Staff will be retained, Nigerian takes over as manager
A UK based alcohol distributor of beer, spirits and wine has become the third European company investing in Ethiopia’s beer industry along with BGI Ethiopia and Heineken, who bought Bedele and Harar last year.
Diageo, a major distiller of drinks, offered 225 million dollars for Meta, at the Privatization and Public Enterprises Supervising Agency (PPESA) bid in early September 2011. It officially was handed over the brewery Tuesday January 10 at a ceremony held at the compound of the brewery, 25Km west of Addis Ababa around Sebeta town.
With Diageo’s acquisition, the government is no longer involved in beer. Previously it owned Meta, Harar and Bedele.
“I am delighted that we are able to announce the completion of this acquisition which represents a key milestone in achieving our strategy of participating at a large scale in beer and spirits in growth markets in Africa. We will invest behind the long-term growth of the brand, the Meta business, and the wider communities in Ethiopia,” Nick Blazquez, president of Diageo Africa said at the acquisition ceremony.
The acquisition will give Diageo direct access to the rapidly growing Ethiopian beer market. According to an Access Capital study, beer in Ethiopia is estimated to continue to grow at more than 10 percent per annum up to 2015, driven by strong GDP growth and increased disposable incomes.
At the official handing over ceremony, Diageo also announced the immediate appointment of Francis Agbonlahor as managing director for Meta. Francis is coming from Diageo’s Nigeria branch.
Solomon Kebede, former general manager of Meta, will be the advisor for the new managing director.
The new company has promised to maintain all their staff and will provide training to improve their skills.
“Through combining the strength and heritage of Meta with our international brand and innovation credentials, we will grow the brand and the business. We want Meta to be enjoyed by more consumers across Ethiopia and beyond,” the Diageo Africa head added.
According to a Diageo statement, the transaction also represents a significant investment by the UK in Ethiopia, contributing on a number of levels to the government’s Growth and Transformation Plan.
“These include supporting local agricultural development, investing in and stimulating a competitive beer industry, and researching options to increase product exports,” the statement explained.
Meta brand is the second popular beer brand in the country with a market volume share of approximately 15 percent. Currently it produces Meta and Meta Premium lager brands. The location of Meta in the central part of the country is strategic for the beer market.
Diageo’s brands include Johnnie Walker, Crown Royal, J&B, Windsor, Buchanan’s and Bushmills whiskies, Smirnoff, Ciroc and Ketel One Vodkas, Baileys, Captain Morgan, Jose Cuervo, Tanqueray and Guinness.
Diageo’s beer brands that used to be imported will now be produced here, although it will take a few years to complete expansion projects.
Diageo operates production and distribution facilities that include malting, distilleries, breweries, packaging plants, maturation warehouses, cooperages, vineyards, wineries and distribution warehouses.
In a one year report that ended in June 2011, the company’s net profit rose to 1.9 billion pounds from 1.6 billion pounds a year earlier. Net sales rose to 9.9 billion pounds, the distiller’s annual report indicated.
BGI, the leading brewery in the country with an over 50 percent market share, is the first European brewery to invest in Ethiopia. It purchased St George, the first beer maker in the country. Currently, BGI produces the most popular St George, Castel and Bati beer brands and has three breweries in the country that produce 2.17 million hectolitres per annum.