Food & beverages does not exist as a single sector on the JSE, but for the purposes of this report we have combined them.
The beverage sector is dominated by SABMiller and the food producers sector consists of one large company - Tiger Brands - and a handful of medium-sized food companies such as Afgri, Astral, Illovo, Rainbow Chicken and Tongaat.
Neither sector has a charter yet. But this hasn't prevented companies in the combined sector from moving ahead on the BEE front.
Oceana has a clear lead over its rivals and Distell, SAB and Tiger Brands are close together. Beyond them the picture is diffuse. Though few other firms in this sector have entered into equity transactions at holding-company level, most have made significant progress in other areas.
Distell moved up one in the rankings to number two, displacing SABMiller. It entered into a BEE transaction in September 2005, in terms of which a BEE consortium comprising Wiphold, Distell employees and the CSI Trust acquired a 15% stake in Distell's operating subsidiary SA Distilleries & Wines (SA) Ltd (SADW). An employee share ownership scheme holds 45% of the SADW equity, Wiphold has 40% and the CSI Trust, representing disadvantaged communities in areas in which Distell operates, holds 15%.
On broad-based empowerment, SABMiller stands out with the most long-standing programmes. Its local operation, SAB Ltd, is measured by Empowerdex for BEE purposes, as SABMiller is London-domiciled. SAB falls down on equity ownership even though it has spun off many companies into the BEE fold over the years, among them ABI, Lion Match and Tsogo Sun. Tsogo Sun is an enduring example of how to establish a truly empowered company at all levels without any handouts.
But it is SABMiller, not SAB, that has a 49% stake in Tsogo Sun. SABMiller also has a 30% stake in Distell.
SAB's management score is relatively low - odd, since 25% of its executive directors are black and its senior management is heavily black. SAB realised years ago black senior management is an essential, as black drinkers account for about 90% of beer consumption in SA.
SAB's enterprise development score is the maximum attainable, as are Oceana's and Distell's. SAB has been at the forefront of enterprise development longer than any SA company, notably with its owner-driver scheme, which dates back to the 1980s. More recent initiatives are Kickstart and the Taung Barley Farmers' scheme.
Preferential procurement for both Distell and SAB is relatively low, especially in comparison with Oceana. Both companies are highly capital-intensive and much of their production equipment is imported. Where possible, they try to source from previously disadvantaged firms.
Tiger Brands, noteworthy for its corporate social development and skills development, has an important and logical commitment to three initiatives in particular: the African Children's Feeding Scheme, Heartbeat and Operation Hunger.
It's also the largest single shareholder in Oceana, with a 38,5% stake.
