Dilemma as Bralima boosts eastern Conge

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BEER BONANZA: REBELS LEVYING TAX' OF $1M A YEAR
Dilemma as Bralima boosts eastern Conge
A JOINT REPORT
It's a June night in Kinshasa,
and rapper JB Mpiana's
even in places where a differ­
ing international peace­build­
flag. Bralima — as the company
ent rebel group takes over the
radio station practically each
month. "There are many ad­
vantages to being with Brali­
ma," JB said. "They have reach
ing community — including
NGOs, the United Nations, de­
velopment consortiums, think
was now called, for Brasseries,
weekly VIP bash is just start­
ing to heat up. A minute before
midnight, JB runs onstage
among a huge posse of gyrat­
ing dancers in sunglasses. He all over the country."
Of course, in the DRC, "all
rips into some of his biggest
over the country' includes
hits.
Most songs deal with the some of the most dangerous
usual material, girls and gang­ places on Earth. The author­
bangers, in the Democratic Re­ ity of the national government
public of the Congo's Lingala in Kinshasa does not extend to
language. But when JB starts all of eastern Congo, which is
to chant the lyrics of his big­ largely run by a rogues' gallery
gest hit of the night, the real of rebel groups, including the
purpose of this party — fes­ notorious M23, whose list of
tooned with yellow­and­blue alleged crimes against human­
banners advertising Primus, ity includes looting, murder,
the beer that everyone would and rape.
Congo's civil wars have been
be drinking anyway, even at
this lush downtown wine bar fuelled by everything from
— becomes obvious,
"I love my Priiimus!" JB
blood diamonds to conflict col­
tan extracted from the coun­
yells. The crowd yells back: "I try's abundant mines, which
makes operating any sort of
love my beer!"
After the show, we asked JB
business in the east a mor­
ally dubious proposition. But
that has not stopped Heineken
with Bralima, the Heineken
subsidiary that brews and and many other foreign firms,
about his lucrative contract
distributes Primus. In return
which see themselves as the
country's best hope for post­
for writing numerous odes to
war reconstruction.
Primus and featuring its trade­
Corporations from the East
mark yellow­and­blue trucks in
India Company to United Fruit
his videos, JB gets invaluable
did shady business in conflict
national exposure — and some
zones for decades, inviting the
$300,000 a year.
wrath of diplomats and inter­
The dream contract for any
celebrity in the DRC is with national watchdogs who ac­
Bralima — better than any cused them of war­profiteering.
tanks, and some developed­
world governments — started
taking a different tack.
ping 550 million litres of beer
in 1974.
Monumental challenges
These days, an emphasis
The current government,
on economic opening and
under President Joseph Ka­
corporate social responsibil­
world's most powerful organi­
bila, has faced monumental
challenges, from entrenched
corruption and nonexistent in­
sations are actively encourag­
ing corporations into conflict
both within and around the
markets, hoping this will lead
to peace. Sometimes, though,
when Brahma's yellow­and­
country. Bigger than the US
Midwest, the DRC holds some
70 million people. But, by some
blue trucks hit those dusty
Congo roads, the results can
be messy.
In 1923, a group of European
estimates, nearly 10 per cent of
its population has died as a re­
ity means that many of the
investors founded one of Afri­
frastructure to raging conflict
sult of a series of fratricidal civ­
il wars that began in 1996.
ca's first breweries, naming it
Brasserie de Leopoldville after
Belgian Congo's colonial­era
capital. Primus, its inaugural
Last year's mutiny by the
M23 rebel group in the eastern
city of Goma, as well as the on­
going violence since then, has
displaced thousands and killed
brew, did not fare particularly
hundreds. Rebel offshoots are
well, with drinkers preferring
now stockpiling weapons for
a potential showdown with
the world's largest UN peace­
keepiug force, which has been
in the country since 1999 but
has just been given an unprec­
better­tasting and cheaper
Dutch and German beers until
the 1950s, when the company
— in which the Netherlands­
based Heineken purchased a
minority stake in the 1930s —
began expanding production.
Over time, Primus became
Bralima's marquee beer and a
source of national pride.
Following Congo's independ­
edented mandate to take offen­
sive action against the rebels.
Heineken, which bought out
Bralima in 1982, has main­
tained its investment in the
DRC throughout the turmoil,
ence from Belgium in 1960,
Kinshasa­based record compa­ By the end of the 20th century,
Primus played a central role
ny, it can guarantee its stars se­ however, the rapidly grow­
in the new country, even bas­
cure, stable careers and fame,
Limonaderies et Malteries
Africaines — brewed a whop­
ing its logo on the national
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anticipating major shifts in
the global spirits trade, as gi­
ant conglomerates like Bel­
gium's Anheuser­Busch InBev
and London's SABMiller have
moved away from reliance on
stagnant European and Ameri­
can markets to snap up foreign
brands.
Heineken doesn't report
with Primus­branded tables,
chairs, and ashtrays. Hand­
painted signs for Primus seem
to paper every surface in the
DRC, many with the slogan
"Toujours Leader!" ("Always
the Leader,'*)
probably much more, accord­
ing to a 2008 report by the UN
Group of Experts on the DRC.
The checkpoints are the pri­
mary revenue source for armed
groups in the area and bring in
more than enough to fund an
Given the volatility of the insurgency in a country where
country's politics, remaining the average wage is about a dol­
the leader in Congo can call lar a day and used AK­47s can
go for as little as $50, And with
profits by country, but Africa
for some tricky manoeuvres.
and the Middle East accounted
But you wouldn't immediately automatic weapons as preva­
for $873 million in profits and
14.4 per cent of the compa­
ny's revenue in 2012. Frontier
know that from visiting Brali­
ma's Kinshasa plant, where tall
Dutch managers in crisply col­
lared shirts oversee operations
beers like Bralima are emerg­
ing­country lottery tickets,
chances to buy into a market
before the country booms and
drinkers develop new, more ex­
otic brand loyalties. Since tak­
ing over Bralima, Heineken has
acquired major stakes in other
national classics like Egypt's
Stella, India's Kingfisher, and
Mexico's Sol.
Under guidance from Am­
sterdam, Brahma's market
share in the DRC has rocketed
from 30 per cent in 1987 to 60
per cent today — with Primus
as the flagship brand. Bralima's
main plant in Kinshasa, one of
its six in the country, churns
out up to a quarter­million of
the football­sized brown, dim­
pled bottles every day, along­
side Heineken, Coca­Cola,
Sprite, and Fanta — Bralima
is also the country's biggest
soda distributor. In addition
to its contracts with celebri­
ties, the brewery has exclusive
deals with many bars in Kin­
shasa, which are festooned
from the bird's­eye­view walk­
ways and negotiate employee
lent as they are, almost anyone
can be a checkpoint "rebel" in
the eastern DRC, including
less­than­scrupulous police
and armed forces trying to sup­
plement their anaemic wages.
M23 is one of the major play­
contracts at the plant's on­site
ers in the blockade racket.
watering hole.
Sylvain Malanda, Bralima's Formed by those unsatisfied
Congolese communications
per ca;
manager, seemed surprised
consult
when asked about corruption
in the DRC: "We can do some
rural A
appro*
favours and give gifts [to] poli­
of Bra!
ticians if they get in trouble or
transp
ask us. But no corruption." Mr
must p
Malanda says the help is mu­
each y
tual: "The government is help­
our lov
ing us a lot. Congo is open for
business!"
these t
enougr
In the east, however, with its
per jol
virtually nonexistent govern­
blocka.
ment presence and horrific ally
bad transportation infrastruc­ few tr;
not on­
ture, it is the rebels who deter­
mine what stays open. Anyone road a
driving through eastern Con­ Bra!im
go quickly becomes familiar
paying
with the experience of getting year tc
stopped at checkpoints and be­ with a
ing asked to pay fees. A single had on
checkpoint can bring in more the Rw­
than $700,000 per year and the Cor
­¦»* •
Ipsos Synovate Kenya ­ Acorn House,97 James Gichuru Road ­ Lavington ­ Nairobi ­ Kenya
which
up to
greate;
North
Sancti
The
tioned
cusing
and lo
eastern
to inti.
Longt:
rebel g
curren
Crimir
war ci
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> GDP but helps fund rebels' activities
2009 peace deal that
ly nominally integrated
inda­backed Tebels into
igolese army, the group,
is estimated to have
6,000 members, wants
.• autonomy in parts of
Kivu province.
OtIS
United Nations sanc­
M23 late last year, ac­
. it of murdering, raping,
oting across swathes of
a Congo in an attempt
mid ate its way to power,
ime Rwandan­Congolese
;eneral Bosco Ntaganda,
tly at the International
lal Court on charges of
imes, rape, and use of
child soldiers, is one of the
founders.
Eastern Congo's levy bosses
arent exactly hiding from in­
ternational retribution. In a
surprisingly easy­to­arrange
conversation, we spoke by mo­
bile phone in July with a taci­
turn Rwandan calling himself
Mr Damien, "tax collector" for
M23. Mr Damien said that he
splits his time between M23's
three primary checkpoints,
overseeing operations at the
Bunagana, Kibati, and Ki­
wanja stations. Mr Damien
explained that he charges $38
for a van to pass, $300 for a
medium­sized goods truck,
and $700 for a fuel tanker,
handing out official­looking
receipts for payment. The three
main checkpoints bring in most
of the group's funding, enough
money to purchase weapons,
pay salaries and bribes, and
even occasionally dole out social
aid to eastern Congo's poor.
Everyone gets stopped, even
the Bralima trucks painted like
big yellow­and­blue DRC flags.
Mr Damien explained that M23
takes $500 each from the trucks
hauling crates of Primus into
rebel­controlled areas: "NGOs
pay. People carrying charcoal
pay. Women going to the mar­
ket pay. Everyone pays! We don't
do preferential treatment. So,
of course, those who transport
beer also pay." Drivers leaving
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for rebel areas are given extra
cash to cover the payments, a
security officer at one of Brali­
ma's main distribution depots
Congo told us.
the time the brown glass
tia­ or cartel­controlled zones to
keep space between themselves
and the road. Heineken has de­
nied that it uses local distribu­
tors to immunise the company,
pointing out that it operated
this way for decades before the
reach their remote vil­
rebels occupied the area. But the
prices can rise structure has certainly allowed
the $1 they cost in
thousands of Congolese took to
the streets to riot throughout
the city. As locals say: "You can
bomb a hospital, but not Brali­
ma!") Beer trafficking would po­
tentially provide an even more
lucrative source of income for
rebel groups than the blockades
do today.
We took Mr Damien's
and multiplied them
Bralima to keep running in the
The international commu­
east as warlords have come and
Bralima had breweries in cit­
Bralima runs through
eastern Congo's rebel­held re­
nity has placed some checks on
companies that do business, ei­
ther directly or indirectly, with
ies under control of the rebel
the rebels. US Executive Order
group RCD­Goma during its
gions.
Extrapolating from Brali­
occupation of eastern Congo be­
tween 1998 and 2003, explained
13413, a 2006 directive, penal­
ises any American corporation
or its subsidiary found "to have
materially assisted, sponsored,
thousands of trips per
gone.
ma's DRC market share and per Jason Stearns, who in 2008
capita rates of beer consump­ headed the UN Expert Group
tion elsewhere in rural Africa, on Congo, conducting a spe­
we estimate that approximately
16 million bottles of Bralima cial investigation into violence
beer, or about 2,000 transport in the country's east. "So the
vehicles' worth, must pass choice they would have had at
through checkpoints each that point — and that any local
year. Assuming, based on businessman had at that point
our low­end estimates, that — was to disengage and to leave
these trucks are fortunate and stop business, or to contin­
enough to be stopped on­ ue," Mr Stearns said.
Bralima's decision, along with
those of other companies that
continued to operate in the re­
gion, was extensively document­
M23 but also other road and ed in the Lutundula Report, the
ly once per journey at the
dozens of blockades along
the region's few transport
links, manned not only by
or provided financial, material,
or technological support" to any
anti­government militants oper­
ating in the DRC.
UN Security Council Resolu­
tion 1493, adopted in 2003, also
sanctions assistance to rebel
groups in the region. But the
sanctions are extremely difficult
to enforce, especially given that
most companies in eastern Con­
go work with local partners.
Despite all best efforts, in a
place like eastern Congo, once
a corporation goes in, it can
become difficult for anyone
river rebel sentries, Bralima Congolese parliament's 2005 as­ — whether local governments,
distributors could be paying sessment of conflict profiteer­ international observers, or far­
upward of $1 million a year to ing. Although the widespread flung corporate executives — to
rebel groups.
When we presented Heineken
with our figure this summer,
John­Paul Schuirink, financial
communications manager, said
payments to rebels are common
knowledge, the Congolese gov­ control exactly what goes
there.
ernment hasnt followed up the
Accarding to Mr Malanda,
Lutundula Report with further
the situation in the DRC and
investigations, and business has
proceeded as usual ever since.
"It's not just Bralima that con­
the use of local distributors, the
amount and the payments were
tinued, but it's every single Con­
golese company in the country,"
difficult for Heineken to verify.
said Mr Stearns.
But Mr Schuirink said that in
Given beer's almost mythical
status in Congo, shutting down
that due to the complexity of
response to Foreign Policy's in­
quiry, the company was in the
process of investigating and, as
a precaution, had "immediately
Bral iria's communications man­
ager, his bosses back in Amster­
dam c on't care much about how
he ma kes money — so long as it
gets made. "For Heineken, what
matte:­s is our sales goals. If we
make them, all is good. If not,
big trouble!" said Mr Malanda,
laughi ng as he pretended to beat
us with an imaginary stick. (Mr
Schuirink told us, "We do not
recognise, nor condone these
staten.ents.'')
party distributor invoices in the
Bralima in the east, though it
could dry up some funds going
to M23, would do little beyond
driving up prices and encourag­
ing smuggling. (Last year, a lo­
area."
gistical problem disrupted the Brewe r's headquarters
suspended all payment of third
Mr Schuirink also noted in
an e­mail that "this area repre­
sents far less than one per cent
of our total volume in the DRC
and that the vast majority of our
deliveries in the area are outside
$1 million
The amount Bralima distributors
could be paying to rebel groups
of the territories that are under every year
the influence of M23."
flow of beer in Goma for just
Bralima outsources its dis­ under two weeks, leading to a
tribution to local independent
operators, a common way for
corporations working in mili­
50­cent increase per bottle, ac­
cording to members of Bralima's
distribution staff, who said that
At Heineken's headquarters
in ceni ral Amsterdam, a vaulted
house perched across the canal
from he firm's original brick
breweiy, global communica­
tions director John Clarke put
the company's philosophy in
quite c ifferent terms. "There's a
view, t belief that you can help
the most by being there, being
presen;... being a contributor to
the loc il economy," he told us.
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Heineken's approach in the
DRC fc Hows a business concept
known as corporate social re­
sponsibility <CSR). Part social
investment, part public rela­
tions campaign, and part com­
munity integration effort, CSR
assumes that if big companies
tion, for example, spent more
The most recent thinking
than hilf a million dollars last
about CSR holds that the mere
year supporting programmes
for prenatal care, sickle cell
anaemia clinics, blood banks,
Havin? Bralima in eastern
presenca of a major corporation
in an unstable region is bene^fi­ Congo, so the theory goes, is a
cial. A century of scholarship CSR actvity in itself. However,
on the complicated ties between in reality, having Heineken in
poverty and violence has argued eastern Congo may boost GDP,
that greater economic integra­ but its p lyments to rebels fuel a
tion can help bring peace to cha­ conflict 1 hat leads the country ai
and primary schools. Brali­
ma's foundation recently spent
$90,000 building an orphanage.
can ali­.ni their self­interest with
Almost all other international
the interests of the countries in
food and drink conglomerates
operating in fragile countries,
from Kraft and Mars to Pepsi
and Nestle, undertake similar
which they're investing, every­
one benefits.
The ieineken Africa Founda­
outreaca.
can leat to a more Utopian fu­
ture for ocal residents.
otic parts of the world. Accord­ the wror g direction.
ing to the World Bank, this sort ByJasot Miklian and
of corpcrate opening is "crucial Peer Scfumten
for countries coping with and Foreign Policy Magazine
emerging from violence" and
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A beer advert
on a billboard
in Biikavii, DR
Congo. Brali­
ma is able
to produce,
market and
distribute its
beer all over
the country.
Picture: File
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You can
bomb a
hospital,
but not
Bralima!"
Residents of
Goma, eastern
DR Congo
$1M BEER BONANZA
PASS CHARGES: M23 takes
$500 from each truck hauling
crates of Primus into rebel­
controlled areas. They charge
$38 for a van to pass, $300 for
a medium­sized goods truck,
and $700 for a fuel tanker
and hand out official­looking
receipts for payment. The three
main checkpoints bring in most
of the group's funding, enough
money to purchase weapons,
pay salaries and bribes, and
even occasionally dole out
social aid to eastern Congo's
poor,
OVERALL COSTS:
Extrapolating from Bralima's
DRC market share and
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