EABL’s new Sh10 spirit lifts sales as tax hits Senator

A kegging line at the East African Breweries Limited plant in Ruaraka, Nairobi. FILE 

By MUGAMBI MUTEGI

In Summary

• Diageo, which owns 50.08 per cent of EABL, has disclosed the keg spirit dubbed Jebel Gold and its bottled version now account for nearly half of the spirit sales growth.
• EABL expects its spirit business to grow by between 10 and 20 per cent annually over the next three years. Its spirit brands include Kenya Cane, Kenya Gold and V&A.

East African Breweries Limited’s (EABL) recently launched Sh10 keg spirit has emerged as key revenue driver following the dip in sales of Senator Keg after the introduction of a tax on the low-end beer.

Diageo, which owns 50.08 per cent of EABL, has disclosed the keg spirit dubbed Jebel Gold and its bottled version now account for nearly half of the spirit sales growth.

Jebel Gold is sold at between Sh10 and Sh15 for a 30ml tot, which is measured using a special dispenser, while its bottled version retails at Sh100 for a 200ml bottle.

The tot was introduced in the second half of last year to compensate for Senator Keg losses, which was hit with a new tax charge that drove its price from Sh30 to Sh50 and consequently cutting sales by about 80 per cent.

READ: EABL introduces smaller Keg to beat new tax charge

The bottled Jebel was introduced early last year.

“The success of recent innovations, Jebel and Jebel Gold, a mid-proof spirit in a keg, drove almost half of the spirits net sales growth,” said Diageo in a statement when it released its results two weeks ago.

“In East Africa, spirits net sales grew 24 per cent with Jebel Gin a large contributor to this.”

EABL expects its spirit business to grow by between 10 and 20 per cent annually over the next three years. Its spirit brands include Kenya Cane, Kenya Gold and V&A.

The impact of Senator Keg losses will be known this morning as EABL announces its results for the six months to December.

Diageo on January 30 said EABL’s beer sales in Kenya — save for Senator Keg — posted a double-digit growth in net sales led by Tusker and Guinness.

“Our other beer brands in Kenya have performed well and sales, excluding Senator, were up 23 per cent,” said Diageo while announcing its half-year results.

But the UK brewer says that EABL, which includes Uganda and Tanzania operations, reported sales growth of three per cent in the six months to December compared to the 10 per cent increase in the same period a year earlier.

This signals that the Ugandan and Tanzania subsidiaries slowed down EABL. The two countries accounted for 28.4 per cent of the regional brewer’s sales in the year to June.

READ: EABL sheds Sh17 on Friday as Diageo reports brewer’s slower half year sales