Identifier
Created
Classification
Origin
09ADDISABABA738
2009-03-30 11:01:00
CONFIDENTIAL
Embassy Addis Ababa
Cable title:  

PARTY-STATAL DASHEN BREWERY SHOWS PROFITS AND THE

Tags:  ECON PGOV ETRD ET 
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ZNY CCCCC ZZH
R 301101Z MAR 09
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 4256
INFO RUCNIAD/IGAD COLLECTIVE
RUEAIIA/CIA WASHINGTON DC
RUEPADJ/CJTF HOA
RUEKDIA/DIA WASHINGTON DC
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUZEFAA/HQ USAFRICOM STUTTGART GE
RUEKJCS/JOINT STAFF WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 ADDIS ABABA 000738 

SIPDIS

E.O. 12958: DECL: 03/23/2019
TAGS: ECON PGOV ETRD ET
SUBJECT: PARTY-STATAL DASHEN BREWERY SHOWS PROFITS AND THE
EXCESSES OF POWER

REF: ADDIS 677

Classified By: Ambassador Donald Yamamoto. Reasons 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 ADDIS ABABA 000738

SIPDIS

E.O. 12958: DECL: 03/23/2019
TAGS: ECON PGOV ETRD ET
SUBJECT: PARTY-STATAL DASHEN BREWERY SHOWS PROFITS AND THE
EXCESSES OF POWER

REF: ADDIS 677

Classified By: Ambassador Donald Yamamoto. Reasons 1.4 (b) and (d).


1. (C) In a recent visit to Gonder, PolOff and Political
Specialist visited ruling party owned Dashen Brewery to
explore a mid-2008 labor dispute, the media coverage of which
showed the long arm of the ruling party in protecting its
commercial interests. We found a company both profitable and
expanding, and a General Manager confident of his, and his
company's, protected status.


2. (SBU) Dashen Brewery is one of the companies owned by the
Amhara National Democratic Movement's (ANDM) endowment Tirit
(Reftel),and is the biggest brewery in Ethiopia with a 75
million liter capacity. It has 450 employees and an annual
income of USD 85 million per year, with profits of USD 25
million. From a traditionally urban market, the market share
has increasingly shifted to the countryside in the past 4-5
years. Dashen beer is exported to Ireland, Israel, South
Sudan, and Australia, and the brewery has plans to start
exporting to West African countries soon. These expansion
plans may be endangered as the brewery is encountering a
shortage of packaging materials as there is only one glass
manufacturer in Ethiopia that produces bottles for all six
breweries that operate in the country. In the next year,
Dashen plans to open a malting plant in Gonder so that the
company can purchase barley from Ethiopian farmers and turn
it into malt domestically instead of importing malt from
Belgium.


3. (C) In July 2008, The Reporter newspaper published a story
criticizing Dashen Brewery for its labor practices following
a labor dispute at the brewery. Dashen Brewery brought a
libel case against the newspaper in response to the article.
Following the appearance of the story, Amare Aregawi, then
editor-in-chief of The Reporter, claims that he was detained
by Amhara regional police in Addis Ababa and brought to
Gonder. For his part, Amare claims that the case was handled
in an extrajudicial manner because the Amhara regional
police, using a Dashen vehicle, crossed jurisdictional lines
when they came to Addis Ababa to detain him unlawfully for
reporting on the dispute. Berhanu Admasu, General Manager of
the brewery, contended that the case was, in fact, being
handled in a legal manner. He claims that it was not the
Amhara regional police, but rather the Addis Ababa police,
who arrested Amare. The Addis Ababa police then transferred
Amare to the federal police, who transferred him to the
Amhara regional police. When pressed about the facts Berhanu
seemed unsure and said that the reason for the delay in the
case was because the evidence was hard to gather. (COMMENT:
This is difficult to believe since the evidence in question
was published in The Reporter. END COMMENT.) No charges
have been brought against Amare to date.


4. (SBU) In a conversation with PolOff, Berhanu criticized
Amare as being an unethical journalist, and said that
everyone is afraid of Amare but "unfortunately he collided
with me." The conversation continued over dinner and Berhanu
began to divulge more information about his ties to the
EPRDF. When first asked, he claimed that he had no
affiliation with the EPRDF, but later it became clear that he
was empowered by the party. When asked to whom he reports,
Berhanu replied, "to God himself," and later conceded that he
also reports to Bereket Simon, Dashen Brewery Board Chairman
(a government minister and ANDM politburo member) and to
Deputy Prime Minister Addisu Legesse. When Amare's case came
up in conversation again, Berhanu became visibly upset and
said, "I can make or break anyone. I have the right to kill."

Comment
--------------


4. (C) Our Dashen visit offered additional insights into
Ethiopia's ruling party's "party-statals" or endowment
companies. Contrary to the government's marginally
profitable state-owned enterprises, this visit and reftel on
the endowment highlight that the ruling party's companies are
thriving. With this growth comes an increased sense of power
and invincibility for the leadership of the brewery. While
Berhanu was clearly well-versed in the details of his trade,
his comments offered a glimpse into -- at least his
perception of -- his protected status as a key profit maker
for the ruling party. End Comment.

ADDIS ABAB 00000738 002 OF 002


YAMAMOTO