A Less Wining Nation



A new drink is highlighting the undersupply of locally produced wine in the country. 'Ande be Ande' is a mixture of wine, beer and Sprite, or some other soft drink, and is increasingly popular throughout the bars of Addis Abeba. Just four establishments are currently working in the sector in Ethiopia, and issues such as old machinery and unreliable energy supply are causing the production to fall far short of its potential, reports FASIKA TADESSE, FORTUNE STAFF WRITER.


Most food and drink on Ethiopian tables ends up becoming mixed into one. Coffee with tea or coffee and tea with milk and Coca Cola or Pepsi with mineral water or even wine are common. Increasingly popular for alcoholic beverages drinkers is the mixture known in Amharic as “ande be ande” (one to one), where you mix a bottle of wine with a bottle of beer and a bottle of Sprite in a large jug.

On  Thursday afternoon, June 19, 2014, that was what two Isuzu truck drivers, Yared Yalew and Samson Belachew, were drinking as they enjoyed raw beef at Mamushe Kunspagna – a popular beef eatery at Riche, along Gotera road (Sierra Leone Street) in Kirkos District.

“We come here two or three times a week to eat meat with ande be ande,” said Yared.

This drink is now popular at most places in Addis Abeba and it seems the only alternative ingredient one has at hand is switching between bottled beer and draught beer, and between Sprite, 7Up and one of the cola drinks. The Awash Wine (Vino) is a must have ingredient.

“The demand for locally produced wines is high, but the company cannot provide us with the amount we request,” said Temesgen Dalecho, head waiter at Arada Bar located in Arada District, off Arebegnoche Street.

The company in question is the Awash Winery, which had been the only local producer for decades until a short while ago.

Awash’s delivery vans make a weekly stop at Arada Bar, and the most they give them is five crates each of Saris and Guder.

“They sometimes give us two or three crates saying they do not have enough,” Temesgen said.

Local demand is complemented by imports from South Africa, Italy and France.

Awash Winery became a single entity when the derg nationalised two factories at Mekanisa and Lideta, both established by Italians, and a third factory at Addis Ketema, which was owned by Altaliva, a Greek company. The company now has a 500ha farm in Merti Jirsu, which was previously owned by the Upper Awash Agro Industry, and a 42ha plot in Zeway, about 163Kms south of Addis Abeba. The land where the Addis Ketema factory was located has been given to MOHA Soft Drinks, with the machinery moved to the wine factory at Mekanisa.

Awash Winery was restructured as a share company by the Privatisation & Public Enterprises Supervising Agency (PPESA) in 1984. Awash is now in private hands, bought for 459.9 million Br by Blue Nile Investment PLC – a company established by Mulugeta Tesfakiros, owner of Muller Real Estate, and 8 Mile, an equity-firm chaired by Bob Geldof.

The company, which has 555 employees, currently produces four core brands – Axumit, Camilla, Saris (Awash) and Guder. Guder and Saris, both red, take  four months and Axumit and Camilla, white wines, take seven months from the harvest stage to market, according to Abraham De Klerk, head vintner at the company.

Awash Winery has now planted on 133ha of its largely fallow 542ha farms, with two harvests in November and May yielding a total of 3,300tn of grapes a year. It is also planting on an additional 36ha plot.

Awash Winery has a total production capacity of seven million litres and it is actually producing 6.5 million litres annually. Castel Winery says it will produce 825,000lt a year by cultivating a 160ha  farm in Zeway, 163km south-west of the capital in the Oromia Regional State. Its capacity is two million litres a year.

Ethiopia imported 10,637 hectolitres of wine in 2011/12, worth 27.8 million dollars, according to the Ethiopian Customs & Revenue Authority (ERCA). The volume of imported wine showed a 10.5pc and 12pc increment, respectively, compared with 2007/8 and 2009/10 fiscal year. However, the demand for wine in Ethiopia is projected to be 84,391 hectolitres by 2017.

Castel Winery Plc, sister company of BGI Ethiopia, entered into the wine market in 2011 with seven brands: Acacia Dry Red, Acacia Medium Sweet Red, Acacia Medium Sweet White, Rift Valley Merlot, Rift Valley Syrah, Rift Valley Cabernet Sauvignon and  Rift Valley Chardonnay.

Awash Winery is available in the market with a price of 50-70 Br for Guder and Saris and 80-100 Br for Camilla and Axumit, depending on where they are sold. Castel wines are offered to the market with a price of 130-145 Br for Acacia brands (Medium Sweet Red, Medium Sweet White, Dry Red) and 150-165 Br for the Rift Valley brands (Cabernet Sauvignon, Merlot, Syrah and Chardonnay). Both factories mainly produce 750ml bottles.

Awash halted exports after becoming private because of quality issues and the low volume of production, according to Abraham.

“We started to focus on satisfying local demand, whilst at the same time working to improve quality,” he said.

“Most of our customers ask for imported wines relating the quality issue, rather than locally produced, so we mostly serve South African wines,” said Tsegaye Menberu, general manger of Mismak Bar, which is located on Sierra Leone Street. “Even then, the little amount of Awash Wine we buy is not directly from the company but from retailers because of the company’s insufficient supply.”

During Fortune’s visit to Awash Winery’s plant on Wednesday, June 18, 2014, the bottling process at Mekanisa was cut off because of a mechanical breakdown. This was caused by the age of the machinery and continuous power blackouts in the area, according to Eyob Assamnew, production head of the Mekanisa branch of the company.

Alemu Geda, 61, worked at the company for 34 years – more than half of his and the factory’s life. The factory sent him to Italy in 1981 for a graduate degree in winery. He worked as production head until retirement early this year, and continues as a consultant with the company.

“The company is transforming in quality, even if old machinery is a challenge for the effective production process,” he says.

Raw material shortage is another reason why the factory fails to meet demand, says Eyob, a Chemistry graduate, who has been working with the company since he graduated seven years ago.

“The main challenge we are facing in the market is price sensitivity of the people,” said Amity Weiss, marketing manager of Awash. “They seek high quality with lower price and this is the major challenge for the marketing department.”

Workers like Alemu and Eyob witness that the quality of the wine is improving under the new administration, but admits the stagnant supply to the market has not been addressed because of the old machinery used by the company.

The lengthy process in accessing foreign currency and having a Letter of Credit (L.C) issued are reasons affecting production for co-owner Mulugeta Tesfakiros. This causes a delay in the delivery of imported bottles, corks and chemicals for production.

Currently, the factories at Lideta and Mekanisa are manufacturing 28,000 bottles and 15,000 bottles, respectively, on a daily basis. The company’s target is to reach 21 million litres of annual production within five years. By September 2014, the company will add an additional one million litres to its annual 6.5 million litre production.

But still Ethiopia ranked last in the world in per capita consumption of wine, at 0.09lt per individual. Neighbouring country Kenya consumes 0.14lt, Senegal 0.5lt and Ghana’s consumption stands at 0.9lt.

 



By FASIKA TADESSE
FORTUNE STAFF WRITER.

Published on June 22, 2014 [ Vol 15 ,No 738]


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