South African Breweries

South African Breweries was founded in 1895 by Jacob Letterstedt specifically to serve a new market of miners and prospectors in and around Johannesburg. Two years later, it became the first industrial company to list on the Johannesburg Stock Exchange (JSE). It has been a dominant player on the exchange ever since.

Related Topics:
1895 - Jacob Letterstedt - Johannesburg

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In 1955, the government introduced a heavy tax on beer products causing many consumers to switch to spirits. However, the subsequent shock to the South African beer industry proved to be a blessing in disguise for SAB. A year after the introduction of the policy, the company purchased its two main competitors, both of whom were struggling under the depressed demand for beer. After the acquisitions the new and larger SAB was able to rationalize operations, thereby reducing costs and increasing profitability. By 1998, SAB commanded a 98 per cent share of the South African beer market and was considered one of the lowest cost producers of beer in the world.

Related Topics:
1955 - Tax - Beer

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The company?s earliest international venture was in 1910 when it founded Rhodesian Breweries in Zimbabwe. This subsidiary spearheaded SAB?s initial international expansion efforts, having established new breweries in Zambia and Bulawayo in the early 1950s. Further international expansion came in the 1970?s and 1980?s with the establishment of breweries in Botswana, Angola, and the buying of Compañía Cervezera de Canarias of the Canary Islands. Nevertheless, prior to 1990, SAB remained primarily focused on domestic opportunities.

Related Topics:
Zimbabwe - Zambia - Bulawayo - Canary Islands

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From 1990 to 1998, group turnover had increased by a compound rate of 17 per cent per year, and earnings had grown by 18 per cent per year. With brewing operations in 19 countries and a total annual capacity of nearly 43 million hectoliters, SAB was the fourth largest brewing group in the world. It was also the third largest conglomerate in South Africa, behind De Beers and Anglo American.

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As its name implies, the company was based in South Africa and focused chiefly on African and East European markets. In 1999, it moved its headquarters to London in an effort to enter the international market. Its biggest brands at the time included Pilsner Urquell, Castle Lager and Ursus, which are all still being produced. In 2002 it acquired Miller Brewing and created SABMiller from the merger.

Related Topics:
South Africa - Africa - East Europe - 1999 - London - Pilsner Urquell - Castle Lager - Ursus - 2002 - Miller Brewing - SABMiller

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