The Kenyan brewing force, East African Breweries Ltd. (EABL), a subsidiary of the Diageo group, has reported a 60% surge in its pre-tax profit for the six months to December 2002 up to KS2.28 billion (Kenyan Shillings) ($29.8 million). The rise is attributed to the ending of one of Africa's toughest beer turf wars, the company said. EABL also said the pre-tax profits had been boosted by its new spirits business, the Uganda-based subsidiary International Distillers Uganda Ltd whose profits were up 100 percent, reflecting improved sales in beer and spirits.

South African Breweries International (SABI) and EABL, agreed in May to swap their brewing and beer distribution operations in Kenya and Tanzania to survive tightening demand and losses. The deal meant that SABI, a part of the world's biggest emerging beermaker South African Breweries, would dominate the Tanzanian market, and EABL would consolidate its hold on the Kenyan market. It effectively ended a turf war that had been costly to both sides.

"In Kenya, the group benefited from the transfer of the SABI brands, reduced overheads and improved mix," a statement from the EABL said. "Other income has increased significantly due to the inclusion of our share of income from our associate company, Tanzania Breweries Ltd."

EABL said it would pay an interim dividend of 3.0 shillings reflecting a 20% rise compared to the same period in the previous year.

It also announced plans to purchase a new bottling line at a cost of 1.3 billion shillings to be delivered in the fourth quarter of 2003.

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