Diageo sells Ethiopian brewery Meta Abo to competitor Castel Group

ETHIOPIA – Castel Group, a multinational beverage company, has cemented its dominance in the Ethiopian market with acquisition of competitor’s brewery.

According to reports by Capital Ethiopia, the French company has acquired Meta Abo Brewery from British beverage alcohol manufacturer Diageo.

The acquisition extends the dominance of Castle group through its subsidiary, BGI, which currently boasts of having over 50 percent market share of the Ethiopian beer market.

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

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

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.

Since its acquisition of the brewery in January 2012, the company adhered to a clear strategy with the aim of transforming the brewing industry in Ethiopia.

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In 2015, Diageo officially opened a new US$119m bottling line expansion in Sebeta, tripling the annual capacity of the brewery to 1.7m HL.

This ensured that the company could meet future consumer demand of its products and support the introduction of new product innovations to the Ethiopian market such as Zemen Lager Beer.

The German-manufactured Krones bottling line features state of the art technology, including flash pasteurization, to package products without any human intervention – achieving even higher quality control and upgrading the brewery’s packaging capacity by nearly 50%.

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The new line is highly efficient, reducing waste and the amount of water used in the brewing process.

Later in 2020, Diageo invested US$14 million to expand its malt drinks production, spearheading the launch of its first branded 330ml malt PET bottle of its premium non–alcoholic drink, Malta Guinness.

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.

Despite BGI setting itself up as the dominant player in the alcohol beverage sector, the company is facing heightened competition from both local and international entities such as Heineken, Habesha Breweries, Komari Beverages, among others.

According to Market Research, the beer market in Ethiopia was valued at US$1.07 billion in 2015, with the market expected to reach US$3.12 billion in 2025, registering a CAGR of 10.25% per annum.

One of the most important trends on the beer market is the shift in consumer preference towards low and non-alcohol beers, as well as craft beers.

To this end, Komari Beverages debuted the first hard seltzer brand in the Ethiopian market last year April with the launch of new liqueur brand dubbed Arada.

Meanwhile BGI introduced its first ever non-alcoholic malt-based beverage called SEN’Q into the local market in 2020.

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