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Nile Breweries named Uganda market leader

Discussion in 'International Forum' started by Geza Ulole, Jul 24, 2010.

  1. Geza Ulole

    Geza Ulole JF-Expert Member

    Jul 24, 2010
    Joined: Oct 31, 2009
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    By Faridah Kulabako
    Wednesday, June 16 2010

    A survey which polled beer consumers in the East African region indicates that Nile Breweries is the most preferred brewer in Uganda. A Kstrel Capital survey released last month (May)shows that Nile Breweries dominates the Ugandan market with 55 per cent market share, as opposed to its greatest competitor, Uganda Breweries Limited.

    Kestrel Capital is an investment bank based in Kenya and licensed by the Kenya Capital Markets Authority. Nile Breweries is a subsidiary of South African Breweries (SABMiller), while Uganda Breweries is an affiliate of the East African Breweries.

    Increased competition

    The survey points out that EABL has been facing increased competition in the Ugandan market in addition to challenges posed by higher operating costs. Increased competition in the emerging brand segment and a change in regulation regarding the packaging of spirits cut into EABL’s year-on-year growth by 2 per cent in the first half of 2010. The Ugandan economy is projected to grow at 5.4 per cent this year, the fastest growing among the economies in the region, meaning that the market will provide momentum for volume growth in beer.

    Lower market segment

    To get a little bigger share of the fastest growing economy’s market, EABL is making inroads into the lower end segment via a bottled Senator lager that has recently been overtaken by a similar sorghum based lager - Eagle by NBL and its also investing in substantially increasing marketing spend to increase brand visibility. With alcohol consumption per capita still 6 litres, UBL sees strong growth potential in this market and plans to increase penetration of mainstream and premium spirits.

    Last week, the EABL launched a new look of its Pilsner Lager brand in a long neck bottle, which NBL claimed to have legally protected by registering it as its trade mark. Although it’s second in the Ugandan market, in Kenya, EABL is the market leader with a 73 per cent and 68 per cent market share of revenues and volumes respectively. as at the first half of 2010. The study further indicates that Uganda contributed 22 per cent and 21 per cent to group revenues and volumes respectively in the first half of 2010.

    The group’s year on-year volume also declined by 10 per cent to 3.6m hectoliters with a 13 per cent, 2 per cent and 6 per cent volume decline in Kenya, Uganda and the Great Lakes Region (GLR) which covers Southern Sudan, Rwanda, Burundi and Eastern DRC, respectively. To minimise on operational costs, the brewer plans resort to low cost and drought resistant sorghum as opposed to barley, increase plant efficiencies and commission its own biomass power plant.

    EABL is also expected to acquire Serengeti Breweries Limited at an undisclosed cost by presumably utilising the bulk of its existing cash reserves and its targeting an initial market share of 30 per cent upon acquisition.

    Daily Monitor: *- Business*|Nile Breweries named Uganda market leader

    MY TAKE:
    Lets see how will the competition go? i know EABL can not beat SABMiller! By the way i am not impressed by Serengeti Brew decision to sell a stake in EABL! why shouldn't EABL open up a brewery in TZ and give out jobs and intensify competition? Has Serengeti Brew never learned a lesson from Kibo Breweries partnering with EABL?