Bibliography: pages 94-102.The South African Breweries Limited (SAB) is an extremely profitable business. In 1996, for example, group profits before taxes exceeded R3 billion, some 10 percent of total assets. For a capital intensive manufacturing enterprise, this represents a truly extraordinary result. The company is also South Africa's premier industrial enterprise. Between 1990 and 1996, for instance, SAB's return on equity consistently averaged around 5 percent per annum above the representative return on equity, calculated for the market as a whole. And as the country's largest single manufacturing business, SAB produces more than two percent of South Africa's gross national product of roughly one percent of the country's fixed capital stock. For these reasons, SAB is in its own right an economic unit of some interest and significance. But for the purposes of this dissertation, three additional features of the SAB group are significant. Firstly, SAB may be regarded, for many practical purposes, as the single supplier of malt beer in South Africa, a position which on several occasions has been termed a "monopoly". Secondly, SAB has until fairly recently formed part of a greater system of diversified arrangements - namely the Anglo American group. The company has also diversified into a variety of operations in its own right. SAB is therefore located at the heart of South Africa's so-called "group" structure: the group is itself a diversified conglomerate; and has for a considerable period of its history formed part of a broader conglomerate. Thirdly, SAB is part of a set of "pyramid" arrangements, an elaborate hierarchical system of corporate ownership and control. Each of these features of the SAB group - monopoly, conglomerate, pyramid - will be examined in detail in this dissertation. For the moment, it will be sufficient to note only that SAB is an interesting subject of analysis, for four distinct reasons. Firstly, the company is extremely profitable. Secondly, the company is also the sole supplier of malt beer in South Africa. Thirdly, the company forms an integral part of the South African system of conglomerates. Finally, the group is also a pyramid. At this point, it should be an obvious question whether an explanation for the superior profitability of the SAB group may be found in any one, or some combination, of these factors. In particular, the following chapters aim to establish whether SAB's position as single supplier in the malt beer industry; SAB's strategy of conglomerate diversification; and the group's pyramid corporate structure, are related in an economically important way to the profitability of this, South Africa's premier industrial enterprise. In this dissertation, the above question is addressed systematically: Chapter 1 examines the influence on SAB's profitability of the company's "monopoly" or single supplier position in the domestic malt beer industry. Chapter 2 investigates SAB's conglomerate structure to establish whether the firm's superior profitability may be explained by the system of diversified groups. Chapter 3 examines the impact on SAB's profitability of the "pyramid" corporate control system. The final chapter presents the investigation's conclusions
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