While foreign beer majors Anheuser-Busch Cos, Inc. and SAB Miller Plc. are brewing plans to tap the growing beer market in India, domestic giant United Breweries Ltd is looking beyond India with its Kingfisher brand.
The Indian brewer, which is part of the Vijay Mallya-controlled liquor and airlines group, is planning to tap the European market using the marketing muscle of its joint venture partner, Scottish & Newcastle Plc.
A file photo of UB Group chairman Vijay Mallya. The company hopes to sell five million cases of beer in Europe by end-2009
United Breweries (UB) has been selling Kingfisher beer in Europe through its own network, but Scottish & Newcastle will take on the distribution of UB’s brands also in Europe, said Kalyan Ganguly, managing director, UB.
UB, which is a joint venture between the UB Group and the European brewer Scottish & Newcastle, is currently the largest beer company by sales in India with almost 60% market share.
The company sells about 2.5 million cases in Europe, mainly in the UK. UB is now looking to double the sales in the continent within two years. The company is not only expanding its sales and marketing efforts through Scottish’s network, but also proposing a major brewing capacity expansion in the UK.
Currently, the company uses a contract brewer and Ganguly said it is planning to expand capacity by hiring more breweries.
“By the end of 2009, we will achieve a sales of five million cases in Europe as Kingfisher is now emerging as a well-known brand among the local consumers as well,” he added.
UB’s key target market segments are traveling and non-resident Indians in Europe and Canada. “We want to build up the brand popular among the local community as well using the capabilities of our partner,” said Ganguly.
The move is significant because UB is currently the second-largest liquor company in the world after the Diageo Plc., and is looking to take some Indian brands beyond India.
Scottish & Newcastle, which holds 35% equity in United Breweries, is an international, beer-led drinks business with operations in 15 countries in Europe and Asia. It also exports to about 60 countries and ranks No. 7, by volume, among the world’s Top 10 brewers. Scottish & Newcastle holds market leadership in three of the six largest beer markets in Europe: the UK, France and Russia.
UB is the market leader in the 120 million cases a year Indian beer market with its most popular brand Kingfisher and sells about 62 million cases with a well established dealer network across the country. The company has about 32 breweries spread across all the states. It is also planning a major capacity expansion in all these breweries apart from setting up six new factories with a capital outlay of Rs1,200 crore in the next three years.
Meanwhile, Anheuser-Busch has set up its first brewery in India jointly with its local partners Crown Breweries Ltd. The US beer company has launched its Budweiser beer in India.
South Africa-based SAB has also announced a major expansion plan in India and created an independent Asia and Africa business regions, considering the future growth potential of the group in these regions.