Photograph by: Sydney Seshibedi

Budweiser is sold here as a premium beer only because it is more expensive

Nielsen figures show that Castle Lite has just over 30% of the premium beer market in South Africa, with Amstel holding 28.5%.

Premium beer accounts for about 20% of South Africa's beer market. According to Nielsen, the value of the market for the past 12 months ending November 2009, was R4.9-billion.

Premium beer is a hotly contested arena not only because much of the growth in beer resides in this segment, but because of the fierce competition between South Africa's two major players.

Brandhouse Beverages, a three-way joint venture owned by Diageo, Heineken and Namibia Breweries, is the biggest seller of premium beer, with 56% of the segment through Amstel, Heineken and Windhoek and 11.1% of the total beer market at the end of November, according to Nielsen.

Castle Lite, Miller Genuine Draft and Peroni are SAB's top three premium-selling beers.

The competition between the two companies stems largely from a parting of ways, after SAB had been custodian of several of its rivals' brands for decades. Growth of the category was driven almost exclusively by the Heineken and Amstel brands, which were managed by SAB until Heineken left SAB in 2003 and Amstel was withdrawn in 2007.

Since they were pulled, SAB has introduced several new premium beers, including international brands acquired as part of its global expansion, such as Pilsner Urquell, Peroni and Miller Genuine Draft. It also developed new entries Dreher and Hansa Marzen Gold.

Absa Investments analyst Chris Gilmour doubts that Castle Lite constitutes a premium beer.

"It's a derivative of Castle, the most mainstream of mainstream beers in South Africa. It's premium . because of its pricing".

But different rules apply to different markets. Budweiser is sold here as a premium beer because it's more expensive - elsewhere in the world it is regarded as a mainstream beer.