Coca-Cola Beverages Africa to snap up Castel Malawi’s soft beverage unit SOBO

MALAWI – Castel Malawi Group, a leading producer and distributor of alcoholic and non-alcoholic beverages in Malawi, has agreed to offload its soft beverage unit, Southern Bottlers Limited (SOBO) to Coca-Cola Beverages Limited a subsidiary of Coca-Cola Beverages Africa.

SOBO produces Coca-Cola, Fanta, Sprite, Cherry Plum, Cocopina, SOBO Squash and several others brands in the South African market.

According to Castel Group’s Managing Director, Herve Milhade, “This is a good opportunity for the country, the soft drinks industry and the business, as the CCBA group has a strong track record on the continent and is committed to sustainable growth where it operates.”

CCBA is the 8th largest Coca-Cola bottling partner in the world by revenue, and the largest on the continent.

It accounts for 40 percent of all Coca-Cola products sold in Africa by volume. With over 16,000 employees in Africa, CCBA services millions of customers with a host of international and local brands.

Its African footprint now encompasses South Africa, Ghana, Ethiopia, Uganda, Kenya, Tanzania, Namibia, Mozambique, Comoros, Mayotte, Zambia, Botswana, Eswatini and Lesotho.

The transaction is subject to obtaining the necessary regulatory approvals, including approval by the Common Market of East & Southern Africa (COMESA) Competition Commission.

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Castel Malawi’s parent company Castle Group has given nod to the deal and the management has assured the staff that it is not planning to give any contract termination or retrenchment packages to employees.

As Castle Malawi offloads the historic unit, the French beverage company through its Ethiopian subsidiary BGI has fostered a deal with competitor Diageo.

The beverage giant has acquired Meta Abo Brewery from the British drinks maker.

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The acquisition extends the dominance of BGI which currently boasts of having over 50 percent market share of the Ethiopian beer market.

The deal is subject to approval by the Ethiopian Competition Commission and certain conditions and is expected to be completed by early 2022.

Meanwhile, Diageo has stated that it will “continue to service the Ethiopian market with its international spirits portfolio through its dedicated imported spirits channel”.

Diageo took over the reins of the brewery which was initially government owned, exactly a decade ago, after sealing a US$255 million privatization deal.

Following the acquisition, Meta Abo joins BGI’s other five breweries i.e., St. George Brewery in Addis Ababa, the Kombolcha Brewery, the Hawassa Brewery, Zebidar Brewery and Machew Northern Brewery with a combined production capacity of 3.6 million Hectoliters of beer annually.

The company also owns and manages the Castel Winery and vineyard located in the town of Zeway. Established in 2012, the winery produces 12,000 Hectoliters of different wine varieties annually under the brand names Acacia and Rift Valley.

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