Serengeti Breweries launches new beer pack for Pilsner Lager

TANZANIA – Serengeti Breweries, a subsidiary of East African Breweries Ltd (EABL), has launched a new beer pack for its Pilsner lager brand in a bid to penetrate wider market, targeting consumers in the Lake zone regions in Tanzania.

SBL said the new beer pack is intended to give consumers and the market more and best choices at reasonable price, reports Daily News.

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“The residents from the lake zone regions who are famed for their hardworking spirit will enjoy Pilsner lager 300ml dubbed ‘imara kama simba’ at affordable retail prices,” said the SBL Head of Beer, Anitha Msangi.

The brewer sources locally barley, maize and sorghum for its beer production, growing its cereal uptake from zero to 15,000 metric tonnes of grain which is equivalent to 60 per cent of the total raw materials needed for beer production per year.

SBL is the second largest beer company in Tanzania, with its beer brands accounting for over 20 per cent of the market by volume.

Through product innovation the brewer seeks to boost its market share and grow its product portfolio year on year.

In other related news, SBL’s sister company, Kenya Breweries Limited (KBL) is set to increase the price of its bottom-end beer, Senator Keg, by Sh10 for the 300ml mug in response to the Treasury plan to increase tax on sorghum-based alcoholic drinks.

The National Treasury of Kenya has proposed to review regulations that offer huge tax breaks to brewers using sorghum, millet and cassava in making the Keg beer from 80 per cent to 60 per cent.

The Excise Duty (Remission of Excise Duty) (Amendment) Regulations, 2017, allows the manufacturers of Keg that is largely consumed by low income earners, to make an application to the Cabinet secretary Treasury to grant remission of excise duty at 80 per cent.

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Treasury CS Ukur Yatani has, however, proposed to review this remission downward to 60 per cent in the draft Excise Duty (Remission of Excise Duty) (Amendment) Regulations, 2020.

This comes as the brewer reels from the impact of temporarily closing the refurbished Kisumu plant due to lack of demand as a result of measures to curb coronavirus.

KBL closed the factory on March 23 after the government ordered bars shut to contain Covid-19, making it impossible for keg to be sold since it has no take-home option as is the case with beer and spirits.

The firm says the proposal by Treasury to reduce excise duty remission on millet, sorghum and cassava will slash demand for Keg by more than half at a time when the brand is already staggering from Corona containment measures.

KBL managing director Jane Karuku wants the National Treasury to drop the proposal, warning that it will see the firm lose more consumers to illicit brews, rendering the Sh15 billion (US$141.3m) Keg-exclusive Kisumu factory redundant, reports Business Daily.

She says in submissions to CS Ukur Yatani that current restrictions on sale of alcohol to mitigate the spread of coronavirus was going to cut sorghum demand by 58 percent but a reduction in forgiven tax will take that to 84 per cent.

“The reduction will be due to excise-driven increase in the price of a single 300ml serve of Keg beer by 35 percent or Sh10 from an effective consumer price of Sh28.50 to Sh38.50,” said Ms Karuku.

Keg has grown to be among revenue drivers for East African Breweries (EABL).

Senator Keg closed financial year ended June 2019 as the fastest growing brand, having added Sh3.7 billion (US$34.86m) in revenues as its net sales jumped by a third.

Excise duty remission was at 30 percent in 2004 but the government increased it to 100 percent in 2006 to support local manufacturing and discourage illicit brew consumption.

However, this was halved in 2013, causing Keg volumes to plummet by 59 percent in 2013/2014 financial year. The remission was raised to 90 percent in 2015 then cut to 80 percent the following year.

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