Cameroon: Competition authorities approve purchase of Guinness Cameroon by French group Castel

Cameroon competition authorities approved on March 28 the purchase of Guinness - a subsidiary of British group Diageo - by French group Castel, which controls the brewing company SABC, sources close to the matter were quoted as saying by Business in Cameroon.

This positive decision, which was disclosed by SABC’s MD Stephane Descazeaud, comes a year after the National Competition Commission of the Ministry of Commerce of Cameroon gave its approval in 2022.

"The national and Cemac competition authorities approved on March 28, 2023, the acquisition of Guinness Cameroon by Castel. This day symbolizes a historic date that will remain in the history of Castel in Cameroon. I am particularly pleased to share with you this great news, which strengthens our leadership and gives us an even greater social responsibility to consumers and the State of Cameroon. It is a project of growth, investment, and local value creation for all our stakeholders. The acquisition of Guinness Cameroon will ultimately create a large number of highly beneficial opportunities for the industry, whether in terms of jobs, industrial synergies, or cultural mixing. These will strengthen and enrich our vision, our mission, and our values," said the CEO of SABC.

Many observers are sceptical that this CFA300 billion deal could be anti-competitive and give the French group a monopoly on the local brewing market. Indeed, the conclusion of this deal gives Castel control over about 80% of the local market. However, local authorities rather see this acquisition as an opportunity to bring investment into the country. Article 17 of the Cameroonian competition law states that “a merger or acquisition that would harm competition can be allowed, as long as the economic gains of this merger or acquisition on the national economy exceed the effects detrimental to competition on the market”.

The parties involved in the acquisition deal reassure that all jobs will be safeguarded through the integration into the workforce of SABC of all employees of Guinness Cameroon. In addition, the purchase of the local subsidiary of Diageo is accompanied by an investment program of CFA200 billion that will allow boosting the volumes of Guinness products in the country. It is expected to start this year and will be executed over 5 years by the Castel group.

In detail, the program will involve building three new production lines dedicated to Guinness products, in the factories of Yaoundé, Garoua, and Bafoussam, with a total annual production capacity of 2.1 million hectoliters. It also includes an increase in glass packaging production capacity at the Société Camerounaise de Verrerie (Socaver) in Douala. This is another local subsidiary of the Castel Group, which already supplies several brewery companies in Cameroon and abroad. "From 2023, we will increase the production capacity by 25%, then by 50% in 2024, to ensure that SABC will not lack the packaging necessary for its expansion," says the company's CEO.

Overall, the program should bring to CFA330 billion the volume of investments by Castel group on the Cameroonian territory, over the 10 years from 2017 to 2027 (CFA130 billion francs have already been invested between 2017 and 2022).

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