Heineken, the second largest brewer in the world, is in talks to acquire South African wine and spirits maker Distell Group Holdings. The move would add valuable non-beer brands to Heineken’s portfolio and provide access for Distell to some of Heineken’s global distribution network.
Distell owns brands including Amarula cream liqueur, Savanna cider, Klipdrift brandy and Nederburg wine. It has one of the most extensive distribution networks of any wine or spirits group in Africa and also owns a 26% stake in Best Global Brands (BGB). BGB is the market leader in the Angolan spirits market and a brand leader in cream spirits in Nigeria. Distell claims to distribute to 32,000 outlets in Africa, up from just 12,000 one year ago.
The South African market, which is critical for both Heineken and Distill, has had a tough 12 months as lockdowns and alcohol bans have served to cut sales. The three initial alcohol sales bans are estimated to have cost R36.3bn ($2.4bn) in lost sales for the industry. Since 2015, Distell’s share price has fallen sharply as ventures in Zimbabwe, Angola and Kenya have been beset by problems and stiffer excise duties on alcohol sales in South Africa have hit growth prospects.
The acquisition would mark a definitive move for Heineken “beyond beer”. In Africa, a link up between Heineken and Distell will raise concerns from both Diageo (strong in East Africa, Ghana and Nigeria) and Castel Group (strong in Francophone West and Central Africa, and Ethiopia).
