- Between them, Heineken and SAB have now placed holds on R8.5 billion worth of investment they had planned in brewing capacity in South Africa.
- SAB has another R2.5 billion in projects “on review”.
- That is not counting many craft brewers and artisanal alcohol producers that have halted expansion or shut down operations.
- For more stories go to www.BusinessInsider.co.za.
In 2019 Dutch brewer Heineken declared itself “hugely optimistic about South Africa” as it prepared to spend another R1 billion to upgrade its local output of beer.
Almost exactly a year later, it this week announced a halt to a project to build a giant, R6 billion brewery on the North Coast of KwaZulu-Natal, at Inyaninga near the Dube TradePort.
The sudden second prohibition on alcohol sales had caused “suffering, stress and panic”, Heineken said in a pointed statement.
That brings to R8.5 billion the confirmed investments in breweries that has at least been delayed, after South African Breweries (SAB) announced it was halting R2.5 billion worth of capital investment this year.
The total number could easily breach R10 billion, with another R2.5 billion in SAB’s planned expenditure next year “on review”.
At a far smaller scale, many other projects involving alcoholic beverages have been halted, while an increasing number of small producers shut down, ranging from alcoholic ice cream ventures to craft brewers.
Craft breweries have grown to such an extent that they have their own mapping service, and until recently “hundreds” of new players sought to enter the market every year.
But both established and embryonic enterprises tend to lack the kind of capital or resilience that would allow them to survive several months of zero sales, never mind expanding after such an episode, industry insiders say – even if the basic infrastructure they rely on had not been shutting down around them.
(Compiled by Phillip de Wet)
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