Active Stocks
Tue Mar 19 2024 15:58:41
  1. Tata Consultancy Services share price
  2. 3,977.55 -4.03%
  1. Tata Steel share price
  2. 148.65 -0.64%
  1. Bharti Airtel share price
  2. 1,227.85 0.23%
  1. Power Grid Corporation Of India share price
  2. 258.95 -2.28%
  1. ITC share price
  2. 409.50 -1.89%
Business News/ Companies / Molson Coors buys Thunderbolt beer maker
BackBack

Molson Coors buys Thunderbolt beer maker

Deal will boost Molson Coors's distribution in areas where Mount Shivalik has built a steady network

A file photo of Molson Coors brewery and bottling plant in Burton-upon-Trent, UK. Photo: Bloomberg Premium
A file photo of Molson Coors brewery and bottling plant in Burton-upon-Trent, UK. Photo: Bloomberg

Bengaluru: Molson Coors Brewing Co., North America’s second-biggest beer company, on Wednesday announced the acquisition of Mohali-based Mount Shivalik Breweries Ltd (MSBL) for an undisclosed amount.

The acquisition gives it sweeping control of two breweries, apart from adding strong beer brand Thunderbolt to its portfolio.

As part of the transaction, Molson Coors International (MCI) acquired MSBL’s entire brand portfolio, and will assume direct control over brewing operations in Haryana and Punjab, giving it an additional capacity of 600,000 hectoliters.

“With the added brewing capacity, increased distribution channels, as well as the passion and skill of MSBL employees, we believe the strategic benefits of this transaction are abundant and clear," said Kandy Anand, president and chief executive officer of MCI, the local arm of Molson Coors Brewing Co, that sells beer brands such as Iceberg’s 9000, King Cobra and Royal Brew in India.

To be sure, Molson Coors has spent close to 750 crore since its entry into India in June 2011, in acquiring existing domestic beer brands such as Thunderbolt and launching brands such as Carling from its international portfolio.

“India is a lucrative market for most international brewers, who have been scouting for sizable acquisition targets," said Ankur Bisen, senior vice-president of retail and consumer products at consulting firm Technopak Advisors Pvt. Ltd, citing Diageo Plc’s long-drawn interest in buying United Spirits the maker of McDowell’s and Signature brand of whiskies.

Since India is largely a strong beer market, Thunderbolt has a strong recall in some markets in the North, Bisen added. “It makes sense for a international brewer to gain more market share with such a local brand, even though its presence is limited to a few states."

Demand for such brands, he adds is strong in outskirts of urban areas and tier-II markets.

The latest acquisition will give a boost to the American brewer’s distribution in Punjab, Haryana, Jharkhand, West Bengal and Uttar Pradesh, where MSBL has built a steady distribution network since its establishment in 1972.

“We’ve largely been focused only a few states, primarily Bihar, but this acquisition will give us a presence in more states ,where we plan to gain market leadership over months to come," he added.

Thunderbolt will be the company’s key brand for entry into new markets, Anand indicated.

Molson will also spend money in upgrading the existing facilities as it ramps up distribution for Thunderbolt over the next 12 months.

Strong beer, which refers to brews with alcohol content of 5-8% and brands such as Cobra, Thunderbolt, Kingfisher Strong among others, comprises more than 80% of all beer sold in India.

Over-all market size of beer in India is pegged at 270-280 million cases per annum.

Molson Coors entered India by purchasing a controlling stake of Cobra India, creating the joint venture Molson Coors Cobra India. Molson Coors Cobra currently maintains one brewery in Bihar.

The company that has largely built its business in India through purchase of local companies, said it would continue the strategy going forward.

Anand indicated that the company will look at inorganic opportunities in the domestic beer market to lap up market share in the country, that remains strongly dominated by domestic beer brewer United Breweries Ltd and British brewer SABMiller.

In 2013, Molson Coors Cobra entered into a brewing and distribution agreement with MSBL, whereby each party would brew and distribute each other’s brands in their respective markets.

MSBL operates as a separate entity from Molson Coors Cobra with a separate governing board and will be headed by Ravi Kaza, currently managing director at Molson Coors Cobra.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 01 Apr 2015, 06:59 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie