Tuesday, March 13, 2007

Amstel a go go

Now this is news. From the M&G.

The contract for South African Breweries (SAB) to produce, market, sell and distribute Amstel lager has been terminated, Heineken NV said on Monday.Heineken would build a brewery in South Africa and Amstel would be sourced from existing European breweries until the new brewery was complete, the company said in a statement.SAB said it would stop brewing Amstel with immediate effect in a statement on Monday.

I've always found this situation a bit odd - that SAB licence in this brand which is owned by an international competitor. I think what this move does do is to seriously strengthen the position of an opposition player into the South African beer market. Brandhouse will now have the Nambrew (Windhoek) brands as well as Amstel brand to take on Breweries head on (or maybe at least side on!). Now we just need Carling Black Label to withdraw their licence to SAB.

The reasons for ending the deal are a bit spurious and the classic case of simply looking for a contractual loophole to get out of a binding contract.

Amstel initiated the arbitration in 2006 following its conclusion that the acquisition by BevCo of a 15.04 percent shareholding in SABMiller resulted in a material change in ownership of SABMiller, the statement said. Amstel considered this to be harmful to the interests of the Heineken Group.

Ha Ha.

But I do agree with Brandhouse Managing Director Simon Litherland's statement (reported here) that:

"Amstel will be a fantastic addition to our premium brand portfolio and will bring significant scale to our existing beer business".

If I were a marketing man in Brandhouse I would very seriously start marketing this version damned fast.

There is the one serious gap in the market in South Africa, and that's for a decent light beer. One that doesn't diminish one's manhood (generally the "beerbelly around the braai" notion), or fizz like champagne (as does Windhoek Light), is not too sweet (as is Sterling Light), is actually a low alcohol beer (as Castle Lite is not).

Amstel Light has a good snob factor, tastes pretty good as far as light beer goes, and would also appeal to the female market who are a large portion of the light beer market. It would also easily leverage off the brand value that SAB have so kindly developed for the new licence holder.

Good luck I say. I just hope that unlike my friends at SAB you will continue to give me my beer in a decent sized bottle.

Researching for this article I visited this site. JoeSixPack, which did a good job of encouraging me to visit Philadelphia.

P.S. Breweries have been been a little slow (at 13 March) to take this off their site. The proud header they have to "Our Brands" still looks like this.

UPDATE: (IN HORROR)- by the 18th March - SAB are now punting their "Brands" with this ghastly concoction as the lead goose. Say it ain't so!


Champagne Heathen said...

I just read this article. It greatly troubled me... Does this mean the only beer I ever drink is about to go up or down in price?!?!

ATW said...

My dear champs. In the fine philosphical words of Yazz. #1 for 15 weeks in 1988.

The only way is up
For you and me now
Now we may not know
Where our next meal is coming from
But with you by my side
I'll face what is to come.

Champagne Heathen said...

Damn. This means I'm going to be broke.

DaveRich said...

Amstel Light... awesome light beer choice. Like diet pepsi is better than diet coke.

ATW said...

Dave, I'm just looking forward to SAB having some real head-on competition.Although I think that the reality is that no-one will really have the distribution critical mass to really take them on. Even Amstel's 9% market share is was mainly "quart" sales (about 70% apparently). Heineken won't be able to compete for that market very easily purely on the basis of distribution.

I reckon that Amstel's market share will head down to about 2-3% with most of their current custom heading back to Hansa unless there is a serious change of strategy from Brandhouse.

Amstel light, I think, will definitely hit the shelves.