KBL pulls products off the market

Koobonye Ramokopelwa - BG reporter
Friday, 07 October 2016
KBL pulls products off the market

Kgalagadi Breweries Limited, the country’s biggest brewer is stopping the production of some of its products, ranging from clear beer to non-alcoholic beverages. In a letter written to retailers and seen by BG Business, the company will no longer produce St. Louis Export (all sizes), Mazoe, Mageu Plain, Minute Maid, Fuze Tea, Fanta Orange (500ml), among others

According to the company, which is the operating unit of listed Sechaba Breweries Holdings Limited, the complete halt of the said brands in the market is part of the brewer’s continued review of product mix for its valued clients and stakeholders.
The letter has not stated the exact time the affected products will be pulled off the market. However, what has been made clear is that some of the products are no longer in the market as their production has been stopped. Those that are still in the market are only in ‘limited’ quantities.

In previous financial results presentations, Managing Director of KBL, Johan De Kok pointed to threats posed by imported clear and soft beverages to its locally produced brands. On a related matter, KBL is reviewing its products range right after SABMiller, its parent company, has been bought for $103 billion by the world’s biggest brewer, AB InBev.

The latest pullout of some of its brands from the market comes months after Sechaba reported a 0, 2 percent decline in sales for the year to March 2016. “This was mainly due to the negative growth of the traditional beer and non-alcoholic beverages categories, at -6, 5 percent  and -16, 5 percent respectively,” said De Kok.

During the same period, alcoholic fruit beverage category recorded an impressive growth of 95 percent in sales volumes, De Kok wrote in the 2016 annual report. Redds Vodka Lemon and Core Original lifted growth during the period under discussion. Carling Black Label continues to pick Sechaba beer volumes for the company with a market capitalisation of P3, 9 billion. De Kok pointed out that the company remains optimistic of the year ahead. This is in part due to improved reliability of water and electricity.
“We are confident that we have the right talent to implement the company strategy successfully,” said the Sechaba boss.

Over the past eight years, the company has been hit by the Alcohol Levy and Traditional Beer Regulation. Reports are that Sechaba and government might soon strike a deal on the non-increase of the alcohol levy and current trading hours which have been reduced.

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