India: United Breweries and SABMiller increase beer production to meet summer thirst

Expecting a spurt in demand in the summer months (mid-March to mid-July), the two major brewers - United Breweries Ltd (UB) and SABMiller, which together corner around 80% of the beer market - are gearing up to ensure uninterrupted flow of the frothy brew, Daily News & Analysis published March 6. While Vijay Mallya�s UB reportedly plans to up capacity by 50%, SABMiller has been stocking up since January.

�Demand is going up everywhere but growth in the North is particularly buoyant because of structural changes in Haryana and Punjab. Traditionally, beer consumption in the South was higher compared to other regions. The South drinks beer throughout the year, but in the North, beer demand is seasonal. To meet the peak demand, we are increasing both capacity in installed and contract brewing,� said Shekhar Ramamurthy, head of UB�s beer division. SABMiller, which has a current capacity of 42 million cases, also has plans to expand it further.

�We have increased our beer capacity by around 50-60% over the last three years and will add more this year. It is an ongoing process. We have extended capacity at Neemrana plant in Rajasthan this year for the peak demand. Since we rely completely on our own beer, and not contract brewing, we have built up enough capacity over the last three years,� said Sandeep Kumar, SABMiller�s director - corporate affairs.

In 2006, SABMiller acquired Foster�s Indian business, which included a brewery in Aurangabad with an annual capacity of 3.5 lakh hectolitres. UB�s brewery in Rajasthan is expected to go on stream next month. This will increase its beer production by 7 lakh hectolitres just before peak season takes off.

According to Kumar, over 60% of the beer consumed annually is sold between March and July. He expects the beer market, which is growing in excess of 25%, to grow to 140 million cases this year, double that in 2005.

Meanwhile, Anheuser-Busch Cos Inc, the US� largest brewer, could also be ready to launch its beer brand Budweiser this peak season. It has formed a joint venture with India�s Crown Beer to brew, sell and market its beer brands in India. The alliance firm will be called Crown Beers India Ltd.

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