Zambia: Zambian Breweries Plc to sell opaque beer business

Zambian Breweries Plc will next year stop producing Coca-Cola, Fanta and Sprite following the separation of the Coca-Cola Group from Anheuser-Busch (AB InBev) which recently took over the local brewery company, Zambia Daily Mail reported on May 29.

The Lusaka Securities Exchange (LuSE)-listed entity will also stop producing the popular brand ‘Chibuku’ and Chibuku Shake Shake due to unfair competition from other producers in the country and also because AB InBev want to concentrate on clear beer production.

The Coca-Cola group is expected to separate from AB InBev, a move that will result in Zambian Breweries Plc and other subsidiaries stopping the production of Coca-Cola, Sprite, Fanta and Schweppes by next year.

Belgian-based AB InBev, the world’s largest brewer with several premium brands such as Budweiser and Stella Artois, last year paid over US$100 billion to take over SAB Miller businesses globally, including the Zambian subsidiary as it solidifies its position in the global beer market.

Confirming the development last week, Zambian Breweries Plc country director Annabelle Degroot said the company is expected to sell National Breweries, which produces Chibuku, Chibuku Shake Shake and Heinrich`s Syndicate Limited, which produces super maheu and non-alcoholic flavoured maize drinks.

Mrs Degroot said a number of companies have expressed interest to buy the businesses but the deals have not been finalised.

“The majority shareholder wants to concentrate on clear beer because that is where its capability and strength are and, as a result, we are selling other businesses. We have also agreed to separate from Coca-Cola, so from next year we will not be selling Coca-Cola products anymore and that was the Coca-Cola group’s decision,” she said.

She said Zambian Breweries Plc will ensure that the businesses are sold to companies that will operate them effectively and profitably.

“We have agreed to sell our 70 percent shares in National Breweries, which is a listed company. That was a huge decision for us because National Breweries has been with us for as long as we can remember and it is an important brand for Zambia that we have exported to many markets,” she said.

She also explained that the informal opaque beer production has adversely affected the Chibuku Shake Shake resulting in the decision to sell it off.

“We pay tax, packaging is expensive yet some businesses are evading tax and they do not package the opaque beer so we cannot compete in that market anymore,” she said.

Mrs Degroot said the company has since informed all the regulators on the development.

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