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Post date: 03/09/2015 - 20:35

SABMiller steps up Africa spirits focus

SABMiller is upping its focus on the “huge opportunity” for mainstream spirits in Africa by targeting more countries on the continent, and aims to help “legitimise” the category.

The company has built spirit production facilities in Ethiopia, Nigeria and South Sudan in the last 15 months, as well as buying a spirits business in Mozambique. Speaking to journalists at a presentation in London today, Mark Bowman, SABMiller's Africa MD, said: “It's a completely fragmented spirits industry across Africa with no dominant players at all, so there's a very large potential for mainstream spirits.”

SABMiller is upping its focus on the “huge opportunity” for mainstream spirits in Africa by targeting more countries on the continent, and aims to help “legitimise” the category.

The company has built spirit production facilities in Ethiopia, Nigeria and South Sudan in the last 15 months, as well as buying a spirits business in Mozambique. Speaking to journalists at a presentation in London today, Mark Bowman, SABMiller's Africa MD, said: “It's a completely fragmented spirits industry across Africa with no dominant players at all, so there's a very large potential for mainstream spirits.”

Bowman suggested that international spirits players are focussing on the higher end of the market, so a gap exisits for more affordable spirits.

He revealed there was a “lot of debate internally” on whether to focus on the fast-growing category, with the firm concluding that there is scope for developing spirit brands. SABMiller already has a long-running presence in Tanzania, through its Tanzania Distilleries subsidiary.

Earlier, Bowman had told analysts that around 80% of the spirits market in Africa - outside of South Africa's developed market - is “illegitimate”. He said: "It's an industry completely under the radar. Our efforts in spirits will be to form an industry, to lobby the government and say, 'let's clean this industry up'.”

Asked which spirits categories will be the focus, Bowman said: “It will depend on the market.” But, he added: “We already have a portfolio of cream-based liqueurs, through to vodkas and whiskies.” In September, SABMiller launched blended Scotch whisky Fyfe's in Tanzania.

SABMiller, which currently makes around GBP45m (US$67.7m) annual profits from spirits in Africa, will look at other markets in the region in future, but Bowman said, in the short to medium term, Ethiopia, Nigeria, South Sudan and Mozambique are the “most attractive” opportunities.

On a wider scale, Bowman said that the spirits category is not a target for the group in the rest of the world, but Africa offers it a unique opportunity.

“I would call it a structured learning process,” he added.

During an earlier presentation, SABMiller, whose business is dominated by beer and soft drinks, said it is targetting around 10% sales growth in the medium term in Africa - including South Africa. The company claims to be the number one player in around 30 of the 38 African countries it operates in, helped by its strategic alliance with Castel.

Original story can be found here: http://www.just-drinks.com/analysis/just-on-call-sabmiller-steps-up-afri...