Sechaba Brewery Limited, said access to land still remains a major challenge to comply with traditional beer regulations that were implemented in 2012 to discourage the sale of opaque drinks in the household.
The holding company for Kgalagadi Breweries Limited and Botswana Breweries Limited said in its 2014 annual report that the regulatory environment continued to present very real challenges including the Alcohol Levy, which was increased to 50 percent in December 2013, forcing KBL to raise prices of all alcoholic products.
On the other hand, the Traditional Beer Regulations (TBR) which were implemented on 1 July 2012 necessitated a major revision of the opaque beer business model, as some 86 percent of the traditional retail space was lost.
“The main challenge in complying with the TBR continues to be unavailability of suitable land,” Group Managing Director Johan de Kok said in the annual report.
“This has hindered the smooth rollout of the outlet development programme. Although there has been some recent improvement in this regard, there are still a number of misinterpretations by local authorities of the provisions of the Liquor Act and the TBR regarding applications for both change of land use and licences,” he added.
KBL pledged a P10 million bailout package to BBL, its traditional beer arm, to help displaced retailers put up structures.
The funds were to help the retailers re-establish themselves in new locations at the time of the announcement of the facility, the then MD, Hloni Matsela admitted it would face challenges as many Batswana do not have commercial land to set up businesses.
“KBL is actively working towards building strong working relations with these authorities with the hope that combined efforts from all parties will mitigate future misunderstandings,” added Johan de Kok. Management has continued to actively work towards significantly improving relations with Government at all levels through proactive stakeholder engagement. The engagements with local government authorities, by way of addressing full council meetings, have proved to be very constructive platforms as they bring together political and civic authorities in their respective areas; including the bye-law and legislative authorities.
According to the MD, KBL continued its involvement in the Botswana Alcohol Industry Association (BAIA), which made strides towards engaging with Government on issues of policy formulation and strategies to curb alcohol related harm. The association gained support from Vice President, for the BAIA Adolescent Programme in Tswapong. This programme has also assembled a group of volunteer teachers for the “Training the Teachers” program.
“BAIA remains an important body in shaping government and public perception of the alcohol industry as a whole. It therefore remains an organ that may be effectively harnessed for collective lobbying of government on policy matters.”
Equally, the MD said his company has taken proactive steps towards assisting Beer gardens meet regulation requirements and assist in license renewal by engaging with local authorities on their behalf. He said KBL welcomes the efforts of local law enforcement agencies in policing the depots and traders that do not meet the licensing criteria.
“The onus is on us to make sure that these incidents are not repeated and that 100% compliance is achieved by all our outlets. Illegal home brews continue to compete directly with opaque products, in many cases now the only beverages available to former Chibuku consumers, many of whom find themselves out of reach of formal channel outlets.”
Johan de Kok said he expects the trading environment for alcohol related products to remain challenging in the future, but he said this does not make the task of producing world class beverages for local consumers impossible.
“We are adamant that the only way forward is to work hand in hand with Government in ensuring that the beverages produced by KBL have positive, lasting effects on consumers and society as a whole.”
Sechaba Brewery Holdings Limited is an investment company with interests in KBL and BBL and it holds 60 percent of the shares of this company, an affiliate of SABMiller plc, who through SABMiller B.V. holds a 40 percent share. KBL (Pty) Ltd is the sole brewer for its respective product categories in Botswana.
KBL has one clear beer brewery, a sparkling soft drinks plant and six sales and distribution depots. It also has three traditional beer breweries and five distribution depots strategically located in the east, north and south of the country.
