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East African Breweries H1 pretax profit down 8 pct

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poundfoolish		#11 Posted : Wednesday, February 17, 2010 5:55:56 AM
Rank: Elder Joined: 12/2/2009 Posts: 2,458 Location: Nairobi		with the two arguments @sparky and @tupac.. then i think Safaricom and the rest will be recording good profits.. Rem MJ saying the Ruaraka was their competition..cos guys had to make an opportunity cost choice, between yapping and imbibing with that ka 100bob in their pocket(does he buy credit or does he buy another beer??).. i guess Airtime wins that war
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the sage		#12 Posted : Wednesday, February 17, 2010 5:56:42 AM
Rank: Member Joined: 11/20/2008 Posts: 367		Another aspect to the story is the vindication of the Laffer Curve. Due to pornongraphic taxes on spirits the government had to back peddle as the taxes were milking th cash cow dry. I love economics.
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cmk		#13 Posted : Wednesday, February 17, 2010 6:16:32 AM
Rank: Member Joined: 1/24/2008 Posts: 479		the major reason is declining purchasing power,moreso since one has to balance between buying food and other luxuries..it is also right to say eabl is now feeling the effects of keroche and other cheap beers and proscribed drinks...but this is not to say that keroche is doing any better..summit sells at the production cost..so no profits at all just a marketing gimmick. Every man is guilty of all the good he didn't do- Voltaire
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gathinga		#14 Posted : Wednesday, February 17, 2010 6:28:15 AM
Rank: Veteran Joined: 11/30/2006 Posts: 635		cmk wrote: summit sells at the production cost..so no profits at all just a marketing gimmick. Tehehe. Whats the point of sustaining this gimmick, or will it pay in the long run?
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Chaka		#15 Posted : Wednesday, February 17, 2010 7:10:01 AM
Rank: Elder Joined: 2/16/2007 Posts: 2,114		Did Adetu say how alvaro is faring?
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VituVingiSana		#16 Posted : Wednesday, February 17, 2010 7:33:29 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		sparkly wrote: EABL can rediscover 2x growth if they introduce cheaper but trendy products for this class. Problem remains taxes... 65% of supermarket price goes to taxes... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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VituVingiSana		#17 Posted : Wednesday, February 17, 2010 7:37:05 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		EABL (unlike safaricom) has a HUGE competitor in UNTAXED substitutes aka changaa, busaa, muratina... You can't 'make' airtime credit... LOL... you can move to YU or Zain but all pay taxes... So the majority of the population esp in the rural areas have options... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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cmk		#18 Posted : Wednesday, February 17, 2010 7:44:19 AM
Rank: Member Joined: 1/24/2008 Posts: 479		@gathinga,i think if keroche persists,profits will definately start trickling in once they raise the price of summit in the near future..for now they have to try and convert as many drinkers as possible.. Every man is guilty of all the good he didn't do- Voltaire
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2012		#19 Posted : Wednesday, February 17, 2010 7:47:23 AM
Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi		VituVingiSana wrote: EABL (unlike safaricom) has a HUGE competitor in UNTAXED substitutes aka changaa, busaa, muratina... These brews have existed for as long as I can remember others longer than eabl. This can't be termed as competition but unconquered market. eabl needs to be innovative enough to get in there tax or no tax. BBI will solve it :)
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VituVingiSana		#20 Posted : Wednesday, February 17, 2010 7:53:17 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		2012 wrote: VituVingiSana wrote: EABL (unlike safaricom) has a HUGE competitor in UNTAXED substitutes aka changaa, busaa, muratina... These brews have existed for as long as I can remember others longer than eabl. This can't be termed as competition but unconquered market. eabl needs to be innovative enough to get in there tax or no tax. @2012 65% tax vs innovation? The loser is Innovation coz it can't beat 65% tax... Only option EABL has is asking the government to enforce the 'law' against untaxed brews... Even if EABL made a beer for 10/- the taxes would add a MINIMUM of 40/- = 50/- An inefficient but untaxed busaa sellers can compete coz even if costs 20/- (2x EABL's cost)... after taxes = 20/- I bet you that keroche sells part of its production on the untaxed market... EABL, being a listed firm, cannot do so as easily... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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