National Breweries, the leading producer of traditional African beer, has been sold by Heinrich’s Syndicate, a subsidiary of AB InBev, to Delta Corporation.
Traditional African beer (TAB) is produced from locally grown sorghum and maize and is mostly opaque as opposed to the clear lager beers, which are brewed with malt, maize and hops. While the more expensive lager beers are considered a premium product, which appeal to Western style oriented, wealthier and better educated people, traditional African beers are cheaper and mostly consumed by the poorer and less educated population.
Delta Corp. is Zimbabwean biggest company by market value with a diverse portfolio of local and international brands in lager beer, traditional African beer (TAB), Coca-Cola franchised sparkling and alternative non-alcoholic beverages. It has investments in associate companies whose activities are in cordials and juice drinks, wines and spirits.
“This investment opportunity fits well with the company’s multi-beverage strategy,” company secretary Alex Makamure said. “The impact of this transaction is currently being determined but is not material for Delta,” he continued. The value of the transaction, which is still subject to regulatory approval, was not disclosed.
National Breweries is the leading producer of TAB, namely Chibuku ShakeShake and Chibuku Super, pasteurized TAB with a longer shelf life, which gives it a distinct advantage with delivery to a wide geographic reach. AB InBev indirectly acquired a 70% stake in National Breweries, following a merger with SABMiller in October, 2016.
In the fiscal year, which ended 31.3.2017, National Breweries experienced a decline in opaque beer volume by 37%, mainly due to the deliberate decision to close breweries and to stop unprofitable delivery routes. The company therefore posted last year for the first time in the last five years a lower turnover and an operational loss.
AB InBev continues to own Zambian Breweries, Zambia’s monopolist in the clear beer market. AB InBev announced in May to invest US$30, raising production capacity from currently 850,000 hl to 1.85 million hectoliters at its Ndola brewery (inside.beer, 21.5.2017). In addition, the company just opened a new malting plant at Zambia’s capital Lusaka with a yearly production capacity of 15,000 tons of malt. The plant is used to transform locally grown barley into brewing malt, with two thirds of the production being used in the own two breweries and one third being exported to neighboring countries (inside.beer, 3.4.2017).
Delta Corporation is listed on the Zimbabwe Stock Exchange and was first listed in 1946 as Rhodesia Breweries. Its origins, however, date back to 1898 when the country’s first brewery was established in Cameroon Street, (Salisbury) Harare, from where the brewing industry developed into a major industrial and commercial operation.
By 1950, the Company had built the Sable Brewery in Bulawayo, producing pale ale, milk stout and Sable Lager. Over the years the company continued to expand its portfolio of businesses and diversified its brewing base. In 1978 the name was changed to Delta Corporation Limited and the Company assumed the mantle of a holding company for a broad range of interests serving the mass consumer market. These included lager and sorghum beer brewing, bottling of carbonated and non-carbonated soft drinks, supermarket and furniture retailing, tourism and hotels and various agro-industrial operations.
The hotel, supermarket and furniture retailing businesses were demerged from the Group in 2001 to 2002 resulting in the Group focusing on the core beverages sectors. Some supply chain related investments remained part of the Group until 2014 when the plastic packaging entity, MegaPak, was demerged. The Company has a minority shareholding in the now consolidated packaging group NamPak Zimbabwe.