In 1886, proclamation of the Witwatersrand goldfields, mining town of Johannesburg was established. South African Breweries was founded in1895, with share capital of 350,000 and 300,000 of debentures. The drink of choice in South Africa's dusty prospecting fields was raw potato spirit mixed with tobacco juice and pepper. The small wonder beer created a powerful competition. In 1896, SAB established a bar on company land in central Johannesburg with the capacity of 50,000 barrels per annum, and in 1898 Castle Lager was launched. The Diggers" News Headline at that time read: "Castle Lager beer a phenomenal success. Taste its brilliancy, taste its flavor, 6 pence per glass". Despite the war in 1899, that disrupted the economic and social conditions, SAB's annual profit rose to 100,000 and assets exceed 1 million, making SAB the fastest-growing nonmining firm locally.
In 1949, massive expansion programme of 4.5 million involves breweries, small hotels and pubs. SAB's head office and seat of control was moved from London to Johannesburg in 1950. Work began on new Castle Brewery site in Isando, east of Johannesburg-the largest brew house in Africa and one of the most modern in the world. In 1955, discriminatory excise duty structures favor spirits and prejudice beer, making it the most heavily taxed beverage in South Africa. SAB responded by buying out Ohlsson's and Chandlers Union Breweries group for some 400,000, enabling extensive rationalization of production and distribution facilities and eliminating much wasteful competition. The capital of the new group increased to 6.15 million. The irony of the double acquisition was that it was driven by SAB, with the smallest asset base, but with the vision and appetite, which catapulted it, overnight into a virtually unassailable position in the market in 1956.
In 1960, SAB extends its involvement in the liquor industry by acquiring control of Stellenbosch Farmers" Winery.