J o e   B l o g

A brewing war

Robert Laing

This article appeared in the Sunday Times as Battle of the beers in SA. Here's my original version.

Green bottles are small beer for South African Breweries, but it is not going to let Dutch brewer Heineken set up in Gauteng without a fight.

It’s still early evening happy hour in the brewing beer war since the 75% Heineken and 25% Guinness-owner Diageo brewery underway in Sedibeng is only scheduled for completion in November next year. And SAB probably has even more time than that since South Africa’s skills shortage is likely to make building on schedule difficult.

In preparation of Heineken's coming attack once its Gauteng brewery is ready, South African Breweries' defence seems to involve lining up green bottles as fast it can.

This week’s launch of Dreher brings SAB’s green bottle range to seven pitted against the three fielded by the Heineken and Namibian Brewery alliance Brandhouse.

So the coming beer war looks like it will be a reprise of "Ten green bottles, standing on a wall". Some must fall since if your average beer oke wanted that much confusion in bottle store aisles, he’d drink wine.

Brandhouse said its Gauteng brewery's initial capacity will be three-million hectolitres with built-in flexibility to expand. The alliance has not revealed all the brands it plans to produce in Gauteng, but confirmed Heineken and Amstel will be on the list.

Beer is broadly split into two retail categories: mainstream “brown bottle” brands like Castle and Black Label which liquor stores sell for around R5.80 per dumpy, and premium “green bottle” brands which go for about R8 each.

SAB monopolised both categories until March last year when Dutch brewing group Heineken yanked the Amstel licence away without warning, ending a 40 year alliance.

Heineken seems to have acted in a fit of pique after clashing with the domestic brewing giant’s global offshoot SABMiller in South America, and neither group was prepared for the sudden vacuum in the South African green bottle beer market.

SAB was quicker on the draw, filling the Amstel void by repackaging Castle Lite in green bottles and launching a pricier version of its Hansa brown bottle beer.

This helped it maintain its hold of the green bottle segment until Heineken began trucking Amstel in from Namibia.

SAB's marketing director Ian Penhale reckons Amstel has clawed back about a third of the market share it used to have when his company represented it.

Amstel’s gain has come at Hansa Marzen Gold’s expense, but Penhale said that was anticipated.

After the quick fix of extending two of its brown bottle brands to green bottles, SAB turned to bringing in some of the vast array of brands SABMiller swept up while mushrooming into currently the world’s biggest brewery group – though it lose that title once Inbev’s takeover of Annheuser-Busch is finalised.

While Dreher is SAB’s newest brand in its home market, acquiring the Hungarian beer maker in 1993 marked the start of the domestic beer group’s global expansion.

Dreher was launched locally on Tuesday as the “new CEO of beers”.

“That’s an in-house joke because we are getting a new CEO today, Norman Adami,” Penhale said at the launch.

Adami, who headed SABMiller’s American operations, is returning to South Africa to replace Tony van Kralingen who is moving to the group’s London head office to direct the global group’s human resources division.

Though advertised as “the boss of beers”, Dreher is not being positioned SAB’s most expensive brand. That title belongs to Peroni Nastro Azzurro. Both beers are likely to retail for around the same price, Dreher is slightly cheaper in that its bottle contains 350ml versus Peroni’s 330ml.

One of the things that puts brown bottle beer drinkers off premium beer is that they not only cost nearly 40% more, green bottles are generally 10ml smaller – though this only applies to SAB’s range because Heineken and Amstel are the standard 340ml.

The tussle between the brewers has caused the green/brown bottle divide to become blurred. For instance, in contrast to SAB’s flagship Castle whose Lite offshoot is marketed as a premium green bottle beer, Nambrew puts standard Windhoek in green bottles and Windhoek Light in brown bottles, and charges the same R6 for both.

While Miller falls into the premium “green bottle” category, it comes in a clear bottle. Tuesday’s launch of Dreher coincided with SAB announcing a facelift to its Miller bottles.

To further confuse beer drinkers, premium and mainstream brands are also sold in cans and sometimes as draught beer in pubs.

Penhale said the draught market is very small in South Africa, accounting for one percent of total sales versus half in Eastern Europe.

Though small, draught beer is the niche selected by Diageo, another member of the Brandhouse alliance which is investing in a quarter of the new brewery so it will presumably make Guinness and Kilkenny in Gauteng.

The limited draught market means Dreher will only be offered in bottles, and SAB at this stage only plans to launch it in “single serve” bottles.

Quarts are one of the reasons regular beer drinkers tend to go for brown bottle brands, and the current consumer slump is more likely to see green bottle drinkers trading down than brown bottle drinkers trading up.

When the going gets tough, the tough get laagered, reinforcing SABMiller’s standing as a strong defensive stock during hard times.

The prospects for brown beer sales look better than ever. For green bottles, on the other hand, its seems unlikely that the market can support that many brands.

There are more than ten green bottles on the wall if brands if the peripheral players in this battle between SAB and Brandhouse are included.

A key problem is the wall on which all these green bottle brands are crowded is pretty small.

When Heineken’s divorce was announced last year, SABMiller warned shareholders the loss of Amstel might knock $80 million off the coming the year’s earnings before interest, tax and appreciation. This indicated Amstel had 9% of the South African beer market – and one can guess Castle and Black Label own pretty much the rest though SAB keeps the sales of its individual brands a tight secret.

Don’t mention the wall

By Robert Laing

There I was in Berlin on 9/11. The Germans write the date like we do, so it was 9 November, a date as significant in modern history as the September 11 Twin Tower attacks. It was the 18th anniversary of the fall of the wall.

Perhaps it was the icy wind and sleet that made me a solitary figure marking the occasion by walking the old dividing line. But the same dreadful weather didn’t stop the party back in 1989 when friends and relatives forcibly separated for 28 years at last got to embrace again. Now, I saw nobody celebrating.

Frequent stops at coffee shops to defrost got me reading nearly all of Berlin’s dailies. They reported a poll found three-quarters of former East Germans are disillusioned with freedom. A snap test of Berlin school children on Deutsch Democratic Republic (DDR) history found many believe the wall was built by the US. Neither the kids nor their teachers believed the death penalty had been a fixture of Soviet authoritarianism. Nearly all said they would prefer a guaranteed a job when they left school to living in a free society.

The first leader in Der Tagesspiegel said: "The late head of the DDR's state-broadcaster must be laughing in his grave at how his propaganda has been passed on to today’s children by their parents and teachers."

The newspaper polls agreed with my own research during the previous night’s pub crawl.

"Those of us who grew up in the DDR got the world’s best education. As you know, all important modern inventions came from the DDR. Take television, for instance. It was invented by DDR scientist Manfred Von Ardenne," a chap in a pub told me.

And to think all these years I’d been under the impression television was invented by the Apartheid government in 1976.

My beer buddy continued to tell me how the DDR issued him with a huge flat for next to nothing when he left school.

"Did everyone get that, or did you have to be a communist party member?" I asked.

Instead of answering, he asked: "How old are you? My guess is 49."

"I just turned 44," I answered drily.

"You see! I’m 46 and I look much younger than you. See what all the stress of growing up under capitalist competition has done to you."

I switched drinking companions to a woman who had sprung to my defence by saying I looked much younger than the other guy. We got on swimmingly until I mentioned the wall, a topic which instantly made her extremely angry.

An inkling of why the wall is such a bitter topic for many was provided by Bild, a paper derided in Germany like the Sun is in Britain, and an even more compelling read. Bild didn’t waste space on opinion polls, preferring to tell the story through one person.

The paper tracked down a young man it had featured 18 years ago who was then one of 170 toddlers whose mothers had rushed to the newly opened West, abandoning their babies to the tender mercies of state orphanages.

Bild reported this “wall orphan” refuses to talk about his mother and has moved to Bonn to get away from the painful memories of his birth place.

As in the New South Africa, the discovery that freedom don’t come for free has been bitter. Berlin has suffered from an exodus of disillusioned people who feel the outcome wasn’t worth the struggle. The city has reacted by encouraging new blood to move in. I heard many South African accents while walking through the now fashionable old East Berlin suburb of Prenzlauer Berg.

You get to see very few remnants of the wall walking its old line. It seems to me post-soviet Berlin has healed better than post-apartheid South Africa by not picking at its scars.

Dump the Top Star Drive-In?

By Robert Laing

Communist Alert! Johannesburg's Top Star drive-in has closed after 48-years and will literally vanish without a trace over the next three years. Remember, without eternal vigilance, it can happen here.

Joe Bob Briggs, the drive-in movie critic of Grapevine, Texas, concluded his reviews with a paragraph like that whenever a drive-in died to make room for a "six-screen indoor-bullstuff puke-plex".

The last flik I checked at the Top Star was Sweeney!, which imdb.com says came out in 1977. Considering I haven't been to the Top Star in nearly 30 years, I can't claim to be prone with grief. Sweeney! was a film spin-off of a BBC series the SABC dubbed into Blitspatrollie. My parents were huge fans and wanted to see what the actors sounded like in their original cockney. The reason this movie stuck in my mind is it was cited as a major influence by cop-turned-bank-robber André Stander. It never inspired me to do anything great.

I'm no drive-in guy. I've never gotten my parent's generation's fetish about wanting to do everything in a car. Statistically, nearly everyone my age was conceived in the back of a car, invariably at a drive-in.

As a kid, I couldn't understand why eating out meant the White Pigeon Roadhouse where fine dining was a waiter clipping a tray on the driver's door.

Going to the movies meant the drive-in. This involved a sordid business of hiding in the boot with a horde of other kids. This was partly to evade the age-restriction police, and also because it was before the days of charging a flat rate per car. Once word got around that a family was going to the drive-in, every brat in the neighbourhood invited themselves along. So to keep things affordable for pa, kids got sneaked passed the ticket office in the boot.

None of those 2-18 age restriction fliks made any ill effect on us six-year olds. Apartheid censors cut all the nudity out and we didn't watch the violence. We were too busy running around spying on other kids getting conceived in the backs of cars.

For those of you who mourn the Top Star, take consolation from its noble death. Some say drive-ins declined because they abandoned their specialty low-budget skop, skiet en donner for mainstream block-blusters. The Top Star's last picture show was Running Scared, which from its imdb.com description sounds like a cert for Joe Bob Briggs' four out four stars. The Motion Picture Association of America slapped an R-rating on it "for pervasive strong brutal violence and language, sexuality and drug content". This flik met all four of Joe Bob's criteria for an ace drive-in movie right there.

Furthermore, the Top Star did not die to make way for any multi-screen barfo-plex. Its new owner, JSE-listed DRDGold, expects to extract four tons of gold from the five million tons of yellow sand in its underlying mine dump. Clearing the mine dump will open valuable real-estate space in Selby. It is also likely to raise property prices in the Southern Suburbs which in the past were blighted by the fine dust from surrounding mine dumps. I'm sure Joe Bob would agree that far from being a "Communist Alert!", the Top Star's demise is a victory for capitalism.

I have just one word for anyone who insists on getting weepy-eyed over the Top Star: Velskoen. The Velskoen is now Johannesburg's sole surviving drive-in, probably giving this city one more drive-in than Grapevine, Texas now has.

Though columnist John Bloom still uses the pseudonym Joe Bob Briggs, he has long stopped writing in the persona of a redneck enthusing about R-rated zombie chainsaw-fu kak. The datelines of his recent columns are New York rather than Grapevine and are stock liberal politics. His earlier drive-in reviews are very funny and can be read on the web at www.joebobbriggs.com.

As someone who thinks the only good drive-in is one turned into a parking lot for a mall, preferably one with a Cinema Nouveau multiplex, I asked for comment from two people who might care — Joe Bob Briggs and Jeremy "Ag pleez deddy won't you take us to the drive-in" Taylor.

Joe Bob replied: "Oh my god. MAJOR communist alert! One drive-in left? In a county with fabulous weather? All South Africans should be ashamed of themselves! Don't make me come down there and straighten things out."

Jeremy Taylor seems to be doing the Chicago folk circuit at the moment, and his US agent Rich Ball sent me this: "Sorry to hear about the Drive-In. We don't have many of them left here either. Time was when fundamentalist preachers railed against them as dens of iniquity and passion pits. God has taken about half a century to answer their prayers. Well, God does move in mysterious ways..."

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