Namibia Breweries Limited (NBL) expects a decline in export volumes following the expiry of its supply agreement with HEINEKEN Beverages South Africa at the end of April 2026.
The agreement carried a minimum off-take commitment of 450,000 hectolitres per year, although actual volumes supplied in 2025 amounted to about 365,000 hectolitres.
Its expiry removes a guaranteed export channel that has supported a significant share of NBL’s regional volumes, leaving the company exposed to market-driven demand in South Africa.
Managing Director Waldemar von Lieres said the loss of the minimum supply arrangement will result in lower volumes.
“We foresee lower volumes in our supply to South Africa following the expiry of the minimum supply arrangement,” he said.
While the commercial relationship with HEINEKEN will continue, it will no longer include minimum volume commitments.
NBL said the change is expected to weigh on production volumes and margins as the company adjusts to a more competitive export environment.
Internal sensitivity analysis indicates that a reduction to 50% of the contractual minimum would have lowered earnings per share by 22 cents, or 7.2%, while a complete loss of volumes would have reduced earnings by 58 cents, or 18.9%.
Von Lieres said 2026 will be a transition year as the company completes internal reforms and adapts to changing market conditions.
“2026 will still be another year of change, with a focus on completing the Digital Backbone ERP implementation and advancing EverGreen 2030 priorities,” he said.
The brewer is also facing broader pressures, including potential increases in energy costs and higher tax charges following the end of manufacturing allowances.
“Namibia could be faced with a global energy crisis and increased prices throughout the supply chain. In addition, we expect an increased tax charge following the cessation of manufacturing allowances,” he said.
The expiry of the South African agreement follows the end of NBL’s Fruitree distribution deal with PepsiCo in February 2025 after more than 15 years.
In response, the company has moved to reduce reliance on external agreements through portfolio diversification, including the localisation of cider and wine production and the expansion of redistribution channels.
NBL said future growth will be driven by market share gains, portfolio mix and brand strength rather than guaranteed export volumes.
“Growth will be driven by market share, portfolio mix and brand strength, supported by execution in the market and a continued focus on efficiency and productivity,” von Lieres said.