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SABMiller brews new plan

November 10, 2005 12:06 IST

Brewing giant SABMiller Plc has dropped its earlier plan of growth through acquisition of local brands in India. Instead, it will expand its portfolio by introduction of its own international brands.

Talking to Business Standard, SABMiller Africa and Asia (Pty) managing director Andre Parker said the company would "shortly" begin test marketing of an Italian brand Peroni in Mumbai.

The company, which has been in the country for the last five years sells beer brands such as Haywards 5000, Knock Out, Castle and Royal Challenge in India.

"We did not find any exciting brands here. Most of the brands are local in nature. Besides, we do not need lot of brands to cater to the country's demand," he said.

The world's second largest brewer would invest $125 million in five years to develop national brands across the country. The investment would also finance ramping up of production capacity. Since inception it had invested nearly $ 130 million in India.

Although Parker did not divulge the production capacity the company was aiming at, he said it would be happy to register a 12-14 per cent growth. It has nine breweries with a combined capacity of 2.5 million hectare litre a year.

SABMiller entered India in 2000 with acquisition of Narang Breweries in Uttar Pradesh. Subsequently, it bought one brewery each in Karnataka and Maharastra. It is the majority owner of a brewery in Rajasthan. This year, SABMiller had bought Jumbo Group's Shaw Wallace Breweries.

Parkar said the company, which enjoys one-third share of the market, and its peers were taking up initiatives to expand the market. The Rs 700 crore (Rs 7 billion) beer market is growing at double-digit rate but still per capita consumption is as low as less than a litre implying that there is huge scope for further growth. The UB group is the market leader with a 50 per cent share.

The London-based group bought the US brewer Miller in 2002. It recently acquired Colombia's Bavaria S.A., making it the world's second largest brewer behind InBev, ahead of the US-based Anheuser-Busch Cos Inc.
Kausik Datta & Prince Thomas in Mumbai
Source: source