Beer consumers shift to �quarts� as levy bites
Pauline Dikuelo | Monday July 28, 2014 17:35
The retail price for KBL 340ml canned and bottled beer hovers around P11 while the 750ml bottles popularly known as quarts are sold for an average of P15.
“We have noticed that 750ml have regained momentum as people have shifted to them because they are cost effective,” De Kok noted during the Sechaba Breweries financial results briefing last Thursday.
The Alcohol levy was increased from 45 percent to 50 percent last December fuelling the change in consumption patterns as KBL hiked prices.
De Kok said the last levy increase led to the local demand for the 750ml bottles increasing by 20 percent in six months something that usually takes other countries three to seven years to achieve.
As part of their strategy to meet demand, De Kok said that they are planning on introducing a new 750ml bottle line in 2015 at their beer plant for a total cost of P89.9 million.
He further cited that they intend to expand the current warehouse at their Gaborone offices to the tune of P30 million this year and another P56 million next year.
Despite the decline in the total alcoholic beverages consumption, De Kok noted that Black label and Castle Lite brands continue to lead the recovery in the market share thus limiting overall volume decline.
He however noted disappointment in the St Louis brand, which has declined by one percent in the year ended March 31, 2014 noting that they are currently working on some strategy to increase its sales.
“ I want to assure our clients that they should expect something exciting in the next three months concerning the St Lois brand,” he said.
In the period, the alcoholic fruit beverages also recorded a 13 percent decline, which De Kok claimed not to be negative as they encountered some challenges from their producers in South Africa.
He however said that in the next three months, KBL would start producing the beverages locally.
Concerning the traditional beer regulations, the managing director said that they continue to engage authorities in a bid to find a solution.
“We are all aware that the traditional beer is facing challenges, the company has intensified efforts to engage local authorities in attempts to formalise and establish its distribution network in line with the regulations.”
De Kok further blamed the competitors for their poor performance in the soft drink category, which declined by one percent. He noted that their competitors are selling lower quality brands at cheaper prices, which has made the trading environment tough for KBL.