Battle for Kenya beer market heats up with entry of Atlas Beer

June 2, 2016
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Jovet Kenya Ltd, the local distributor signed the deal to distribute Bavaria’s major rival brand Atlas Beer/COURTESY
Jovet Kenya Ltd, the local distributor signed the deal to distribute Bavaria’s major rival brand Atlas Beer/COURTESY

, NAIROBI, Kenya, Jun 2 – Battle for beer market in the country is set to turn a new heat as former Kenya Distributor of Bavaria Beer Jovet Kenya Ltd signed a new deal with another Dutch brewer to enter the Kenya market.

Jovet Kenya Ltd, the local distributor signed the deal to distribute Bavaria’s major rival brand Atlas Beer.

This comes after the local distributor was dropped by Bavaria Beer, after distributing for them for about 10 years.

Following the drop, Jovet Kenya Ltd sued Dutch brewer seeking compensation for the investments it made over the last 10 years to market and sell the brand before the Bavaria distributorship deal is transferred to another party.

“It is unfair that I have already spent a lot of money on branding and distribution, then now the company wants to take this away from me after 10 years of hard work, just because sales are now solid,” said Daniel Munene, director of Jovet Kenya in a case filed at the Milimani Commercial Court.

The court temporarily stopped Bavaria N.V from terminating the importation and distribution agreement held by Jovet Kenya pending an inter-parties hearing.

Speaking to Capital FM Business UDB Sales Manager Africa Sander Bos says the Kenyan market is very promising and progressive as one of the largest beer market in Africa.

“The Income class in Kenya is growing, creating demand for quality beer which gives us an opportunity to tap into it. In Africa the beer Market is growing by 5 to 6 per cent each year this is huge for any brewer,” Bos explained.

This is the third Dutch Brewer in the country after Heineken and Bavaria.

“The market is large enough for having several products available in the market; we believe we have a good position due to our wider range of products that will be brought in the market,” he said.

Atlas was founded in the 50’s in the South of the Netherlands, over time the brand has developed itself into a true strong beer specialist, developing several kinds of strong beers.

UDB is the third largest brewer in Netherlands after Heineken and Bavaria.

In March, 2016 businessman Ngugi Kiuna, through three of his distribution firms, sued Dutch beer maker Heineken over breach of a deal.

Heineken had cancelled the firms’ exclusive distribution deals for the beer in Kenya, Uganda and Tanzania. The beer through its lawyer said under the contract it was allowed to end the deal without any explanations.

Heineken wants to give distributorship to more firms, ending the exclusivity enjoyed by Kiuna’s companies.

The three firms said in papers filed in court they have grown the turnover of Heineken locally to Sh1.8 billion last year from Sh1.3 billion in 2014.

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