Heineken buys two Ethiopian breweries

12 August, 2011

Africa: Heineken has purchased two breweries in Ethiopia for a total of US$163 million. 

The global brewer has completed the acquisitions of the Bedele and Harar breweries from the government of the Federal Democratic Republic of Ethiopia for US$85 million and US$78 million, respectively. These transactions follow Heineken's participation in the public auctions for the two breweries.

Siep Hiemstra, who from August 1 succeeded Tom de Man as regional president Africa and the Middle East for Heineken, said: "We are delighted to have acquired these two breweries which give us a sustainable footprint in one of Africa's most exciting beer markets. The transactions reflect Heineken's strategy of increasing our exposure to and growth from developing markets.

“Just as importantly, our expansion into the Ethiopian market increases our long-term commitment to Africa. Heineken will immediately look for ways to use less water in the brewing process. It will introduce practices to ensure that water returned to the eco-system is clean so local users are not prevented from gaining access to clean, fresh water. Heineken is also committed to working closely with farmers and small-holders to help build their understanding of sustainable agricultural practices to increase yields and enable permanent, positive change in the country.

“Heineken's work in these areas has delivered positive economic and social benefits in other countries across Africa and we expect the same positive impact in Ethiopia."

With brands such as Bedele Premium, Bedele Special, Harar, Hakim Stout and Harar Sofi (malt), the two breweries have a combined market share of 18% in the Ethiopian beer market.

Ethiopia is Africa's second most populated country with 85 million people and its beer market (three million hectolitres in 2010, source Plato) grew approximately 20% per year over the past five years, compared to a GDP growth of 8%. Beer and non-alcoholic malt consumption in Ethiopia was approximately four litres per capita in 2010, which is below the global average of 27 litres and below beer consumption in other countries in the region, such as Tanzania (seven litres), Uganda (nine litres) and Kenya (10 litres).

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