East African Breweries Explained

East African Breweries Limited
Type:	Public
Location City:	Nairobi
Location Country:	Kenya
Industry:	Alcoholic beverage
Products:	Beer
Revenue:	US$699.8 million (2014)
Owner:	Diageo
Num Employees:	1,653 (2014)
Homepage:	http://www.eabl.com
Net Income:	US$118.7 million (2014)

East African Breweries Limited, commonly referred to as EABL, is a Kenyan-based holding company that manufactures branded beer, spirits, and non-alcoholic beverages.

Overview

The group's headquarters are located in Nairobi, Kenya, with subsidiaries in Kenya, Uganda, Tanzania and South Sudan. The group has distribution partners in Burundi, Democratic Republic of Congo and Rwanda.

History

1920–1949

East African Breweries Limited was founded in 1922, as Kenya Breweries Limited (KBL), by two Welshmen, George and Charles Hurst. The company was owned by the Dodd family of Kenya.

KBL acquired Tanganyika-based Tanganyika Breweries in 1935 and 1936 these two companies were merged leading to the creation of the East African Breweries Limited (EABL).^[1] The group continued expanding locally through the opening of more breweries such as Mombasa brewery.

1950–1999

In 1954, EABL got listed on the Nairobi Securities Exchange. This was among the first listings in the region's oldest stock exchange. As a group, EABL expanded into Uganda through the acquisition of Uganda Breweries in 1959.^[2]

In 1964, the group's subsidiary name in present-day Tanzania was changed from Tanganyika Breweries Limited to Tanzania Breweries Limited (TBL) following the political unification of Tanganyika and the People's Republic of Zanzibar and Pemba to form the United Republic of Tanzania. This led to increased market for the group through the creation of the union. However, in 1979 the Government of Tanzania nationalized TBL as part of the Arusha Declaration.^[3] The group officially opened Central Glass Industries Limited (CGI) in 1987, as a producer of glass containers and bottles, therefore leading to internal sourcing.

2000–2010

In 2000, Diageo acquired majority control of EABL and in the following year the group cross-listed its share on the Uganda Securities Exchange. EABL is a constituent company of the NSE 20 Share Index.^[4]

The beer wars

In the late 1990s to the early 2000s was a period of beer wars in East Africa involving South African Breweries International (Now SABMiller) and EABL.

These wars ended in 2002 when EABL signed license agreements with South African Breweries International and agreed to terms for share swap in their subsidiaries: Kenya Breweries Limited and Tanzania Breweries Limited (now an SABI subsidiary).

In share exchange EABL acquired a 20% equity stake in TBL and agreed to issue SABI a similar share Kenya Breweries Limited.

And SABI exited the Kenyan market while EABL exited the Tanzanian market by handing over its Kibo subsidiary to TBL.This partnership gave TBL 98% share of the Tanzanian market as of 2004.^[5]

In the same year, EABL acquired 100% of shares in International Distillers Uganda Limited and 46.32% of the issued shares of UDV Kenya Limited.

The partnership between EABL and SAB Miller in Tanzania went through turbulence in 2009, with EABL claiming breach of contract by Tanzania Breweries (TBL), a subsidiary of SAB Miller, accusing it of manufacture of low quality EABL products under a previously agreed arrangement and at the same time restricting access to the Tanzanian market of some of Diageo/EABL products.

This led to EABL's acquisition of 51% of Serengeti Breweries Limited (SBL) and exit from TBL's shareholder structure through a $71.5 million successful secondary offer on the Dar es Salaam Stock Exchange in 2011.^[6] SAB Miller sold it stake Kenya Breweries to East African Breweries.

2010 – To date

In 2013, EABL commenced operations in South Sudan through the establishment of East African Beverages South Sudan Limited (EABSS) as a depot in Juba in order to reduce over reliance on third party distributors' logistical arrangements that led to periodic stock outs.

Subsidiaries

The subsidiaries of EABL include:^[7]

Current group companies

• Kenya Breweries Limited (KBL) – Nairobi, Kenya- 100% Shareholding -Established in Kenya in 1922. The company's core business is brewing of Beer and bottling of non-alcoholic malt beverages.^[8]
• Uganda Breweries Limited (UBL) – Port Bell, Uganda – 98.2% Shareholding – UBL has been a brewer in Uganda since 1946.^[9]
• United Distillers Vintners (Kenya) Limited (UDV) – Nairobi, Kenya – 46.32% Shareholding – UDV was established in 1962. UDV Kenya Limited is majority owned by Diageo PLC, which holds 53.68% shares. EABL manages the company on behalf of Diageo. Its core business is the manufacture, marketing and sales of spirit based alcoholic beverages. It also imports and distributes premium spirit brands from the parent company.^[10]
• International Distillers Uganda Limited (IDU) – Port Bell, Uganda – 100% Shareholding – Acquired in June 2012 from Selviac Nederland, is a subsidiary of Guinness UDV.^[11] The company manufactures, markets and sales of spirits in Uganda.
• East African Maltings (Kenya) Limited – Nairobi, Kenya – 100% Shareholding – EAML-Kenya plays a vital role of supplying quality brewing raw materials in the form of Malt, Barley and Sorghum to the brewing units of the EABL group in Kenya.
• East African Maltings (Uganda) Limited – Kampala, Uganda – 100% Shareholding – EAML-Uganda plays a vital role of supplying quality brewing raw materials in the form of Malt, Barley and Sorghum to the brewing units of the EABL group in Uganda.
• EABL International Limited – Nairobi, Kenya – 100% Shareholding – EABLi (formerly EABL Venture) was set up in 2009, the venture's business was to focus on building the Spirits business in Eastern Africa and driving the geographic expansion through greater focus to drive a total beverage business and through expansion into new markets such as The Great Lakes Region. EABLi operates in Southern Sudan, Rwanda, Burundi and DRC through third party supply, exports, and covering the spirits portfolio for both domestic and duty-free sales as well as beer sales in the markets where the group does not have local operations.^[12]

• Serengeti Breweries Limited (SBL) – Dar Es Salaam, Tanzania – 51% Shareholding – SBL is the second largest beer company in Tanzania, with a market share of approximately 28% of the Tanzanian branded beer sector. The company was incorporated in 1988 as Associated Breweries Limited. Its name was changed to Serengeti Breweries Limited in 2002. EABL acquired 51% of the issued share capital of SBL in October 2010.^[13]
• East African Beverages South Sudan Limited (EABSS) – Juba, South Sudan – 99% Shareholding – EABSS commenced operations in 2013 with the set-up of a depot in Juba from which it would supply beer and spirits to its distributors.

Previous investments

• Central Glass Industries Limited (CGI) – Nairobi, Kenya – Established in 1987, as a wholly owned subsidiary, to produce glass containers in flint, amber and green to internationally required standards. CGI is the leading container glass manufacturer in Kenya. CGI exports more than 50% of it products to countries such as Uganda, Tanzania, Ethiopia, Rwanda, Burundi, Eritrea, Seychelles, Réunion, Mauritius, Zimbabwe, Zambia and Angola.^[14] CGI was acquired by South African-based Consol Glass in May 2015 for US$47 million.^[15]

Ownership and listing

The group's largest shareholder is Diageo Plc. EABL is listed on the Nairobi Stock Exchange, Uganda Securities Exchange and Dar es Salaam Stock Exchanges. The shareholding in the group's stock was as depicted in the table below:

East African Breweries Limited Stock Ownership
Rank Name of Owner Percentage Ownership 1 65.00 2 Others via NSE, USE and DSE 35.00 Total 100.0

Products

Tusker brands

Tusker
Type:	Beer, pale lager, premium lager
Abv:	4.2% (regular) 5.0% (malt) 4.0% (lite)
Manufacturer:	Kenya Breweries
Origin:	Kenya
Introduced:	1922

Tusker is the main brand of Kenya Breweries with over 30% of the Kenyan beer market selling more than 700,000 hectolitres per year. Tusker is also the largest African beer brand in the Diageo group.^[16] It is a 4.2% ABV pale lager. The brand was first marketed in 1923, shortly after the founder of Kenya Breweries Ltd, George Hurst, was killed by an elephant during a hunting accident. His remaining founder and brother Charles decided to name the company's first lager, Tusker, since large, male elephants indigenous to East Africa, were called tuskers.^[17] It was in this year that the elephant logo, that is synonymous with Tusker Lager, was incorporated. The slogan "Bia Yangu, Nchi Yangu", means "My Beer, My Country" in Swahili.

In early 2008, the UK supermarket chain Tesco began selling Tusker, followed soon after by Sainsbury's.^[18]

Varieties

• Tusker, sold in keg, widget cans and bottles: 4.2% ABV pale lager
• Tusker Malt: 5.0% ABV premium lager
• Tusker Lite: 4.0% ABV lite lager

Tusker Lager, Tusker Malt Lager, Pilsner and White Cap Lager have received each a Gold Quality Award at the World Quality Selections, organised yearly by Monde Selection, a highly respected International Quality Institute.^[19]

Other brands

The company also makes Uganda Waragi, a 40% ABV brand of waragi, a traditional Ugandan liquor, and the leading branded distilled beverage in Uganda. It is triple distilled and made from millet. It is known in Uganda as "the Spirit of Uganda". The main markets include other African countries such as Rwanda, the Democratic Republic of Congo and Sudan.^[20]

In 1965, "The Enguli Act" decreed that distillation would only be legal under license, and distillers should sell to the parastatal Uganda Distilleries Limited, which produced a branded bottled product, marketed under the name Uganda Waragi.

• White Cap Lager 4.2%
• White Cap Crisp3%
• Pilsner 4.7% Pale Lager
• Pilsner Ice – 5.2% ABV pale lager
• Guinness Foreign Extra Stout – 7.5% ABV stout
• Allsopps Lager – 5.5% ABV lager
• Senator Lager – 6.0% ABV barley beer
• President Extra Lager – 6.6% ABV lager
• Bell Lager
• Serengeti Lager

EABL Foundation

The EABL Foundation is the corporate social responsibility arm of East African Breweries, founded in 2005. It assists people in Kenya, Uganda and Tanzania through five areas of activity: water supply, education and training, health, environment, and special projects. Through the skills for life program, The EABL Foundation provides scholarships for undergraduates^[21] in the three East African Countries.

Its ongoing projects include the construction of an optical center in Moshi, Tanzania, the support of the Sickle Cell Association of Uganda and the donation of an Ultra Sound Machine to Kirwara Hospital in Thika, Kenya. The foundation has supplied over KSh.70 million/= (approx. US$972,000) in university scholarships.

The EABL Foundation conducts special projects in times of disaster and when emergency relief is needed. Most recently, the foundation took part in the Save A Life Fund, in which it donated over KSh.14 million/= (approx. US$194,000) towards famine relief.^[22]

Association football sponsorships

Kenyan Premier League

See main article: Kenyan Premier League. On 21 August 2012, the company signed a deal worth KSh.170 million/= (US$2.02 million; £1.28 million stg; €1.62 million) with the Kenyan Premier League for its renaming to the Tusker Premier League. This made it the most lucrative deal ever made in Kenyan football history.^[23]

Tusker F.C.

See main article: Tusker F.C.. Tusker FC is a football club owned by East African Breweries. It is based in Nairobi, Kenya. It is the third most successful club in Kenya with eight Kenyan league championships and three Kenyan cup wins. In addition, it has won four East African CECAFA Clubs Cup titles.

The club was known as "Kenya Breweries" until 1999, when the current name was adopted. Tusker has two home stadiums, the Moi International Sports Centre, where it mainly plays its home matches, and the Ruaraka Sports Ground.

CECAFA Cup

In August 2012, East African Breweries signed a sponsorship deal worth US$450,000 with CECAFA to have the CECAFA Cup renamed to the CECAFA Tusker Challenge Cup.^[24]

See also

• Beer in Africa
• Beer in Kenya
• Beer in Tanzania

References

Bibliography

• Justin Willis, Potent Brews: A Social History of Alcohol in East Africa, 1850–1999, British Institute in Eastern Africa (2002),

External links

• East African Breweries Ltd.
• Profile of East African Breweries at myStocks KE
• Nairobi Stocks Exchange
• EABL Foundation.

Notes and References

1. Web site: East African Breweries Limited – EABL History. eabl.com. 2017-08-22. https://web.archive.org/web/20170822175031/https://www.eabl.com/about-us/our-history. 22 August 2017. dead.
2. Web site: EABL Information Memorandum. 2015-03-03. 2015-03-21. EABL. 2 April 2015. https://web.archive.org/web/20150402221613/https://www.eabl.com/downloads/Information_Memorandum_V2.pdf. dead.
3. News: History of TBL. SaaHiiHii. 2017-09-06. lt. https://web.archive.org/web/20160921035035/http://www.saahiihii.com/storyPage.php?lang=LTH&page=ABOUT&section=PRODUCTION&story=1&businessNo=1217&action=card. 21 September 2016. dead.
4. Web site: NSE 20 Share Index 2019 – Constituent Companies. 22 December 2018. 6 January 2018. Alchemy Kenya. 6 January 2019. https://web.archive.org/web/20190106155004/https://alchemy.co.ke/corporate/nse-20-share-index-2019-companies/. dead.
5. Web site: Tanzania Breweries Limited – 2013 Annual Report. 31 March 2013. 12 February 2016. TBL.
6. News: EABL gets nod to sell stake in SABMiller's unit. Reuters. UK. 2017-08-22. en-GB.
7. Web site: EABL 2011 Annual Report. 30 June 2011. 16 September 2014. EABL. 31 October 2013. https://web.archive.org/web/20131031045928/https://www.eabl.com/downloads/annual-report-2011.pdf. dead.
8. Web site: About Kenya Breweries Limited KBL. 2014-09-16. EABL. 19 May 2015. https://web.archive.org/web/20150519033418/http://m.eabl.com/about-us/the-group/kenya-breweries-ltd. dead.
9. Web site: Uganda Breweries Limited UBL. 2014-09-16. EABL. 7 March 2014. https://web.archive.org/web/20140307025620/http://m.eabl.com/about-us/the-group/uganda-breweries-ltd. dead.
10. Web site: United Distillers Vintners UDV. 2014-09-16. EABL. 25 April 2015. https://web.archive.org/web/20150425031836/http://m.eabl.com/about-us/the-group/utd-distillers-vintners. dead.
11. Web site: East Africa: EABL to Buy Distillers in Kenya, Uganda. 2002-06-24. 2014-09-16. All Africa.
12. Web site: EABL International EABLi. 2014-09-16. EABL. 27 April 2015. https://web.archive.org/web/20150427192832/http://m.eabl.com/about-us/the-group/EABL-international. dead.
13. Web site: Serengeti Breweries Limited SBL. 2014-09-16. EABL. https://web.archive.org/web/20160303222401/http://m.eabl.com/about-us/the-group/serengeti-breweries-ltd. 3 March 2016. dead.
14. Web site: Central Glass Industries . 2014-09-16. EABL. https://web.archive.org/web/20140307025553/http://m.eabl.com/about-us/the-group/central-glass-industries. 7 March 2014. dead.
15. Web site: EABL to earn Sh4.5bn from sale of glass firm. 2015-05-12. 2015-05-14. Business Daily Africa. Nation Media Group. Mutegi. Mugambi.
16. Web site: British Guild of Beer Writers . 12 November 2008 . https://web.archive.org/web/20110722044436/http://www.beerwriters.co.uk/news.php?x=1&showarticle=346&PHPSESSID=a0a6d73a3a25ca09a5f47 . 22 July 2011 . dead .
17. News: The Agora. TUSKER : THE STORY BEHIND THE NAME. 13 August 2014. The Agora. Tusker. https://web.archive.org/web/20160530055405/http://www.theeagora.com/tusker-the-story-behind-the-name/. 30 May 2016. dead.
18. Web site: Tusker lager wins Sainsbury's listing – Talking Retail . 12 November 2008 . https://web.archive.org/web/20080705150337/http://www.talkingretail.com/products/8384/Tusker-lager-wins-Sainsburys-l.ehtml . 5 July 2008 . dead .
19. http://www.africanselect.com/scripts/cgiip.wsc/tradeone/html/news_article.r?vcnews-id=32 Kenya Breweries Achieves Gold At Monde Selection
20. Web site: East Africa Breweries Limited:: . 12 November 2008 . https://web.archive.org/web/20070311132854/http://www.eabl.com/eainner.asp?pcat=UDVPROD&cat=51 . 11 March 2007 . dead .
21. Web site: EABL Foundation. EABL Foundation Scholarships. eablfoundation.com. 13 August 2014. EABL Foundation Scholarships. https://web.archive.org/web/20140903092944/https://www.eablfoundation.com/focus-areas/skills-for-life. 3 September 2014. dead.
22. Web site: EABL Foundation – Eabl Foundation Success Stories. eablfoundation.com. 2017-08-22. https://web.archive.org/web/20140903092433/https://www.eablfoundation.com/success-stories. 3 September 2014. dead.
23. Web site: KPL now Tusker PL in Sh170m deal . . 21 August 2012 . 21 August 2012.
24. Web site: Challenge Cup brought forward . Bonnie Mugabe . 30 August 2012 . . 1 September 2012 . dead . https://web.archive.org/web/20140222135559/http://www.newtimes.co.rw/news/index.php?i=15100&a=57682 . 22 February 2014 .