Heineken gears up to take on AB InBev in South Africa

Dutch brewer Heineken has introduced Sol Mexican Lager beer to the South African market as it readies to confront Anheuser-Bush InBev (AB InBev), the soon to be new owner of SABMiller’s breweries in the country. Heineken said it is part of its plan to increase its market share in a country where SABMiller dominates the market.

Heneken brought Sol to South Africa this month and plans to add more premium brands to its portfolio in the country, says Country Head, Ruud van den Eijnden, on Tuesday. He adds that growth will also be achieved through established brands such as Heineken, Amstel and Windhoek.

“South Africans love premium beers with 39% drinking them on a regular basis,” van den Eijnden said. According to Euromonitor, South Africans spent over R103bn rands ($7.1bn) on beer in 2015, an increase of 9.1% from a year earlier.

Heineken took full ownership of DHN Drinks and Sedibeng Breweries in April, a dissolved joint-venture partnership it formed with Diageo in 2004 to counter SABMiller’s market dominance. Heineken’s share of the South African beer market however, remains at 10% over the last five years, with SABMiller holding 80%.

The soon to be finalized merger of SABMiller and AB InBev will give Heineken access to more global brands and increase competition in the South African market, van den Eijnden said.

“SABMiller is already a formidable competitor,” he said. “Its new parent company has even more financial firepower than SAB, so in that sense I think competition will intensify.”

According to the Country Head, Heineken has added 300 jobs in South Africa this year with 95% of these jobs in its sales department, doubling its sales team. He adds that it has improved the brewer’s ability to stock shelves and increase product sold.

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