Kenya: Carlsberg to start local production

Danish Brewing Company East Africa Limited, a subsidiary of U.S. based Bounty Global Management Company, will set up a production for Carlsberg, Tuborg, Holsten and Kronenbourg beers, as well as Somersby Cider in Kenya. It will be Carlsberg’s first local production on the African continent solely dedicated to the production of its own products, after it sold it brewery in Malawi to French Castel Goup in 2016 (, 16.8.2016).

Kenya’s Ministry of Trade announced on Tuesday that it had reached an agreement with the firm for an investment of USD 45 million (KES 4.5 billion) in a brewery and bottling plant in Naivasha, a town about 100 km north-east of Kenya’s capital Nairobi.

Once fully operational, the plant will produce 12-15million cases of beer a year (about 1-1.3 million hl) and directly employ 350 people. “It will also produce beverages using sorghum sourced locally from their recently launched farmers outreach program, where they will contract 17,000 farmers,” said Trade Cabinet Secretary Peter Munya.

In 2015, Carlsberg entered the beer market in Kenya after signing an exclusive distribution contract with Centum Group, which operates as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation and which is listed at the Nairobi Securities Exchange (NSE). Centum targeted the premium beer market, by importing the beer mainly from Denmark and selling it in the local market through its 100% subsidiary King Beverage Ltd. The company also said it had plans to set up a beer bottling plant, depending on sales volumes.

However, in August this year after being 4 years in the market, Centum sold 100% of the shares in the company for USD1.3 million (KES 130 million) to Danish Brewing Company. “The strategic intent by Centum was to grow volumes of the business, initially under an import model and later under local production. However, due to various industry challenges, including competition from gray products and parallel imports of similar products, it was evident that the business would not be able to scale up volumes to warrant the further investment by Centum into local production,” said Centum in a statement in August. Two months earlier, Centum already announced to sell all its shares in two Kenyan Coca-Cola franchise bottlers; Almasi Beverages Limited and Nairobi Bottlers to Coca-Cola Beverages Africa (CCBA) for USD 192.5 million (KES 19.5 billion).

Beer market leader in Kenya with five production sites for beer and spirits is East Africa Breweries Limited (EABL), a subsidiary of Guinness.

Another local beer producer with a production capacity of about 1.1 million hl is Keroche Breweries, Kenya's largest fully locally owned brewery. The company is owned by Ms. Tabitha Karanja, who had been arrested together with her husband Joseph Karanja in August over alleged tax fraud.

Other players in the market without an own local production are next to Carlsberg also Heineken and AB InBev, that are fighting for years very hard to conquer a piece of the market. AB InBev said last year it planned to build a brewery in Kenya for USD 100 million. Heineken, on the other side, was fined in August USD 16.4 million for the breach of a distribution agreement (, 14.8.2019).

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