EABL introduced Tusker Lite last week and brought back Pilsner Ice. The brands target the premium end of the local beer market, which is also a target market segment for SABMiller.
SABMiller re-launched its Redds brand in Kenya, while also introducing US brand Miller Genuine Draft, which will be sourced from its Tanzania’s brewing plant. Crown Beverages are SABMiller’s distributors in the Kenyan market, where they also have the Castle Lager brand. Crown beverages are the bottlers of Keringet drinking water.
Renewed rivalry was sparked off by a re-purchase of 20 per cent stake by EABL in Kenya Breweries ending a marriage of convenience between the two competitors.
The Kenyan based brewer received a concessionary loan from its anchor shareholders-Diageo International- for the repurchase deal ending speculation of a rights issue.
“Ending the binding arrangement they had with SABMiller allows them to be more aggressive,” said Mwenda Rarama, an analyst at Kingdom Securities.
East Africa is increasingly becoming a battle zone between SABMiller and Diageo, majority shareholder of EABL.
Already, a turf war is underway in Uganda between Uganda Breweries, owned 98.2 per cent by EABL, and Nile Breweries, which is 60 per cent owned by SABMiller.
In Tanzania, Diageo through EABL ended a partnership with SABMiller over the running of Tanzania Breweries Limited and bought a majority stake in rival Serengeti Breweries last year.
“TBL disposal will bring them a one-off gain while the purchase of Serengeti will raise its revenues in the long-term,” said Mr Musau.
EABL has also to contend with Dutch brewer Heineken who recently opened its regional headquarters in Nairobi and local brewer Keroche Industries.
EABL’s net profit grew 2.4 per cent to Sh7.35 bn from Sh7.18 bn in 2010.