Ethiopia's private transformation
Since the Ethiopian Peoples Revolutionary Democratic Front (EPRDF) came to power in 1991, the privatization of state owned companies has slowly gained ground.
Enterprises up for sale are usually operating in the industrial sector. Profitable banking and telecom companies remain off-limits for investors.
According to the Ethiopian Private and Public Enterprises Supervising Agency (PPESA), 200 enterprises have so far been privatised. The latest batch of enterprises to be publicly sold include flour and ceramics factories next to the Halal and Bedere breweries.
Beer is quickly becoming one of Ethiopia’s favourite drinks, with consumption rates expected to increase by 15 per cent annually over the next five years. Luc van Kamenade reports from Addis Ababa on Africa’s newest nation of beer drinkers.
The English Premier League will soon be drawing to a close. A crowd of two hundred Manchester United and Chelsea supporters has gathered at the Beemnet bar in the Ethiopian capital, Addis Ababa. They chant and cheer and order beer… lots of beer.
Waiter, Kedir Leshade, weaves his way through narrow holes in the crowd. He carries up to ten mugs of beer, locally known as ‘jumbos’, which he dexterously delivers to hysterical groups of football fans, whilst collecting empty tankards and catching a glimpse of the game himself.
“It is a madhouse,” Kedir says, while waiting for the bartender to refill the empty mugs he just collected. “And not just on game nights, I run my ass off every weekend.”
Increased purchasing power
The Beemnet bar is one of those places in Addis Ababa which attracts Ethiopians of all ages. Increasingly locals are going here for breakfast, lunch, dinner and drinks - a sign of the country’s increasing purchasing power. On Friday and Saturday nights, the terrace and bar is packed with people drinking beer and trying out their new dance moves before heading to a club after midnight.
Beer is becoming increasingly popular among the growing Ethiopian middle class. In fact beer consumption in Ethiopia - Africa’s second-most populous country, is expected to grow by about 15 percent every year for the next five years. According to a report carried out last year by Access Capital, an Addis Ababa-based research group, this growth in consumption is very much in line with Ethiopian population levels and economic growth rates.
Horn of Africa
Dutch brewer Heineken has been quick to spot the country’s growth potential and is about to expand its business to the Horn of Africa. “Ethiopia is one of Africa’s most promising beer markets,” Tom de Man, president of Heineken’s Africa department, said after winning a bid last week to buy two state-owned breweries for 114 million euros.
The multinational is about to gain an 18 percent market share by taking over Harar Brewery S.C. in eastern Ethiopia, known for its popular Guinness-like dark beer Hakim Stout, and Bedele Brewery S.C. in the west of the country.
Heineken is not the only international brewer with its eye on the Ethiopian beer sector. In order to secure Bedele Brewery, the Dutch brewing giant had to outbid Danish brewery Carlsberg, French-owned BGI Ethiopia and the French wine producer Groupe Castel, among others.
Despite its rapid growth, the Ethiopian beer market is still in its infancy when compared to other African countries. In 2010, beer consumption rates in the country were approximately four litres per capita, a small proportion when compared to Nigeria (11 litres), South Africa (60 litres) and well below the global average of 27 litres.
Heineken is confident about Ethiopia’s catch-up effort. “The population of 85 million is growing and the middle class and the economy as well,” says John-Paul Schuirink, spokesman of Heineken. “Ethiopians have more money to spend.”
At the Beemnet bar the final whistle sounds: Manchester United defeats Chelsea 2-1 and takes an important step towards winning this year’s championship. A group of friends are group hugging and jumping up and down. “My brother,” yells one of them when Kedir passes. “We need five more jumbos.”