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South African Breweries Ltd boosts presence in premium beer segment

10 September 2003

South African Breweries Ltd (SAB), South Africa’s leading beer producer, today confirms that following the recent introduction of Miller Genuine Draft and Pilsner Urquell into the South African market, both beers are performing ahead of expectations and are now anticipated to collectively outsell SAB’s former import, Heineken, in their first year of sales. SAB’s brewing and distribution arrangement with Heineken was terminated earlier this year as a result of the acquisition of the Miller Brewing Company. Heineken has been on sale in South Africa for ten years.

With compound growth of 16%, the premium beer segment is growing faster than the mainstream market where growth has historically been below 4%. Whilst SAB has over 98% of the overall beer market in South Africa, it has less than 75% of the premium sector which currently represents less than 5% of South Africa’s total beer market.

SAB also launched Sterling Light Lager into the premium segment in the middle of 2002. Since then it has captured more than 20% of the light beer market.

Commenting on the new initiatives, SAB Managing Director Tony van Kralingen, said:

“Despite SAB holding 98% of the market in South Africa, we have only 50% of the overall liquor market which we share principally with brandy, wine and sorghum beer. Over the medium term we see opportunities to increase this figure to nearer 60% through the introduction of new products and a shift from higher alcohol drinks into beer.

“SAB has a good track record in developing brands, evidenced by the fact that Carling Black Label now sells as much as our flagship brand, Castle. We anticipate the premium sector will show double-digit growth for the next 5 -10 years, and over time could represent up to 10% of the total beer market in South Africa.”

ENDS

For further information:

Michael Farr
SAB Ltd
Tel. +27 (82) 924 2267

Notes to editors

The South African Breweries Limited was established in 1895 and currently employs over 5000 people. It owns seven breweries with a brewing capacity of some 30.8 million hectolitres. Total volumes sold during the last financial year to end March 2003 reached 24.4 million hectolitres.

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