Mumbai: Brewer Scottish & Newcastle Plc expects quick growth in India, China and Vietnam, with its ventures in these markets contributing a larger share of its overall revenue, a senior company official said.
S&N, the biggest brewer in Britain, France and Russia, expects rising incomes and changing consumer behaviour to spark demand for premium international beer in Asian markets, John Hunt, S&N’s managing director for Asia, said late on Thursday.
S&N holds 37.5% in India’s top brewer United Breweries Ltd and has a venture with China’s Chongqing Brewery Co. “In Asia, our focus markets are China, India and Vietnam, and they are all important for our business,” Hunt said on the sidelines of a UB news conference.
“They are similar in that they have strong GDP growth, greater purchasing power, a young demographic and a change in social attitudes toward drinking,” he said.
In contrast to slowing growth in several western markets, UB expects India growth in excess of 20% annually. Local brands dominate Asian markets that S&N is present in, so the brewer has chosen to enter ventures with local partners to enable it introduce its premium brands later.
“Look at Russia, a massive market... it has evolved from being a market of local brands to one that has many foreign brands,” Hunt said. S&N jointly owns Russia’s leading brewer Baltika with Danish brewer Carlsberg, where it has forecast growth to be in the range of 11-13% in 2007.
“In China, international beer brands occupy only a small part of the premium market, but in Vietnam they have about 15-20% of the premium market,” he said.
Consumption of beer per person in India, where production, sale and advertising are tightly regulated, is just 1 litre, compared with an estimated 24 litres in China.
UB has more than half the Indian market, with SAB Miller controlling a third. Anheuser-Busch Cos and Diageo Plc have also entered the market where imported beer brands have less than 0.5%.
S&N’s revenue from Asia makes up just under 10 percent of its overall revenue, Hunt estimates, but it will climb quickly.“Our ambition is to make Asia a material part of our business,” he said.