Bangalore: Singapore-based Asia Pacific Breweries Ltd (APB) aims to double sales in India of its brands, including Tiger and Barons Strong Brew, and strengthen distribution network before locally producing its flagship product Heineken.
“We are targeting 3 million cases in the current year,” said Vivek Chhabra, APB’s regional director for South Asia.
APB sold 1 million cases of beer in 2006, its first year of operation in India, and 1.5 million cases in 2007.
New targets: Vivek Chhabra, APB South Asia regional director.
Each case contains 7.8 litres in 12 bottles of 650 millilitres each.
India’s beer market of around 158 million cases a year saw a growth of 30% in 2007, but price hikes in states such as Maharashtra, a key beer market, are likely to slow down the growth to around 14% in 2008, said Sundeep Kumar, director, corporate affairs and communication, at SABmiller India, a subsidiary of the UK-based SABMiller Plc., the world’s second largest brewer.
The increases were due to the rising cost of transportation and ingredients such as barley and hops.
Beer in India is costlier than most other countries because it is taxed at par with spirits such as whiskey or rum, and free pricing is not allowed in many states. In Andhra Pradesh, where brewers have been demanding an increase in prices, the industry this year stopped supply for a month during the summer, when sales peak.
“Albiet of a low base, we have seen strong growth in market share at a time when the industry grew at its slowest in the last several years,” said Chhabra.
He did not disclose financial details.
United Breweries Ltd, India’s largest brewer by sales, and which owns the Kingfisher brand, reported sales of Rs474.62 crore in the quarter ended June, a growth of 41.82% over sales of Rs334.65 crore in the year-ago period.
India’s per capita consumption of beer is just under a litre, compared with nearly 24 litres globally.
Newer entrants, such as APB, see the country’s economic growth of more than 8% fuel business along with other markets in South Asia, such as Sri Lanka.
“We have expanded our Aurangabad brewery (in Maharashtra) by 50% (volume) to a capacity of 300,000 hectolitres in March and we are looking to expand capacity in Hyderabad (currently 250,000 hectolitres) significantly by the (summer) season next year,” Chhabra said.
A hectolitre is 100 litres.
“Once our three brands are well established, we will look at getting in our other brands. There are no immediate plans to launch Heineken.”
Apart from its international brands Tiger and Barons Strong Brew, APB also produces a local brand Cannon 10,000.
On 31 July, APB made its brewery in Aurangabad a wholly owned subsidiary by acquiring the remaining 24% stake from partner Chowgule and Co. Pvt. Ltd.
A second brewery in Hyderabad, started as a joint venture with PepsiCo India’s bottler Jaipuria Beverages and Food Industries Ltd, began operations in January.