Vijay Mallya's United Breweries has held a vice-like grip over the Indian beer market with the Kingfisher, Kalyani and Sandpiper brands. With 137 million cases (12 bottles each), it has a 45 per cent market share. But now multinationals are closing in on UB.
SABMiller has 35 per cent market share after its acquisitions in the country. Its biggest buy was Shaw Wallace's beer business. It is yet to roll out its global flagship, Castle, in India.
Other global brands such as Budweiser, Heineken, Carlsberg, Cobra and Beck's have managed a 12 per cent market share.
Thus, overseas companies now lord over the beer market with a total 47 per cent share.
"The entry of MNC beer companies is likely to stimulate the industry. But, with its proven experience and leadership, UB may capture a dominant share in this growth," says a UB spokesperson.
For MNC beer companies, India is the next frontier. Per capita beer consumption is still low at 0.7 litres a year.
Current growth is pitched at 13 per cent and the beer market is expected to more than double to 23.3 million hectolitres by 2012. Hence, despite consumption being low, India is among the top three markets in Asia in terms of expected growth rates.
As western markets show signs of stagnation, the stakes are high for MNCs in India. According to experts, the MNCs will invest $250 million in strengthening their distribution network.
"We see a huge potential, driven by the increasing purchasing power and the expected deregulation of the Industry," says Jasper B Madsen, senior vice-president, Carlsberg Asia.
"We hope to achieve 10 per cent of our profits from the Asian markets by next year, with India contributing significantly."
UK-based Cobra Beer has four licensing agreements with Mount Shivalik Group of Rajasthan, Impala Breweries in Goa, Manav Breweries in Uttar Pradesh and Iceberg in Bihar.
It is setting up four new plants in the country, one in each region, with an investment of $15 million per plant, Karan Bilimoria, the promoter of Cobra, said recently. He is also planning to acquire a brewery in India.
Belgian beer giant InBev has picked up 49 per cent stake in a joint venture with RJ Corp, which is the majority stakeholder with a 51 per cent holding. InBev makes Stella Artois and Beck's.
APB, a joint venture of Singapore's Fraser & Neave and Dutch brewer Heineken, last year bought 76 per cent in Aurangabad Breweries and 67 per cent in another joint venture for a greenfield brewery near Hyderabad. APB has introduced Baron's and Heineken in the market.
American brewer Anheuser-Busch has announced a joint venture with Indian brewer Crown Beers, to brew, market and distribute Budweiser and other brands here.
Already Carlsberg and Cobra have started placing surrogate advertisements in the media.
- UB group has 45 per cent market share
- Together with SABMiller's 35 per cent, MNCs command 47 per cent market share
- With western markets stagnating, MNCs are finding India a best bet where the industry is growing at 13 per cent
- Cobra, Budweiser, Heineken, Carlsberg, and Beck's have a foothold in India
- They are also watching deregulation of the Indian market
- Heineken's JV has picked up 76 per cent in Aurangabad Breweries