Diageo has sold its Meta Abo brewery in Ethiopia to Castel’s BGI. The move means that Diageo effectively exits the Ethiopian beer market and will now focus exclusively on its spirits portfolio. BGI will now have more than 50% market share, ahead of Heineken.
The deal is subject to approval by the Ethiopian Competition Commission. It is expected to be completed by early 2022. Diageo acquired the brewery in 2012 from the Ethiopian government in a $225m privatisation deal.
In 2015, Diageo officially opened a new $119m bottling line expansion in Sebeta, a town just southwest of the capital, Addis Ababa. The new line tripled the annual capacity of the brewery to 1.7m hectolitres.
BGI Ethiopia owns the St. George and Amber brands and produces Castel under license. BGI Ethiopia has an annual production capacity of 5m hectolitres. Meta Abo joins BGI Ethiopia’s five brewery sites: St. George Brewery in Addis Ababa, the Kombolcha Brewery, the Hawassa Brewery, Zebidar Brewery and Machew Northern Brewery.
With the Diageo acquisition, BGI will have an annual production capacity for beer of up to 6.7m hectolitres. Castel also produces wine in Ethiopia from its Zeway vineyard, which it established in 2012. It also BGI launched the non-alcoholic malt-based brand SEN’Q into Ethiopia in 2020.
In August 2011, Heineken acquired the state-owned Bedele and Harar Breweries for $163m.In 2018, Heineken invested $146m to increase capacity at another brewery at Qilinto brewery in Addis Ababa to take its total capacity in the country to 5.5m hectolitres.
The Diageo exit means that the Ethiopian market will be dominated by just two companies, Heineken and Castel. AbInBev does not brew in Ethiopia (BGI built some of its brewery network by buying a majority stake in the Zebidar Brewery from Unibra). A third company, Dashen Brewery, is co-owned by Vasari Global (Vasari), UK-based asset management firm Duet Group (Duet), and the TIRET Group (TIRET), an Ethiopian endowment fund. In May 2019 it inaugurated the largest single brewery in Ethiopia with a total annual production capacity of 2m million hectolitres of beer.
