Phoenix Beverages Ltd a Naivas affiliate has received approval from the Competitions Authority to acquire a 28.15% stake in African Originals Ltd.
Phoenix Beverages which is based in Mauritius, does not operate in Kenya but has indirect control in Kenya through IBL, including affiliate Naivas Limited. While African Originals, incorporated in England and Wales, controls Savannah Brands in Kenya, producing various alcoholic and non-alcoholic beverages.
Savannah Brands Ltd manufactures and distributes the beverages under the Kenya Originals (KO) brand which includes fruit ciders, Gin, Iced Tea and Tonic. Savanah brands is a Naivas supplier and this move is effectively a vertical integration of its value chain.
The cider market in Kenya is dominated by EABL with their Tusker Cider with its market share standing at 79%, with KWAL’s Savanna Cider coming in second at 5%, Hunters also from KWAL is third at 5% market share while KO cider comes out at number 4 with 1.5% while the rest of the brands stand at 7.5%.
The transaction takes place at a time when the KO brand was taking a bashing from customers who claimed that they fell sick after consuming the cider. It will be worth watching what the brand does moving forward to rehabilitate its image.