Beer war: NBL fires ÔÇÿmissilesÔÇÖ at SAB Miller
South Africa’s beer giant, SABMiller’s decision to make cheaper beer using cassava and sorghum has been bemoaned by NamBrew Ltd (NBL) with reasons that brewing beer with such ingredients instead of expensive barley compromises its quality.
SABMiller, Africa’s biggest brewer, last week announced that it is ratcheting up production of affordable beer using sorghum and cassava – stable foods in many African countries – to replace the more expensive barley to drive its growth further around the continent.
However, NBL Manager for Corporate Affairs, Gideon Shilongo has bewailed SABMiller’s strategy that would slice the price of beer to nearly half, as designed to target a completely new group of customers who might not be consuming quality beer at present.
According to Shilongo, NBL is not shaken by SABMiller’s strategy as far as competition is concerned.
“Should it be feasible to produce affordable brewing barley in Namibia, NBL would also be able to provide consumers within such a segment with affordable but top quality beer.
“Our Namibian consumers have proven over time that they do not compromise on top quality beer and this is what NBL believes in, in regard to our Reinheitsgebot brewing philosophy,” Shilongo defended.
On the other side, SABMiller Africa Regional Managing Director, Mark Bowman said the strategy that may be perceived by other regional competitors as a malice competition to edge them out of business, only aims to make beer more affordable and less of a luxury when it’s priced at about US$1 (N$7.5) a 750ml-bottle across the continent.
“By African standards, beer is expensive, so we look at sub-inflation pricing and develop an affordable category,” Bowman asserted.
Shilongo shot down fears that SABMiller’s strategy could force NBL to lower its prices in order to maintain its customer-base in the country to avoid massive losses.
This comes after Government recently awarded a license to SABMiller to establish a brewing plant in Okahandja.
Still, Shilongo admitted that NBL is not in a comfort zone as before, as, as soon as the competition stiffens, they will adopt an alternative plan that would include using locally produced barley to stimulate the barley farming potential in Namibia - should it be economically feasible to produce malted barley in Namibia.
“This would create the much needed employment for our people, enable NBL to access locally affordable brewing barley as well as enable beer consumers to have an affordable but high quality beer at the same time,” he said.
However, Shilongo welcomes the brewing competition, with the mindset that NBL will not waver. He further said that NBL has been operating competitively with SABMiller both in Namibia and SA for many years now, yet NBL’s market share has continuously grown in both markets.
“We have achieved continued market growth despite SABMiller’s existence in and outside the country, with a capital/revenue base.
Even though they have now been granted a brewing license in Namibia, this does not, in any way, impair our innovative and competitive spirit both at home and beyond,” he concluded.