On 28 July 2015, the shareholders of brandhouse Beverages (Pty) Limited announced the dissolution of their Joint Venture in South Africa, to pursue growth opportunities in spirits, ready to drink, cider and beer, separately. As part of the transaction, brandhouse will become a wholly-owned subsidiary of Diageo plc and continue to operate as brandhouse in the immediate future.
Brandhouse is a (50% - 50%) JV between Diageo and DHN that was first established in 2004. DHN is owned by Diageo (42.25%), Heineken International (42.25%) and Ohlthaver and List Group of Companies, the majority shareholder of Namibian Breweries Limited (15.5%).
- To dissolve the JV, Diageo will release its 42.25% stake in Diageo Heineken Limited (DHN) to Heineken;
- Diageo will sell its 15.01% stake in Namibia Breweries to Heineken; and
- Diageo will also sell its 25% stake in Sedibeng Brewery to Namibia Breweries.
"The end of the brandhouse JV marks the beginning of exciting new opportunities for the three companies", said Jeff Milliken, brandhouse Managing Director. "For Diageo, this announcement is an exciting breakthrough on our journey to deliver our Performance Ambition in South Africa. Operating alone will enable Diageo to focus its resources behind expanding its leadership in spirits and to further innovate and grow its other portfolio into the future. For Heineken and Namibian Breweries, this announcement opens up a new world that allows the two companies to focus solely on the beer category and strengthens their platform for continued growth. This will also enable the companies to extend their portfolio by introducing new beer brands into the South African market", Milliken said.
Since inception in 2004, brandhouse has become a strong partnership for the three companies to share resources and create a step change for the combined brand portfolio in the premium alcohol segment in South Africa. During the last 11 years, the JV has changed the face of the South African drinks sector, introducing increased competition, greater customer choice and making significant investment in people and infrastructure. In spirits market share has grown from 27% to 40%, making brandhouse the market leader in South Africa, and in beer, market share has grown from 2% to 10%.
With our existing infrastructure, brand strength and national coverage in place, it’s time to move to the next stage of growth, where each of the JV partners can pursue their own commercial agendas independently - Diageo in spirits and RTDs and Heineken and NBL in beer, Milliken concluded.