Heineken Buys Two Ethiopian Breweries

Heineken N.V. has completed the acquisitions of the Bedele and Harar breweries from the government of the Federal Democratic Republic of Ethiopia for $85 million and $78 million, respectively.

"These two breweries which give us a sustainable footprint in one of Africa's most exciting beer markets,” said Siep Hiemstra, who as of August 1 succeeded Tom de Man as regional president, Africa and the Middle East for Heineken. “The transactions reflect Heineken's strategy of increasing our exposure to and growth from developing markets. Just as importantly, our expansion into the Ethiopian market increases our long-term commitment to Africa.”

Heineken said it will immediately look for ways to use less water in the brewing process. It will introduce practices to ensure that water returned to the eco-system is clean so local users are not prevented from gaining access to clean, fresh water. Heineken is also committed to working closely with farmers and small-holders to help build their understanding of sustainable agricultural practices to increase yields and enable permanent, positive change in the country.

“Heineken's work in these areas has delivered positive economic and social benefits in other countries across Africa and we expect the same positive impact in Ethiopia," said Hiemstra.

With brands such as Bedele Premium, Bedele Special, Harar, Hakim Stout and Harar Sofi (malt), the two breweries have a combined market share of 18 percent in the Ethiopian beer market.

Ethiopia is Africa's second most populated country with 85 million people and its beer market grew approximately 20 percent per year over the past 5 years, compared to a GDP growth of 8 percent. Beer and non-alcoholic malt consumption in Ethiopia was approximately 4 liters per capita in 2010, which is below the global average of 27 liters and below beer consumption in other countries in the region, such as Tanzania (7 liters), Uganda (9 liters) and Kenya (10 liters). In addition to a fast growing population and a developing beer market, the country's political stability and improving economy, make Ethiopia a promising, long-term growth market for Heineken in Africa, the company said.

Heineken USA Inc. is a subsidiary of Heineken International BV. Its European brands imported into the U.S. include Heineken Lager, Heineken Light, Amstel Light, Newcastle Brown Ale, and Buckler non-alcoholic brew. Heineken USA is also the exclusive USA importer for the Tecate, Tecate Light, Dos Equis, Sol, Carta Blanca and Bohemia brands from Mexico.