Kegna Beverages officially inaugurated its new brewery on June 14 in Ginchi, Oromia Regional State, approximately 80 kilometers west of Ethiopia’s capital, Addis Ababa. The state-backed company has invested USD 250 million in establishing a 3 million hectoliter capacity brewery, producing a locally brewed lager named Kegna—meaning “our”—crafted from Ethiopian barley and immediately available on the market.
Founded in 2017 by roughly 5,000 shareholders, including farmers, Kegna Beverages is controlled by the Oromia regional government with support from the Development Bank of Ethiopia (DBE). The company aims to scale high-volume production to compete directly with established players like Heineken and BGI (Castel), positioning itself within Ethiopia’s increasingly competitive beer industry.
The brewery occupies a vast 100-hectare site in Ginchi, half of which is dedicated to production facilities, while the remainder hosts offices, warehouses, and guest accommodations. Although the location is currently remote, a government-pledged upgrade to the road network connecting Ginchi with Addis Ababa is expected to enhance logistics and distribution efficiency across regional and national markets.
Kegna represents more than a commercial venture; it embodies a social and economic development project. The Oromia regional government, reversing a previous trend of privatization of state-owned breweries, has re-entered the brewing sector to generate employment and stimulate economic growth. Once fully operational, the brewery will employ approximately 450 workers drawn largely from nearby communities and maintain strong ties with local barley farmers to ensure supply chain stability.
Despite its promising outlook, Kegna faced significant delays since its inception in 2017, initially due to the COVID-19 pandemic and subsequently hindered by a critical shortage of foreign currency. The project advanced only after the DBE injected an estimated USD 100 million, facilitating final agreements with German equipment supplier Krones.
Market entry challenges persist, particularly due to recent changes in Ethiopia’s excise tax policy. As of March 2025, malt-based beers are subject to a 40 percent excise tax or ETB 28 (USD 0.20) per liter, whichever is greater, while beers brewed exclusively with Ethiopian barley incur a slightly reduced rate of 35 percent or ETB 23 (USD 0.17) per liter. Given that beer prices in Ethiopia remain relatively low—typically under one dollar per bottle—these tax increases threaten profitability and competitive pricing.
Ethiopia’s beer market is densely populated with six companies operating 14 breweries and a combined capacity of about 18 million hectoliters. Competition remains fierce, as demonstrated by Diageo’s exit in 2022, which saw it sell its Meta Abo brewery to BGI at a reportedly nominal price after failing to meet targets despite a previous USD 225 million acquisition.
Optimistic forecasts predicting domestic beer production to reach 25 million hectoliters in 2023 have fallen short, impacted by rising taxes, regional levies, and ongoing security issues in some areas. Current estimates suggest production will reach only 11 million hectoliters this year, a modest increase from 10 million last year, although comprehensive market data remains limited.
With Ethiopia’s population now at 135 million—the second largest in Africa after Nigeria—and approximately one million people reaching legal drinking age annually, per capita beer consumption remains relatively low. This demographic dynamic presents Kegna with a substantial opportunity to capture market share in Ethiopia’s evolving beer landscape.
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