EABL forced to raise beer prices as drought takes toll

By Standard Reporter

Beer lovers will now pay more for East African Brewewries Ltd (EABL) brands.

The company has increased the prices of most of its main brands by between Sh5 and Sh10.

The new prices are recommended retail prices only, and retailers are free to charge higher if they wish.

Beers affected include Tusker Lager, White Cap Lager, Guinness FES, Castle Lager and Malta Guinness.

However, the prices of Tusker Malt Lager, Senator Lager, Allsops ,the non-alcoholic Alvaro and spirits distributed by EABL remain unchanged. Kenya’s largest beverage maker said it was forced to raise the prices to combat the higher costs of raw materials, water, fuel and electricity.

Poor yields

"We have written to our trade partners to explain the changes," said EABL Kenya Demand Managing Director, Baker Magunda in a statement.

He said barley, a key ingredients for manufacturing beer, has given poor yields from last year’s crops due to the ravaging drought, forcing EABL to import barley to fill the gap in local supply. This, said Magunda, pushed up production costs.

"For EABL to continue to make its quality products, it is regrettable that we have to increase our prices," said Magunda. Water shortage, also due to the drought has also put a strain on the business, EABL said, adding that it has had to drill more boreholes at great cost, to ensure a regular supply of fresh water for its brands.

EABL tried to link the price increases to global trends among beverage makers around the world, saying that increases in the price of oil, as well as barley and hops, the two main grains used to make beer and malt, has put them in a corner.

"Globally, barley prices have risen by double-digit percentages over the last year due to worldwide shortage of all grains. Hops have had an even more dramatic triple-digit percentage price increase over the last year and continue to be in short supply.

EABL is set to hold its Annual General Meeting on October 22 at Safari Park Hotel in Nairobi.