ADDIS ABABA: Although current alcohol consumption rates in Ethiopia keep it as one of the lowest in the East African region, Dutch brewer Heineken believes the market is ripe for an entrance. They believe Ethiopia is an untapped market where beer could become a kind of national drink. According to reports on Thursday, Heineken is to establish the country's largest brewery, able to deliver some 1.5 million hectoliters of Harar, Bedele and Heineken branded beer. The brewery will cost around $156 million to establish and the company believes it will pay off. All this is part of Heineken's continued global expansion, into Southeast Asia as well as into Africa, where in 2011 the company garnered some 18 percent of Ethiopia's local market by acquiring Bedele and Harar for $85 million and $78 million, respectively. Sellers in the capital, Addis Ababa, are also hopeful that it will spur more drinking. “I hope this means the prices will go down somewhat. Right now it is too expensive for a lot of people,” one alcohol seller told Bikyanews.com on Saturday. For Africa's second-largest country by population, Heineken feels the time is now to enter the local beer market. According to Financials Times of the UK, a deal was inked last week between Netherland's Minister of Foreign Trade Lilianne Ploumen and two Ethiopian institutions for the project to develop malt barley in the East African country, which is vital to beer-making. John Dover, general manager of Heineken Ethiopia, was quoted as saying: “As a brewer we are very committed to the African continent and the opportunities it presents. Heineken aims to be a Partner for Growth for its communities and developing better techniques and a better route to market for local produce, which also allows us to increase the amount of raw materials we can obtain through local sourcing is a key part of that." Ethiopia is seeing an influx in European beer companies aiming to make a move in the country. The UK's Diageo last year snapped up Meta Abo Brewery, maker of the country's number two beer brand Meta, in a $225 million all cash deal. A Diageo spokesman told beyondbrics: “We have since invested in increasing production through supply efficiencies, increasing our sales force and broadening our outlet coverage as well as investing in building the Meta brand which has led to market share growth. “We are also working closely with the Ethiopian Government and smallholder farmers in a pilot project to sustainably secure quality barley inputs into the brewery from the local community. We are committed to building our business in Ethiopia, which is fast becoming an important contributor to our growth in Africa," he said. BN
