As Movendi International reported in mid November, Heineken acquired a 66% stake in their competitor the Distell Group in South Africa. At the same time, the beer giant will also acquire Namibia Breweries, and thereby taking full control of ‘Heineken South Africa’ – Namibia Breweries has a 25% interest in the division.
The moves by Heineken are two of the latest strikes in a decades long battle between Big Alcohol giants Heineken, AB InBev and Diageo to gain market dominance in the African region. For Heineken the most attractive aspect of Distell is their well established distribution channels across the continent. Heineken plans to push more of their main brand products through these newly acquired channels into as many African societies as possible.
Distell is not a beer brand, mainly selling cider, spirits and wine. However, Distell has been growing its international presence recently as well. For Heineken this is an added benefit.
AB InBev acquired SAB Miller five years ago for the same reason as Heineken now took over Distell – to concentrate more market power, includinng distribution networks, to drive more consumption of their products in the African region.
Diageo, which was Heineken’s partner with Namibian Breweries until late-2015, has also been pushing to increase the consumption of spirits in the region.
Why is Big Beer after Africa?
By 2050 the African continent is set to have a larger population than either India or China. With a growing urban middle class population and growing labor force, the purchasing power of people in the African continent is rising. This is what Big Beer plans to cash in on.
According to a study by Kirin – one of the largest beer makers in the world – in Africa, beer consumption rose by 33% between 2010 to 2019. In a world where beer is loosing its popularity, specifically in western countries, Africa provides beer companies a lifeline to market heavily and increase demand and profits.
For example, Nigeria overtook Ireland as the second-biggest market after the UK for Diageo’s Guinness stout. According to the company’s beer president, sales in the continent grew by nearly a third during 2021 even amidst the ongoing COVID-19 pandemic.
In the African region, Big Beer is looking far into the future. Once China and India reach their plateaus for demand and profit, Africa will be where the beer companies seek their profits.
What does Big Beer’s thirst for the African region mean for people of the region?
For the people of the region, Big Beer’s thirst for profit only spells harm. These transnational beer giants will use their arsenal of tools to try and get more people to use their products. This means an avalanche of advertising and other marketing, exposing the largely alcohol-free population, especially young people and children, to continuous alcohol promotion.
The strategy of Big Beer is to turn the largely alcohol-free people of the region into the biggest beer consumers of the world in order to maximize their profit margins.
Already several Big Alcohol turf wars are raging in the African region with drastic consequences for people and communities.
- AB InBev is pumping ever higher volumes of alcohol into communities using super-sized bottles, driven by competitor Heineken.
- In East Africa, alcohol producers are competing for control of the liquor market — currently the most lucrative.
- In West Africa, in Ivory Coast, Heineken-owned Brassivoire and Castel-owned Solibra are putting children and youth in harms way through their relentless beer marketing war.
- In Nigeria, Heineken has been locked in relentless competition with other multinationals. Through the acquisition of additional equity stakes in Nigerian Breweries, in 2020, Heineken ensured growing market domination in the country.
The Big Alcohol giants are deploying four key strategies across the African region to maximize their profits:
- Marketing alcohol products as cool and as a way to forget everyday problems;
- Aggressive exploitation of largely unregulated alcohol advertising and other alcohol trade aspects (taxation, availability) across the region;
- Corporate interference in public health policy making across African countries; and
- Extreme availability and affordability of alcohol.
The consequences of Big Alcohol’s war for market dominance is paid by the people in the region.
- In Kenya out of the 50 million population, an estimated 2 million are alcohol dependent.
- Alcohol is the most harmful drug in the country specifically, affecting youth in Kenya.
- Children as young as 4 years old get already exposed to alcohol.
- In South Africa, 60% of all car accidents are said to occur due to alcohol.
- 75% boys and 40% girls between 15 to 19 years of age consume alcohol heavily in South Africa.
- Violence is also growing in the country, fueled by alcohol. In fact, 171 people are reported to die everyday due to alcohol.
- In Nigeria, alcohol is a problem for university students with about one third (31.4%) reporting past 30 day use and 14.6% consuming at high risk levels.
“Heineken in Africa” exposes Big Beer
Heineken’s appalling human rights violations in the African region have been exposed in the book “Heineken in Africa” by Olivier Van Beemen. Heineken boasts that its presence on the African continent boosts development. But after six years of research, investigative journalist Olivier van Beemen provides a detailed analysis. The truth he uncovered is not a love story: Heineken is exploiting people, communities and countries in Africa. The book details a shocking list of unethical practices employed by the world’s second largest beer producer. Some of these include:
- Support for apartheid
- Complicity in genocide
- Support for authoritarian regimes and collaboration with rebel groups
- Corruption
- Tax avoidance
- Unethical alcohol marketing, like beer promotion in schools
- The beer promotional girls scheme, running for almost two decades
- Exploitation of young women
- Sexual abuse
- Serious problems with protecting worker’s rights
“Heineken is Africa” stands as an example of what goes on beneath the large profit margins of alcohol companies in the African region.
Sources
Bloomberg: “Brewers vie for Africa’s beer market amid labour force promise“
The Sunday Times: “Wish you were beer: Africa is beverage’s next frontier”
fin24: “Beer’s future is in Africa. The same should be true of work“
