Competition heats up for beer market

Friday September 21 2012

Fans wait to be served Bralirwa’s Primus beer at the Guma Guma show in July. Photo/Cyril NDEGEYA

Fans wait to be served Bralirwa’s Primus beer at the Guma Guma show in July. Photo/Cyril Ndegeya Nation Media Group

By ALEX NGARAMBE Rwanda Today

Beer companies are jostling for a share of Rwanda’s lucrative market.

Players in the brewery sector have embarked on aggressive expansion plans in a bid to increase their market share. The beer market is steadily becoming a major contributor to the country’s economic growth.

Traditionally, Brasseries et Limonaderies du Rwanda (Bralirwa), was the sole manufacturer and enjoyed a monopoly, until Brasseries des Mille Collines (BMC), producers of skol beer, opened a plant three years ago and East African Breweries (EABL) also decided to enter the Rwandan market.

Rwanda also imports beer from Burundi, particularly the popular Amstel.

As a result of increasing competition in the beer market, Bralirwa is looking at other opportunities. The company is investing $41 million ($66,247) to expand production of soft drinks for both plants in Kigali and Gisenyi in Western Province.

“We are increasing production to satisfy rising demand in the market,” said Jonathan Hall, managing director of Bralirwa.

Bralirwa is not facing any serious competition in the soft drinks market, but with the entry of BMC and imports from EABL, the company is feeling the pinch in the beer market and was recently accused by rivals of unfair competition and sabotage.

“Competition is good for business because it allows for innovation and delivery of quality products to our clients,” added Mr Hall.

Increased production

In the first half of this year, Bralirwa produced 788,000 hectolitres of both soft drinks and beer compared with 762,000 hectolitres produced during the same period last year. However, the company is not leaving anything to chance despite the increase in production.

One of the factors that determines competition is the price of products and Bralirwa’s competitors are at par in terms of prices.

Skol’s 75 centilitres (cl) bottle goes for Rwf900 ($1.5) while the same size of their new brand “skol Gatanu” costs Rwf600 ($1).

Bralirwa prices its 72cl Primus at Rwf700 (over $1) while a 65cl goes for Rwf900 ($1.5) while Guinness and Amstel cost Rwf600 and Rwf550 respectively.

However, Mr Hall would neither deny nor confirm the changes in the market share after the entry of competitors as Bralirwa is yet to carry out a survey.

“We can’t talk about market share since we don’t have the figures, but the market is growing,” said Mr Hall.

Bralirwa, part of the Heineken group, seeks to continue improving the quality of its products in order to maintain its dominance.

Upgrading of the two plants, which has already commenced, is expected to be complete in the first quarter of next year.

BMC skol, which has a manufacturing plant in Rwanda, is also investing in expansion plans.

“We have invested in the expansion of our factory, which will be unveiled this month,” said Mark Mugarura, head of marketing and communication at BMC skol.

Although Mr Mugarura would not reveal how much the company has injected into the expansion project, he says that after the project is complete, the factory’s capacity will increase by between 30 and 40 per cent.

Annual production

Currently BMC skol produces 100,000 hectolitres annually. “We are relatively new in the market but our product has been doing very well and that’s why we are expanding because of the huge demand,” said Mr Mugarura.

East African Breweries Ltd exports Tusker Lager and Tusker Malt from Kenya while Bell Lager is imported from Uganda.

Andrew Kulayije, EABL country representative in Rwanda, would not comment on competition in the sector.

“Beer companies are registering high sales volumes and as a result they are aggressively competing to make their products the most accessible in all parts of the country,” said Albert Ngoga, a beer distributor in Gikondo, Kigali.

Bralirwa has in the past been accused by competitors of sabotaging promotional events, crushing bottles of competitors as well as pulling down sign posts and placards.