Brewers see new horizons in Africa

February 10th, 2012  |  Source:

Brewing in Africa is on a roll. With Americans spurning beer for spirits, British pubs closing at a rate of 16 a week and Russia slapping punitive taxes on ale, the $160bn industry is increasingly looking to sub-Saharan Africa.

SABMiller, which began its African adventures in earnest in the 1990s, is pouring $80m into a new brewery in Uganda, doubling the capacity of its Nile Breweries subsidiary. It also brings the brewer’s investment in the continent up to $1.75bn over the past four years.

Diageo, the distiller and brewer of Guinness, has invested more than £1bn in the past five years. The privatisation of Ethiopian breweries was mobbed by multinationals last year, when Heineken of Holland picked up a duo for about $160m.

Africa is “one of the most attractive emerging beer markets over the next three-to-five years”, according to Michael Steib, analyst at Morgan Stanley, who sees capacity constraints as the main brake on growth.

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