affected. The little that we manufacture is for sale in cans, with more focus on wines and spirits,” said Mr Kiniti. He added that there were still huge beer inventories in the supply chain, which included the brewer’s large network of distributors. Senator Keg, EABL’s low-end but best selling beer in […]
Brewers’ pain as shutdown of bars sees beer sales decline
Benjamin Kyalo (right) and David Masinde inspect bottles of WhiteCap Lager brand at the East African Breweries Ltd plant in Ruaraka, Nairobi. The directive on social distancing to stop the spread of coronavirus disease, and the subsequent drop in the consumption of alcohol, has proved that drinking has little to do with access. On the contrary, the ban on social gatherings means beer consumers are hardly drinking even though their favourite brands are still available through cheaper outlets, including liquor stores and supermarkets. In such outlets, the retail prices are often those recommended by the manufacturers, meaning that buyers would avoid the hefty margins loaded on the drinks’ prices in bars to cover for their entertainment and hospitality. Bars were ordered closed in a March 22 directive that took effect immediately and with a near total compliance rate, with serious implications for brewers. Naivasha-based Keroche Breweries has suspended the manufacturing of bottled beer while East African Breweries Ltd has shifted focus to the production of canned beverages. “The brewery is open but due to the prevailing situation in the lockdown order on bars, there is no distribution being done,” said Keroche’s corporate affairs director John Nyongesa. He added that beer production was “100 per cent down and the situation is ugly." The firm has sent home hundreds of workers and opted to retain only essential staff who can be deployed in the manufacturing of other products such as spirits. Nothing captured the scale of the disruption better than the plunge of EABL’s shares on the Nairobi Securities Exchange, where the company was valued at Sh126 billion. In just a week after the government announced that bars had to be shut, the brewer’s value had shrunk by a staggering Sh25 billion, as jittery investors took flight. It might have been worse if EABL was not already a major producer and importer of wines and spirits, which can be easily accessed from liquor stores. EABL Corporate Affairs Director Eric Kiniti said the brewer’s focus had moved to packaging its products in cans instead of bottles. "Beer production has been severely affected. The little that we manufacture is for sale in cans, with more focus on wines and spirits,” said Mr Kiniti. He added that there were still huge beer inventories in the supply chain, which included the brewer’s large network of distributors. Senator Keg, EABL’s low-end but best selling beer in […]
