India: SABMiller ready to compete with UB Breweries to be the most respected brewer in India
After clinching the $120-million Foster’s India acquisition deal, London-based SABMiller Plc is planning to invest Rs 120 crore in its operations in India for capacity expansion and modernisation, Daily News & Analysis released August 21.
SABMiller India director, corporate affairs, Sundeep Kumar said, “Our objective is to be the most respected and leading beer maker in the country. In the last 30 months, we have been completely focused on consolidating our business in India.”
SABMiller is currently the second-largest brewer in the country, with brands like Royal Challenge, Haywards 5000, Castle and Haywards Black.
The company is not just looking at increasing market share, which is currently at around 37% (this includes 6% of Foster’s), but also focusing on capacity expansion and modernisation.
Market leader UB Group, owned by Vijay Mallya, has a 46% share.
But, SABMiller isn’t blindly playing the market share game. “We don’t just want to grow in terms of market share. In the past, we have strategically killed brands if they were not profitable. What we are looking at is sustainable growth in Indian market,” said Kumar.
With the acquisition of Foster’s India, the US$15-billion brewer has added Amberro - mild and strong - beer brands to its brand fund. It has also added capacity with the Australian major’s brewery in Aurangabad.
“The Foster’s brand can leverage from our manufacturing and distribution network in India. Since we have presence in 19 states with 10 breweries across India, it would be more cost effective to sell Foster’s pan India as it will help us to effectively cut down duty costs,” says Kumar
Major global beer players are eyeing the Rs 3,000-crore Indian beer market, which is growing at a healthy pace compared to other markets. Amongst those keen to enter is the Saint Louis brewer Anheuser-Busch Cos, maker of the Budweiser brand, which reportedly wants foray in before the end of this year.
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