BeerMarketInIndia Euromonitor April 2004

Indian Market for Beer
Euromonitor
April 2004
The World Market for TITLE India
List of Contents and Tables

Introduction & Definitions............................................................................................................. 1
Market Size: Beer – Off-trade vs On-trade Volume & Value......................................................... 2
TABLE 1 VOLUME OFF-TRADE VS ON-TRADE SALES OF BEER
1998-2003............................................................................................ 3
TABLE 2 VALUE OFF-TRADE VS ON-TRADE SALES OF BEER
1998-2003............................................................................................ 3
Market Size: Beer by Sector – Off-Trade & On-Trade Volume & Value ....................................... 3
TABLE 3 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER
BY SECTOR 1998-2003 ..................................................................... 7
TABLE 4 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY
SECTOR 1998-2003............................................................................ 7
Market Size: Beer by Region – Off-Trade & On-Trade Volume & Value...................................... 7
TABLE 5 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER
BY REGION 1998-2003 ..................................................................... 9
TABLE 6 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY
REGION 1998-2003.......................................................................... 10
Market Size: Beer by Packaging Format – Off-Trade Volume .................................................... 10
TABLE 7 VOLUME OFF-TRADE SALES OF BEER BY
PACKAGING FORMAT: % ANALYSIS 1998/2003 ...................... 11
Sector Size: Lager by Domestic/Imported Split – Off-Trade & On-Trade Volume &
Value............................................................................................................................ 11
TABLE 8 VOLUME OFF-TRADE & ON-TRADE SALES OF LAGER
BY DOMESTIC/IMPORTED SPLIT 1998-2003 ............................. 12
TABLE 9 VALUE OFF-TRADE & ON-TRADE SALES OF LAGER
BY DOMESTIC/IMPORTED SPLIT 1998-2003 ............................. 12
New Product Developments: Beer ............................................................................................... 12
SUMMARY 1 BEER NEW PRODUCT DEVELOPMENTS 2002-2003 ................. 14
Market Shares: Beer – National Brand Owner, Global Brand Owner & Brand ......................... 15
TABLE 10 VOLUME NATIONAL BRAND OWNER SHARES OF
BEER 2001-2002............................................................................... 16
TABLE 11 VOLUME GLOBAL BRAND OWNER SHARES OF BEER
2000-2002.......................................................................................... 16
TABLE 12 VOLUME BRAND SHARES OF BEER 2000-2002........................ 17
Market Shares: Beer by Region – Brand Ranking ....................................................................... 17
TABLE 13 BRAND RANKING OF BEER BY REGION 2002.......................... 19
Sector Shares: Lager – Brand...................................................................................................... 19
TABLE 14 VOLUME BRAND SHARES OF DOMESTIC LAGER
2000-2002.......................................................................................... 20
Company Profiles: BrewCo Ltd................................................................................................... 20
SUMMARY 2 BREWCO LTD: OPERATIONAL INDICATORS 2002 .................. 21
TABLE 15 BREWCO LTD: VOLUME SHARES OF BEER BY
SECTOR 2000-2002.......................................................................... 22
Company Profiles: Shaw Wallace & Co Ltd................................................................................ 22
TABLE 16 SHAW WALLACE & CO LTD: VOLUME SHARES OF
BEER BY SECTOR 2000-2002 ........................................................ 24
Distribution: Beer – Off-Trade .................................................................................................... 24
TABLE 17 VOLUME OFF-TRADE SALES OF BEER BY
DISTRIBUTION FORMAT: % ANALYSIS 1998/2003 .................. 25
Market Forecasts: Beer – Off-Trade & On-Trade Volume & Value............................................ 25
TABLE 18 FORECAST VOLUME OFF-TRADE & ON-TRADE
SALES OF BEER BY SECTOR 2003-2008 ..................................... 28
TABLE 19 FORECAST VALUE OFF-TRADE & ON-TRADE SALES
OF BEER BY SECTOR 2003-2008 .................................................. 29
Market Forecasts: Beer by Region – Off-Trade & On-Trade Volume & Value........................... 29
TABLE 20 FORECAST VOLUME OFF-TRADE & ON-TRADE
SALES OF BEER BY REGION 2003-2008 ..................................... 30
Euromonitor Page i
TABLE 21 FORECAST VALUE OFF-TRADE & ON-TRADE SALES

OF BEER BY REGION 2003-2008 .................................................. 30
Euromonitor Page ii
INDIAN MARKET FOR BEER
Introduction & Definitions

This report looks at the market for beer in India. For the purposes of the report, Euromonitor has
divided the market into the following four main product sectors:
• Lager: further subdivided into premium, standard, economy
• Dark beer
• Stout
• Non-alcohol/Low-alcohol beer
However, sales of dark beer, stout and non-alcohol/low-alcohol beer remain virtually non-existent.
Unit conversions of cases to litres for beer: 1 case of beer includes 12 bottles of 650ml each = 7.8
litres.
The review period covered is 1998-2003 and forecasts are made to the year 2008.
In order to give a clearer insight into the Indian market, analysis is given at both national and
regional levels. For the purposes of this study, India has been broken down into four broad regions:
North India
• Major states in the North region include Delhi, Punjab, Haryana, Himachal Pradesh, Uttar
Pradesh, Rajasthan, Uttaranchal, Jammu & Kashmir and Chandigarh (Union Territory).
• This is the most populous of the four regions, with 243 million inhabitants. Uttar Pradesh is the
most populous state in India. The states of Jammu & Kashmir, Himachal Pradesh and the
Union Territory of Chandigarh are very small, and therefore contribute very little to the total
output of the region. Uttaranchal is a newly formed state, split from Uttar Pradesh in January
2001.
• This region produces an agriculture surplus, but industrial activity is moderate. Punjab is the
leading state for agricultural produce.
East & Northeast India

• Major states in this region include Calcutta, West Bengal, Bihar, Orissa, Sikkim, Assam,
Meghalaya, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura, Jharkhand,
Chattisgarh, Andaman (Union Territory) and Nicobar Islands (Union Territory). Jharkhand and
Chattisgarh are newly formed states, split from Bihar and Madhya Pradesh, respectively, in
January 2001.
• The region, with a population of 218 million, is largely inaccessible because most states are
almost separated from the mainland.
• This region is the least developed of the four, with the largest gap (in percentage terms)
between rural and urban populations, low per capita income, poor infrastructure and little
industrial activity.
• However, East and Northeast India is the major national source of mineral resources like coal,
iron and bauxite.
South India
• Major states in the South region include Tamil Nadu (Madras), Andhra Pradesh, Kerala,
Karnataka, Pondicherry (Union Territory) and Lakshwadeep (Union Territory).
Euromonitor Page 1
• This region, with a population of 197 million, is strong in agriculture and industry.
• The states of Karnataka and Andhra Pradesh pioneered the IT revolution in India. Bangalore,
the capital of Karnataka, and Hyderabad, the capital of Andhra Pradesh, are the Indian
equivalents of the US's Silicon Valley.
• The two union territories are relatively small, and do not contribute much to the region's
output.
• All the states of this region have coastal areas and the coastal transport is well developed. This
region also has a very good land transportation infrastructure.
West India
• Major states in the West region include Maharashtra (Mumbai), Gujarat, Madhya Pradesh,
Goa, Dadra & Nagar Haveli (Union Territory) and Daman & Diu (Union Territory).
• The total population of this region is 188 million.
• West India is much more developed than the other three regions, and per capita income levels
are therefore comparatively high.
• Goa and the two Union Territories are small and do not contribute much to the output of the
region, although the former is a popular tourist destination.
• The hub of industrial activity in India is in Maharashtra and Gujarat, and these two states also
attract the highest number of foreign direct investment proposals every year. This region also
includes Mumbai, the financial capital of India, and an important centre for industrial activity.
Market Size: Beer – Off-trade vs On-trade Volume & Value

Off-trade sales dominate as pub culture starts evolving
Off-trade sales are expected to account for nearly 80% of overall volume sales in 2003, with the
remainder accounted for by on-trade sales through restaurants, pubs and bars. The number of on-
trade establishments varies significantly across the various states. In Tamil Nadu, for example,
Bangalore (which is nicknamed the pub city because of the presence of a large number of pubs) and
Hyderabad are the only two cities that boast a significant number of bars and pubs.
In India, only metropolitan cities like Mumbai, Delhi, Calcutta and Chennai have the pub culture
since the urban people are more affluent and forthcoming in accepting Western culture. The vast
majority of the beer drinking population still prefer to drink at home or privately within their own
social circle. This is unlike the more developed countries such as Hong Kong and Singapore where
on-trade sales are almost 40% of total volume consumption in any given year.
Consumption of beer through the on-trade channel patterns that of the off-trade, with a large
majority of volume sales generated through the 650ml glass bottle. Kegs are rarely found via the
on-trade channel, and if at all, these are 30 litres in size. The canned format, typically those of the
international brands such as Beck's and Heineken, are more commonly located via the on-trade
channel as compared to the specialist stores.
Gap expected to narrow over the forecast period
In 2004-2008, the gap between the off-trade and on-trade is expected to fall, and the number of on-
trade channels are expected to grow faster than off-trade outlets. This will be mainly on account of
the expected increase in the number of beer bars and beer parlours throughout the country.
Westernisation influences are slowly making an impact with the associated rise in pub culture in the
metropolitan cities. Consumers regarding beer as a beverage rather than alcoholic drink is also the
major factor behind market growth. Drinking while socialising is also increasingly perceived as
having a status-enhancing image when in pubs, restaurants and hotels. This trend is expected to
Euromonitor Page 2
especially evolve in the urban cities such as Mumbai, New Delhi and Bangalore, along with
Chennai.
The South and West of India are the two key regions for beer consumption through the on-trade
channel. The IT hub in the South and the large number of affluent families in the West, are the
major impetus to consumption in restaurants and pubs in these two regions. Late working results in
frequent eating and drinking out after work. A large percentage of the younger population have also
taken to drinking in pubs with friends, having acquired the habit through overseas education, media
influences and globalisation.
TABLE 1 VOLUME OFF-TRADE VS ON-TRADE SALES OF BEER 1998-2003
Million litres
1998 1999 2000 2001 2002 2003
Off-trade 399.2 427.3 457.2 489.0 530.7 569.8

On-trade 89.9 100.2 111.2 122.0 143.1 156.0
BEER 489.1 527.5 568.3 611.0 673.8 725.8

Source: Company research, Store checks, Trade interviews, Euromonitor estimates
TABLE 2 VALUE OFF-TRADE VS ON-TRADE SALES OF BEER 1998-2003
Rs million, current prices

1998 1999 2000 2001 2002 2003
Off-trade 18,689.1 21,293.5 23,902.5 26,473.9 29,503.7 32,326.2

On-trade 12,870.2 15,022.5 17,366.9 19,827.7 24,222.0 27,133.9
BEER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Market Size: Beer by Sector – Off-Trade & On-Trade Volume & Value
2003 headlines
• Cricket World Cup boosts beer sales in the first half of year
• Patterning the soft drinks model, beer pint revolution drives volume growth
• Beer landscape changes with SWC–SABMiller merger
• United Breweries continues to dominate along with Shaw Wallace
• Competition in strong beer – Knock Out tries a new look
Similar to Soccer World Cup, Cricket World Cup boosts 2003 beer sales
Beer sales in India are estimated to reach over 725 million litres in 2003, registering a volume
increase of nearly 8%. The first half of the year saw increase in volume sales stem mainly from the
Cricket World Cup, a highly popular sport in the country. Similar to the Soccer World Cup in June
2002, on-trade channels such as bars and restaurants also stimulated beer sales with various events.
In most of the cases, it would involve recreating the bar ambience and giving it a World Cup theme
with posters of cricket stars and cards detailing the match fixtures. The live action could be seen on
the TV sets or on big screens, with innovative cocktails having names that match the spirit of the
game.
Euromonitor Page 3
Current value sales surged ahead of volume sales over the review period due to a combination of
factors. In addition to high taxes, rising costs of production due to production inefficiencies,
inflation and the rise in on-trade consumption due to the expanding pub culture contributed
significantly to price increases.
The Indian market beer market can be distinctly classified into strong beer and mild beer where
strong beers have an alcohol content above 6%, while mild beers have alcoholic content below 5%.
The share of strong beer consumption in the country, according to Mr Nirmal Rajini from UB
Group, Chennai, is 68% of total volume sales while the mild variant accounts for the rest.
Demand for lager only
The consumption of beer in India is limited to lager, with all other beer variants expected to register
negligible or no sales in 2003. Dark beer, stout and low-alcoholic beers have either no demand or
serve a very limited niche market, consisting of tourists and new consumers, and sales of these are
generated mainly through the on-trade channel. Draught beer is, similarly, available only in selected
on-trade premises, and mainly in the southern and northern regions of the country.
United Distillers & Vintners India Ltd has no plans to launch Guinness Stout, the world's leading
premium stout beer into India, after its worldwide merger with Guinness in December 1997. The
possibility of introducing the brand was ruled out due to negligible demand for stout. In fact, it was
the poor demand for stout that led to United Breweries phasing out its London Stout almost a
decade ago.
Patterning the soft drinks model, beer pint revolution drives volume growth
Targeted at the fast expanding young college age group, 325ml and 330ml beer pints are
increasingly popular throughout India, especially in traditional pub cities like Bangalore,
Hyderabad, Mumbai, amongst others. Trade sources reveal that even though profit margins would
be reduced by these cheaper pints, the increased consumption base would drive up volume growth.
UB Group, manufacturer of the popular Kingfisher brand of lager, was the first company in India to
focus on the 330ml pack size in 2001, when it introduced an innovative 330ml variant of one of its
oldest brands, UB Exports, in Bangalore priced at Rs17. This packaging size was later extended to
Kolkata, with the introduction of the Kalyani Black Label Pint. Following its successful launch in
Kolkata, Kingfisher Strong Pint was introduced in Hyderabad, which also experienced favourable
response. This forced its arch rival Shaw Wallace also to follow suit, with pint variants of its
popular beer brands such as Haywards 5000.
The rising popularity of the beer pint in urban cities and towns can be attributed to the globalisation
process, with consumers wanting to have a quick beer. The price of a pint is also more affordable
compared to the standard size of 650ml. For example, the price of a 650ml Kingfisher brand is
Rs32 where as the price of a pint size 330ml Kingfisher is only Rs17.
Hence, the success of this beer variant in terms of pack size also gave a shot in the arm to the
flagging sales of mild beer, in comparison to the stronger beer brands, which since the 1990s, are
much more popular than mild variants. However, whether the total volume consumption of the pint
size will eat into the 650ml bottle is speculative as the pint size is yet to be launched all over the
country.
Beer landscape changes with SWC–SAB merger
After more than a year of negotiations, SABMiller Plc, the world's leading beer company, will take
management control of the Manu Chhabria family-controlled Shaw Wallace & Co (SWC). The two
parties combined their beer operations in India in the second quarter of 2003 in the largest merger-
cum-acquisition within beer. The merged entity, still known as Shaw Wallace, will hold the
combined brewing interests of both parties even as the operational management control will rest
with SABMiller. The acquisition, which was signed in Dubai, is valued at around US$132 million.
Euromonitor Page 4
This 50:50 joint venture is expected to completely change the dynamics of domestic beer, which,
till now, has been dominated by UB Group. According to industry figures, of the estimated sales of
beer of 674 million litres in 2002, UB Group's beer business accounted for about 39% of volume
sales and SWC for almost 32%.
While comparing production capacities of the two leading players, UB Group (including United
Breweries and Millennium Alcobev Ltd) has a production capacity of around 351 million litres
(both owned and contracted), while SWC has a beer capacity of 215 million litres. After the
formation of SWC-SABMiller joint venture, combined capacity has increased to 257 million litres.
In order to further strengthen its position, SWC is setting up four new breweries, to serve the
Kerala, Madhya Pradesh, West Bengal and Goa markets. With this capacity expansion, SWC will
have a total beer manufacturing capacity of 350 million litres by the end of the fiscal year ending
March 2004. At the same time, SABMiller has added four breweries to the kitty located in
Karnataka and Rajasthan, where SWC did not have a brewery previously.
According to industry watchers, SWC's joint venture with SABMiller will propel its growth
significantly. While the company has been dominant within strong beer with Haywards 5000, it is
United Breweries' Kingfisher that leads overall beer sales. Furthermore, SABMiller will pave the
way and provide the economic budget for a stronger distribution channel to be built up for
Haywards, often criticised by industry experts for having failed to match the distribution might of
Kingfisher. The new entity will also benefit from the international labels from SABMiller's stable,
which are expected to be launched in the Indian market.
United Breweries responds with new subsidiary
UB Group expects intense competition from its rival Shaw Wallace, after its merger with
SABMiller along with the reported interest of other global beer companies in the Indian market as
the global arena starts to mature. UB Group has hence realigned its market presence in the low-
priced segment of the Indian-made foreign liquor (IMFL) market through the introduction of a new
company, Phipson Distilleries Ltd, in July 2002.
Phipson will provide the umbrella for the group's low-end (third line) brands and their variants
across three spirits – whisky, rum and brandy. The portfolio may also include 20 brands, some
existing as well as newly introduced labels. It includes brands such as Majestic, Win, Tiger and
President's Pride, which are priced below Rs140 per 750ml bottle. The name Phipson is derived
from an earlier entity, Phipson & Co Ltd, which was merged years ago with McDowell & Co, the
flagship spirits entity of UB Group. The latest development followed UB Group's decision to be a
complete alcohol beverages behemoth, covering all price segments.
Industry sources reveal that the aggressive investments in expansion and acquisitions are being
made with an eye on the future market growth potential. With an estimated half a billion of the
Indian population in India today under 21 years of age, there is tremendous growth potential that
the company is eyeing. Urbanisation, changing lifestyles, exposure to international culture and
Western influences will see more youths in the country being included under the consumption fold.
United Breweries also plans to extend its well-known spirits brands, McDowell and Bagpiper, to
beer, so as to leverage the brands' strong equity and recall.
SABMiller uncorks its superior Castle Lager beer
SAB Miller India launched its international flagship brand Castle Lager in India in October 2002.
Castle Lager is being brewed at Mysore Breweries Ltd, which was acquired by the company in late
2001, and is available in two pack sizes of 330ml and 650ml. The brand is sold in an attractive
amber coloured bottle, with the famous red and gold label, and is priced at Rs48 for 650ml.
Euromonitor Page 5
The company is importing especially cultured yeast that enhances the quality of the brand. The
shelf life of the product is one year as compared to six months of other beer brands. Bangalore,
New Delhi, Mumbai and Goa are expected to be major markets for Castle Lager, and company
sources expect the brand to compete against United Breweries's Kingfisher Premium Lager.
Knock Out tries a new look to gain shares
In India, the consumer's preference towards strong beer continues unabated. Strong beer
consumption accounted for 68% of the total volume sales in 2002 and is well above 75% in the
major beer guzzling states such as Tamil Nadu and Andhra Pradesh. For instance, trade insiders
estimate the share of strong beer in Tamil Nadu to be between 78% and 80%. According to industry
experts, strong beer which has an alcohol content of more than 6% is much preferred to mild beer
which has an alcohol content of less than 5% since the general aim is to get more kick per buck –
more value for money.
That said, this scenario also limits scope for increased strong beer consumption in many markets
such as Karnataka since it is approaching saturation point. The notable exceptions are markets such
as Mumbai, Delhi, Goa and Kerala as they are the most preferred tourist spots.
South African Breweries India Ltd (SAB) changed its name to SABMiller India Ltd in November
2002. The change follows SAB's change of name worldwide from South African Breweries Plc to
SABMiller Plc in the wake of its acquisition of the Miller Brewing Co, earlier in the first half of
2002. Knock Out brand was first bought over by SABMiller India Ltd when it acquired Mysore
Breweries Ltd in a Rs1.1 billion deal in late 2001. Knock Out is a strong brand built over 15 years
having had marketing investments to the tune of Rs1 billion over the period.
The company intends to focus on this brand and make it a national brand. A high-pitched television
advertisement "Knock Out Challenge" was kicked off for this purpose in May 2002. Knock Out
was rolled out in new markets like Rajasthan, Uttar Pradesh, Northeast and Jharkhand. Knock Out
was also reintroduced in Mumbai in mid 2002 at a price of Rs50-60 per 650ml.
SABMiller India unveiled a new-look Knock Out. The new communication line, "Jeene ka strong
andaaz" (Live a strong lifestyle), is aimed at bringing fresh drinkers into the brand's fold. The new
look involved refinement of the lager's blend, adding extra smoothness and reduced alcohol smell
usually associated with strong beer as well as the toning up of its brand image and packaging.
Knock Out's re-emergence on the national scene is crucial for SABMiller.
The company's first India-specific label, Three Lions, has not met expectations while its
international premium flagship brand, Castle Lager, is also making slow inroads in the Indian
market. Castle Lager first hit New Delhi and later entered Mumbai, the rest of Maharashtra, Goa,
Daman, Diu and Uttar Pradesh. The refinement in brand positioning has placed emphasis on
"drinkability"' and the company is banking on the new look of Knock Out to garner sales from
younger consumers in urban centres.
All in all, excessive taxes stifle consumer demand for beer
Despite the hot weather conditions found in India, per capita consumption of beer is very low in
comparison to global levels. The 0.7 litres per person consumption in India per year is a far cry
from the 18 litres in China. A strong preference for spirits tends to restrict sales of beer, which
typically is the preferred alcoholic beverage in most other countries.
Besides cultural factors and low disposable incomes obstructing beer growth, excessive taxes
applied on beer products have also proved instrumental in stifling the brewing industry's growth by
encouraging consumption of cheap hard liquor in almost all states.
Unlike the international market, where beer is considered a common beverage and is marketed in
department stores and supermarkets, in India it is treated in the same way as hard liquor and attracts
Euromonitor Page 6
the same duties as drinks with higher alcohol content. As a result, beer in India is taxed according
to volume and not alcoholic content.
This thus produces a trend in which consumers tend to prefer cheap hard liquor to expensive, low-
alcoholic content beers. For instance, a bottle of rum costs around the same as four beers, while a
bottle of Indian wine is more expensive than two bottles of rum. Beer is skewed towards strong
beer with an alcohol content of over 10%. In 2001, 60% of total beer sales were accounted for by
strong lager.
Some 65-70% of total alcohol consumption in the world is in the form of beer. Due to the
combination of factors mentioned above, beer accounts for a far smaller proportion of total alcohol
consumption in India. Beer is estimated to account for around 10% of total alcohol consumption in
value terms in 2003.
TABLE 3 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY SECTOR 1998-2003
Million litres
1998 1999 2000 2001 2002 2003
Lager 489.1 527.5 568.3 611.0 673.8 725.8

– Premium 359.5 388.0 418.1 449.9 501.0 540.4
– Standard 129.5 139.4 150.2 161.0 172.8 185.4
– Economy – – – – – –
Dark beer – – – – – –
Stout – – – – – –
Non-alcohol/Low-alcohol – – – – – –
beer
BEER 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 4 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY SECTOR 1998-2003

1998 1999 2000 2001 2002 2003
Lager 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

– Premium 24,283.0 28,044.5 31,898.4 35,826.3 41,943.8 46,533.2
– Standard 7,276.2 8,271.4 9,371.0 10,475.3 11,782.0 12,926.9
– Economy – – – – – –
Dark beer – – – – – –
Stout – – – – – –
beer
BEER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Market Size: Beer by Region – Off-Trade & On-Trade Volume & Value
Affluence reigns as West & South account for majority of beer sales
As is the case with the entire alcoholic drinks market in India, the West and South regions are the
key consumers of beer, expected to account for around 527 million litres of beer between them in
2003, equal to 72% of the total beer volume sales in the country. Maharashtra in the West and
Andhra Pradesh in the South are the two largest beer consuming states in the country, in that order.
Euromonitor Page 7
Although Maharashtra has stagnated somewhat in terms of beer consumption, the exceptional
growth in Madhya Pradesh, Rajasthan and Tamil Nadu has more than compensated for this. A
higher level of consumer affluence, sophistication along with purchasing power is widely cited as
the key growth drivers in these regions.
Sales of beer in West India are estimated at 250 million litres in 2003, with Mumbai alone
accounting for almost half of total volume consumption. Other states such as Pune, Goa and Jaipur
are also major consumers of beer. While Kingfisher and Haywards continue to be the most popular
brands, imported premium brands such as Cobra and Beck's experience the highest consumer
response in West India as compared to any other region.
South India is home to the highest excise duties on alcoholic drinks in the country. Ironically, the
region also boasts of the second largest number of breweries in India as brewers look to avoid the
high import and excise taxes levied on the movement of alcoholic drinks in and out of any state.
Regardless, the IT revolution in this region, with its large expatriate population and a rapidly
growing pub culture, presents a large potential consumer base, especially for the on-trade channels.
The pub culture is flourishing especially in Andhra Pradesh, Karnataka and Tamil Nadu.
There are three main target consumer groups in the country. The first is the urban youth 18-30 years
of age – fresh guzzlers who perceive beer drinking as fun and refreshing. The second is a slightly
older age urban group 30+ years that have brand preference and do not mind spending a little more
for premium brands. The third is the semi-urban group aged between 25 and 35, for whom drinking
beer (usually the strong variant) is a style statement and sometimes consumed as a substitute for
spirits.
Beer drinkers in both regions are mostly from the first two groups who like to drink outside home
even though on-trade consumption is expensive. For instance, a 650ml bottle of Foster's costs Rs50
in the specialist shops and Rs110 through the on-trade channels. The pattern is largely influenced
by consumer preference in Mumbai especially, which is very urban in lifestyle choices which
include a prestigious and sophisticated style of living. A large section of consumers view beer as a
beverage rather than alcoholic drink, which has led to a spurt in consumption as is the case with any
soft drink during the hot summer months.
Spirits preferred in North India
Despite its large regional population base, the North is not the largest regional market for beer by
some distance. In fact, per capita consumption in this region lags behind the West and South, and is
higher only than the East and Northeast. On a national level comparison, per capita consumption of
beer in the West, South, North and East and Northeast is expected to reach 1.16 litres, 1.23 litres,
0.18 litres and 0.49 litres respectively in 2003. The fundamental reason for low levels of beer
consumption in the North is the overwhelming preference for spirits. Uncompetitive pricing of beer
products vis-à-vis spirits has significantly contributed to this consumption pattern.
Sales of beer in this region in 2003 are estimated at 147 million litres and Rs11.5 billion. Sales of
beer are entirely restricted to lager, unlike in the South and West, where there is marginal though
negligible consumer demand for low-alcohol and dark beer. Nevertheless, national sales of stout
and dark beer remain at negligible levels as consumers typically purchase these products through
the grey market, due to the much lower prices in this channel.
New Delhi has applied a system that controls the number and quality of brands that can be found on
the state's store shelves, whereby stipulations of minimum sales have to be met. Consequently,
brands with poor or unproven track records are removed from the liquor store shelves in the region,
leaving only the major leading brands.
For example, before gaining a licence to be retailed in the specialist stores, mild beer brands have to
meet an annual sales target of 80,000 cases, while strong beer brands have to retail some 300,000
cases countrywide. International brands such as Foster's face even higher standards, as they have to
achieve sales of 3.9 million litres (500,000 cases) worldwide.
Euromonitor Page 8
This largely explains the rationale behind Foster's early presence in the Southern markets of
Maharashtra, Tamil Nadu and Andhra Pradesh, and its greater presence in East and Northeast India.
The brand was launched in New Delhi only in February 2001, having been available in several
areas of the country, particularly the key metropolitan areas, since 1998.
East & Northeast India continues to be smallest region
With volume sales of just 51 million litres in 2003, East and Northeast India constitutes the smallest
region for beer in India. This region houses the least economically wealthy households in the
country with heavy dependence on mining and agriculture. As such, the alcohol consuming Indians
tend to purchase cheap, country liquor, as this boasts very high alcohol content at tremendously low
prices.
The state governments in this region also depend heavily on beer for revenue collection, adding to
the woes of manufacturers with high excise rates. A prolonged summer in 2003 acted as a growth
driver in the year. Unlike previous years the surge in demand was not limited to April to June alone.
Due to late monsoons July had also experienced an increased in demand. The introduction of pint
bottles by both United Breweries and Shaw Wallace also added volumes with their lower price
points which addressed the affordability concern.
Demand for beer in this region faces the strongest threat from country liquor in the rural areas as
licence rules and regulations lead to most rural outlets unable to sell beer or spirits and only country
liquor is stocked. Most retailers in the rural areas do not want to go through the formalities to obtain
a licence to sell branded beer brands as the process to obtain such licences is slow and very
expensive. Hence most retailers in the rural areas prefer to sell country liquor which has a
significantly higher demand than branded beer due to the substantial price differentials.
The target consumer for beer in this region is typically younger people in the 18-30 age group, as
the older generation tend to switch to spirits as they consider it as a status symbol and as the drink
has a higher alcohol content, comparable to what they are used to from drinking country liquor.
Strong beer with an alcohol content of around 8% is more popular in the region. Compared to the
mild beer with less than 5% alcohol, the stronger beer is in higher demand due to its "higher kick
per rupee" offering to the consumers.
TABLE 5 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY REGION 1998-2003
Million litres
1998 1999 2000 2001 2002 2003
South India 191.9 204.9 218.7 235.2 257.5 276.8

West India 166.7 182.3 198.7 213.8 233.7 250.7
North India 97.2 104.2 112.1 120.1 135.8 147.5
East/Northeast India 33.3 36.2 39.0 41.9 46.7 50.8
INDIA 489.1 527.5 568.3 611.0 673.8 725.8

Source: Trade press (The Hindu Business Line, The Economic Times, India Financial Express, Express
Hotelier & Caterer, just-drinks.com, The Times of India, www.indiainfoline.com), Business
Standard, BeverAsia, Wine & Spirit International, Drinks International), Company research, Store
checks, Trade interviews, Euromonitor estimates
Euromonitor Page 9
TABLE 6 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY REGION 1998-2003

1998 1999 2000 2001 2002 2003
South India 11,945.9 13,811.7 15,744.5 17,693.1 20,220.8 22,373.1

West India 11,177.7 12,892.4 14,709.1 16,560.3 19,369.4 21,391.9
North India 6,092.3 6,944.8 7,816.1 8,705.4 10,321.8 11,451.6
East/Northeast India 2,343.3 2,667.1 2,999.7 3,342.8 3,813.7 4,243.5
INDIA 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Market Size: Beer by Packaging Format – Off-Trade Volume

Glass bottles most popular as it allows for reuse & recycling
Throughout India, beer is typically packaged in 650ml glass bottles as this facilitates the reuse and
recycling of bottles, which aids cost cutting. New bottles attract a 20% sales tax and companies use
the recycled bottle route to save costs and control prices. Popular local brands such as Kingfisher,
Haywards and Knock Out have traditionally found success in glass bottles.
To promote and facilitate the continued purchasing of beer in glass bottles, consumers have the
option of drinking the beer product on the spot, and are charged some Rs2-3 less for each returned
bottle. Also, should consumers bring back empty beer bottles to retail outlets, they are also entitled
to a refund covering the cost of the bottle. This is a method widely adopted by all leading players,
including United Breweries. Bottles marked for recycling are typically picked up by the
manufacturers themselves when they send the next truckload of drinks to the retail stores.
Within glass bottles, the introduction of the pint size (330ml) was a new innovation of 2002 and
proved a hugely successful move. Beer manufacturers see carbonated drinks as competition as both
aim to quench the thirst in hot summer months.
The introduction of pints has been instrumental in tackling the price advantage of carbonated
drinks. In an innovative move, UB offered Rs3 back to the consumer upon return of empty pint
bottles. Thus a 330ml bottle costs Rs19 (Rs16 + Rs3 returnable with empty bottle) while the 650ml
bottle (non-returnable bottle, no refund for the empty bottle) costs Rs39. So the consumer saved
Rs7 in purchasing a pint bottle. The innovation in packaging was a major success and pumped up
volume sales and added new consumers to both Shaw Wallace and UB.
In 2003, over 98% total beer volumes are consumed in glass bottles although this trend is slowing
giving way to the canned format due to the emergence of the international brands such as Heineken
etc. Cans have rather limited popularity amongst the leading domestic brands such as Kingfisher
and Haywards as the format does not so readily allow recycling. That said, over 2002-2003, even
these domestic brands are readily made available in canned format, to compete on a par and to be
positioned similarly to the imported brands.
Debate on reuse & recycling of glass bottles reaches new heights
Hygiene, however, is threatening to become a major issue for the alcoholic drinks market since the
treatment of used bottles is extremely basic and is often done with dirty water. The glass
manufacturing industry voiced its concern over the widespread reuse of glass bottles for alcoholic
beverages such as beer and spirits. They are convinced that breweries and distilleries in India are
not equipped with the appropriate cleaning facilities to sanitise the used bottles and are pushing for
the central government to enforce a blanket ban on the recycling of bottles.
Euromonitor Page 10
There are industry views that this issue was brought up largely because the glass bottle industry is
suffering because the alcoholic drinks and soft drinks industries are making substantial savings on
excise duties by reusing bottles.
The Confederation of Indian Alcoholic Beverages has defended the reuse of bottles as this is very
much a worldwide practice, and claims that Indian manufacturing companies have adequate
cleaning systems. Furthermore, the Confederation suggested that reused bottles for alcoholic drinks
are less likely to be contaminated than their soft drinks equivalents because the high alcohol content
is not conducive to bacterial growth.
TABLE 7 VOLUME OFF-TRADE SALES OF BEER BY PACKAGING FORMAT: %

ANALYSIS 1998/2003
% off-trade volume
1998 2003
Glass 100.0 98.0

Can – 2.0
Plastic – –
Keg – –
Others – –
TOTAL 100.0 100.0
Source: Trade associations (The Confederation of Indian Alcoholic Beverages), Trade press (The Hindu
Business Line, The Economic Times, India Financial Express, Express Hotelier & Caterer, just-
drinks.com, The Times of India, www.indiainfoline.com), Business Standard, BeverAsia, Wine &
Spirit International, Drinks International), Company research, Store checks, Trade interviews,
Euromonitor estimates
Sector Size: Lager by Domestic/Imported Split – Off-Trade & On-Trade

Volume & Value
Indian brands continue to excel
As a direct consequence of the high customs duties imposed on imported beer brands, domestic
companies such as UB Group and Shaw Wallace Breweries monopolise sales of beer in India. This
consumption trend applies to both the on- and off-trade channels. Both companies have established
nationwide networks through aggressive marketing initiatives, including high-profile advertising
strategies which focus on their leading brands.
More importantly, to avoid attracting the various taxes that are levied on the movement of products
from one state to another, both companies have invested heavily in procuring existing breweries as
well as establishing new manufacturing plants in numerous states. As such, the strategy has helped
to not only keep down the final product prices of their popular brands such as Haywards and
Kingfisher but also at the same time, stamp out any potential threat from international big names
such as Foster's and Beck's.
while imported brands suffer from high duties
Since the removal of quantity restrictions in 2001 following India's entry into the World Trade
Organisation (WTO) as well as the subsequent reduction in import duties as per its commitment to
the WTO, a host of internationally popular beer brands are arriving on Indian shores. More
importantly, as the global market for beer appears to reach penetration peaks, these global brewers
are keen to quickly establish themselves in the emerging markets such as China and India, whose
large population bases offer very attractive growth prospects.
That said, imported brands such as Corona, Heineken, Beck's and Carlsberg account for a very
small fraction of total beer volume consumption, and are found mainly in the on-trade channel,
Euromonitor Page 11
though a few of them can be located on the retail shelves of leading metropolitan cities like
Mumbai and New Delhi. Imported products are usually re-exported from free-trading nations such
as Thailand, Singapore and Malaysia, and are popular with visiting tourists who are familiar with
these brands.
The so-far lack of success by these international brands stems from the fact that imported beer
brands continue to attract high customs duties of 166% in India as compared to the less than 70% in
China. This significantly increases the final product prices of imported beer brands and puts them
out of reach of the average Indian consumer.
Furthermore, as international beer brands consist mainly of mild variants, which are generally less
popular in India than those with higher alcohol content, it is not surprising that these imported
brands have yet to establish themselves in the Indian market.
TABLE 8 VOLUME OFF-TRADE & ON-TRADE SALES OF LAGER BY

DOMESTIC/IMPORTED SPLIT 1998-2003
Million litres
1998 1999 2000 2001 2002 2003
Domestic 489.1 527.5 568.3 611.0 663.9 715.1

Imported – – – – 9.9 10.7
LAGER 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 9 VALUE OFF-TRADE & ON-TRADE SALES OF LAGER BY

DOMESTIC/IMPORTED SPLIT 1998-2003

1998 1999 2000 2001 2002 2003
Domestic 31,559.3 36,316.0 41,269.4 46,301.5 52,115.2 57,732.7

Imported – – – – 1,610.5 1,727.4
LAGER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

New Product Developments: Beer

Castle Lager launched in India
SABMiller India Ltd, a subsidiary of SABMiller Plc, launched its international flagship beer brand,
Castle Lager, in Bangalore in October 2002. Castle Lager is being brewed domestically at Mysore
Breweries Ltd, which was acquired by SABMiller in 2001 and is available in two pack sizes of
650ml and 330ml.
Castle Lager is innovatively packaged in an attractive amber coloured bottle with the famous red
and gold label, and is priced at Rs48 for 650ml. The brand is essentially targeted at beer enthusiasts
across the 25-40 age group and "embraces the spirit of friendship and camaraderie". More recently,
the brand was further launched in Hyderabad in May 2003.
Euromonitor Page 12
However, with other beer brands like Kingfisher, Haywards 5000 and Knock Out already well
entrenched, this new launch has met with a lukewarm response.
More strong beers for South India
With the preference for strong beers in India, Millennium Alcobev Ltd (MABL), a division of UB
Group, has announced the launch of its new strong beer, Zingaro Premium Strong Beer, in the
Kerala market. Priced at Rs40, the new product is available in bars across the state and in the retail
outlets of Kerala State Beverages Corporation. The company is also planning to introduce 330ml
bottles of the brand shortly.
According to company officials, beer consumption in Kerala has increased considerably over the
survey period, largely due to the promotional initiative undertaken by the Government on the
tourism front. On the same note, between March and August 2002, UB Group launched Kalyani
Black Label, London No 1 Strong and Kingfisher Super Strong Premium Beer. The latter launch is
in line with UB's focus on strong beer and is priced at Rs58 for a 650ml pack size and comes in an
amber bottle with a unique red coloured foil and distinct logo. These launches are aimed to extend
brand presence into strong beer which is more popular than mild beer.
& East & Northeast with the launch of Thunderbolt 10000
Not to be outdone by its national counterparts, Mount Shivalik Breweries launched its super strong
beer, Thunderbolt 10000, in East and Northeast India in late 2002. Although the launch was
extremely successful, the company has decided against a national launch as company sources
indicated that they are not confident that the brand will excel vis-à-vis other strong beer brands such
as Haywards and Knock Out.
With Mount Shivalik Breweries present only in the North and East and Northeast region, the
movement of Thunderbolt 10000 into the other states will attract high import tariffs and
significantly drive up the final product price, rendering the brand uncompetitive against the other
national big names.
Other launches by the company included Thunder 1000 and Stroh's. The company rolled out 330ml
bottles of the beer brand Stroh's across off-trade outlets in markets such as Punjab, West Bengal,
Uttar Pradesh and Delhi, amongst others. Stroh's was previously offered only in 650ml bottles, and
the 330ml size introduction is to give the brand better penetration amongst the lifestyle-conscious
younger generation, and also to strengthen brand recall in the on-trade channel.
Mount Shivalik sources reveal that there are no plans to enter the Southern and Western regions,
since these are marked by the presence of international rivals such as Foster's. The company is
looking to focus on consolidating its presence in existing markets, given the numerous acquisitions
of small breweries by the bigger guns in 2001 and 2002. Mount Shivalik prides itself on being one
of the few players that has successfully maintained growth amidst this onslaught.
It is notable that Shaw Wallace, the leader in strong beer in East and Northeast India, also has two
variants of strong beer, Haywards 5000 and Haywards 10000. Thunderbolt 10000 has been able to
perform above expectations despite the presence of Haywards in the region, as the latter is very
premium vis-à-vis the former. East and Northeast consumers are extremely price conscious as this
is also the least economically and industrially developed region in the country.
Introduction of pint bottles
Another new innovation of 2002 was the introduction of pint bottles (330ml). The key purpose was
to offer a price advantage to consumers by lower the price point. After the success of Kalyani Black
Label Pint in 2002, UB extended the pint size to its flagship Kingfisher brand in late 2002.
The pint bottles also helped the beer manufacturers to successfully tackle indirect competition from
aerated soft drinks (carbonates like Pepsi and Coca-Cola) as well as to bring in new consumers
Euromonitor Page 13
from country liquor and arrack (local spirits from the unorganised channel). In its zeal to put across
the pricing superiority of the pint packaging, UB even launched a "Cold Drinks Keno?" (Why have
cold drinks?) campaign, promoting the low price of its pint packaging.
International brands foray into West India
With the gradual increase in consumer consumption of lager, West India witnessed many launches
and relaunches over 2002-2003. New launches revolved mainly around international brands, which
looked to tap the emerging beer consumption in the region. Cobra Lager, Heineken, Corona,
Budweiser and Beck's, amongst others, are the new international labels that are being imported
entirely into the country. Castle Lager is being brewed domestically by SABMiller India at its
brewery in Rajasthan.
Cobra Lager, which is imported from the UK, attracts a duty of around 400%, and a 330ml bottle
can cost anywhere between Rs75 to Rs225, depending on where it is available. The brand has been
launched in New Delhi, Mumbai, Goa, Pune, Kolkata and Hyderabad. Cobra Lager is marketed as
an extra smooth lager, which compliments the Indian cuisine and is healthier due to its lower
alcohol content.
Sporting the image of a snake on its yellow label, Cobra relies heavily on bar promotions rather
than surrogate advertising widely adopted by the leading national brands such as Kingfisher. Plans
are on the anvil to begin manufacturing in India by acquiring existing brewing capacity to enable
the lowering of product prices.
Beck's, on the other hand, employed a very low profile brand launch. The brand is being marketed
and distributed by Radico International, a joint venture between Radico-Khaitan Ltd and Interbrew
NV SA. Beck's is available mostly in cans and is very premium at Rs125 for 330ml. The target
consumer group for the brand is the 30+ age group, which can and are willing to pay more.
Castle Lager, SABMiller's international brand, was launched in the West region in April 2002. The
mild beer is priced at Rs48 for 650ml. As a part of promotions, the company plans to associate the
brand with cricket as this is India's national passion. It is the only mild beer to have been launched
in 2002 and is targeted at the 25-40 age group.
The other prominent national roll-out was Knock Out by SABMiller India. This standard lager beer
is priced at Rs48 for a 650ml bottle. In order to position Knock Out (which it acquired from Mysore
Breweries in October 2001) as a national beer brand, it kicked off a high-pitched television
advertisement "Knock Out Challenge" in May 2002. The advertisement for the brand highlights
those moments when a person demonstrates inner resolve or strength of character to stand up to
enormous challenges. In this situation the person moves beyond raw physicality to reflect more
comprehensive character, inner as well as external strength.
SUMMARY 1 BEER NEW PRODUCT DEVELOPMENTS 2002-2003

Brand name Company Product type Launch date Region
Royal Challenge Shaw Wallace & Domestic May 2003 All India
Premium Lager Co Ltd premium lager
Thunderbolt Mount Shivalik Domestic December 2002 East
10000 Breweries Ltd standard lager
Bitburger Bitburger Premium December 2002 West
Brauerei Th. imported lager
Simon GmbH
Budweiser Anheuser-Busch Premium December 2002 West
Cos. Inc imported lager
Zingaro Premium Millennium Domestic October 2002 South
Strong Beer Alcobev Ltd standard lager
Euromonitor Page 14
Orangeboom Interbrew NV SA Premium October 2002 West

imported lager
Castle Lager SABMiller India Domestic October 2002 South
Beer Ltd premium lager and later
launched
Hyderabad in
May 2003.
Earlier, brand
was launched in
West India in
April 2002.
Corona Grupo Modelo Premium September 2002 West
SA de CV imported lager
Erdinger Champ Erdinger Premium September 2002 West
Privatbrauerei imported lager
Weissbrau
Heineken Heineken NV Premium September 2002 West
imported lager
Kingfisher Super BrewCo Ltd Domestic August 2002 South
Strong Premium premium lager –
introduction of
330ml pint bottles
Beck's Interbrew NV SA Premium May/June 2002 West
imported lager
Kalyani Black United Breweries Premium April 2002 East
Label Ltd domestic strong
lager
London No 1 United Breweries Domestic strong March 2002 East
Strong Ltd beer in 330ml
bottle
Stroh's Mount Shivalik Beer in 330ml March 2002 All India
Ltd glass bottles,
also available in
650ml bottles
Thunder 1000 Mount Shivalik Economy lager January 2002 East and
Ltd Northeast
checks, Trade interviews
Market Shares: Beer – National Brand Owner, Global Brand Owner &
Brand
Domestic companies dominate as international labels continue to pale in
comparison
United Breweries (UB) Group and Shaw Wallace & Co are the two traditional rivals within beer,
together accounting for 71% of total volume sales in India in 2002. BrewCo Ltd, a 100% subsidiary
of the UB Group, achieved a volume share of 30% in 2002 while Shaw Wallace achieved a volume
share of 32%. UB's other subsidiary, Millennium Alcobev, raked in volume sales with brands such
as Zingaro and Sandpiper. The flagship brand of UB Group, Kingfisher Premium Lager, had a
commanding 19% volume share in 2002 followed by Haywards 5000 from Shaw Wallace with a
17% volume share.
Euromonitor Page 15
South India continues to be Shaw Wallace's strong ground, with southern states like Tamil Nadu,
Andhra Pradesh and Kerala showing healthy growth. The company also made deep inroads into the
East and Northeast region, where it expanded its distribution network. The company's three star
performers, Haywards 5000, Haywards 2000 and Royal Challenge, continue to grow on the back of
strong promotional activities stimulating brand recall. Furthermore, these are strong beer brands
that experience considerable demand from the local population.
Since 2001, several international brewers have arrived on Indian shores. International brands like
Beck's from Interbrew NV SA, Bitburger from Bitburger Brauerei Th. Simon GmBH, Budweiser
from Anheuser-Busch Cos. Inc, Cobra from Cobra Beer Ltd and Heineken from Heineken NV,
amongst others have entered the key metropolitan cities like Mumbai and Chennai in 2003. That
said, these foreign beer brands have not had much success due to their premium pricing, late
entrance and limited distribution network.
As these brands are imported and subject to multi-layer duties and taxes, their end product prices
are generally 30-40% more expensive than local brands. These imported labels are available mainly
in cans and this has also worked against their popularity. Cans are perceived as a luxury packaging
and are therefore not widely consumed by the average Indian.
TABLE 10 VOLUME NATIONAL BRAND OWNER SHARES OF BEER 2001-2002
% volume
2001 2002
Shaw Wallace & Co Ltd 31.7 31.8

BrewCo Ltd 39.6 29.5
Millenium Alcobev Ltd – 9.6
Mohan Meakin Ltd 10.0 8.5
SABMiller India Ltd – 7.0
Foster's India Ltd 2.6 2.5
South African Breweries India Ltd 5.9 –
Mysore Breweries Ltd (MBL) – –
United Breweries Ltd – –
Others 10.2 10.9
TOTAL 100.0 100.0
TABLE 11 VOLUME GLOBAL BRAND OWNER SHARES OF BEER 2000-2002
% volume
2000 2001 2002
UB Group 40.1 39.6 39.2

Shaw Wallace & Co Ltd 29.0 31.7 31.8
Mohan Meakin Ltd 10.0 10.0 8.5
SABMiller Plc – – 7.0
Foster's Group Ltd 2.6 2.6 2.5
Mysore Breweries Ltd (MBL) 5.8 – –
South African Breweries Plc – 5.9 –
Others 12.5 10.2 10.9
TOTAL 100.0 100.0 100.0
Euromonitor Page 16
TABLE 12 VOLUME BRAND SHARES OF BEER 2000-2002
% volume
Brand Company 2000 2001 2002

Kingfisher Premium BrewCo Ltd – 18.7 19.3
Lager
Haywards 5000 Shaw Wallace & Co Ltd 13.7 16.4 17.4
Royal Challenge Premium Shaw Wallace & Co Ltd 11.9 11.9 11.1
Golden Eagle Mohan Meakin Ltd 9.5 9.5 8.0
Knock Out SABMiller India Ltd – – 7.0
Kingfisher Strong BrewCo Ltd – 5.5 5.5
Zingaro Millenium Alcobev Ltd – – 4.9
Sandpiper Millenium Alcobev Ltd – – 4.0
Kalyani Black Label BrewCo Ltd – 4.3 3.0
Foster's Foster's India Ltd 2.6 2.6 2.5
UB Premium Ice Beer BrewCo Ltd – 0.5 0.4
UB Export BrewCo Ltd – 0.5 0.3
UB Export United Breweries Ltd 0.5 – –
Knock Out South African Breweries – 5.9 –
India Ltd
Kalyani Black Label United Breweries Ltd 5.3 – –
UB Premium Ice Beer United Breweries Ltd 0.5 – –
Knock Out Mysore Breweries Ltd (MBL) 5.8 – –
Zingaro BrewCo Ltd – 4.6 –
Zingaro United Breweries Ltd 4.4 – –
Kingfisher Premium United Breweries Ltd 19.7 – –
Lager
Kingfisher Strong United Breweries Ltd 4.4 – –
Sandpiper BrewCo Ltd – 3.9 –
Sandpiper United Breweries Ltd 3.9 – –
Others 14.4 12.4 13.2
TOTAL 100.0 100.0 100.0

Market Shares: Beer by Region – Brand Ranking

West & South
While Kingfisher Premium and Haywards 5000 are the leading brands in premium domestic lager
in both regions, there is no clear leadership in standard lager. In the West, Knock Out and Foster's
are the preferred brands, while in the South, Mohan Meakin's Golden Eagle is also considerably
popular.
From its earlier national presence, Knock Out has been relegated to a regional brand and restricted
to three markets of Maharashtra, Andhra Pradesh and Karnataka as increasing inter-state levies
forced it out of non-viable territories. However, with the 2002 merger of SABMiller and Shaw
Wallace, the brand can expect to flourish over 2003-2005.
East & Northeast
Unlike the South and West, Shaw Wallace leads in the Eastern region, followed by United
Breweries and Mount Shivalik Breweries. UB remains a distant second in the region, although it
does better in Calcutta and West Bengal with its Kingfisher and Kalyani Black Label brands.
Euromonitor Page 17
The Northeast remains a weak spot for United Breweries due to logistical problems as its
distribution network here is not as strong as Shaw Wallace's. Orissa is a very big market for beer as
spirits have smaller consumer demand. Mount Shivalik's Thunderbolt is particularly strong in the
states of Bihar and Jharkhand. Other regional brands include Yuksom Breweries's Yeti Special and
Himalayan Blue in the state of Sikkim.
While a few imported brands such as Beck's and Heineken available in the region, the demand for
imported brands is significantly lower as compared to domestic brands.
Euromonitor Page 18
TABLE 13 BRAND RANKING OF BEER BY REGION 2002
Brand (Company) S W E&NE N
Black Knight Super

Strong Deluxe
(Mohan Meakin Ltd) X – – –
Foster's (Foster's – X – X
India Ltd)
Golden Eagle (Mohan 4 X – 5
Meakin Ltd)
Haywards 2000 (Shaw – – X X
Wallace & Co Ltd)
Haywards 5000 (Shaw 2 2 1 2
Wallace & Co Ltd)
Himalayan Blue – – X –
(Yuksom Breweries)
Hunter Extra Strong
(Som Distilleries
& Breweries Ltd) – – X –
Kalyani Black Label
Premium Lager
(BrewCo Ltd) 5 5 4 3
Kingfisher Premium 1 1 2 1
Lager (BrewCo Ltd)
Kingfisher Strong – 4 – –
(BrewCo Ltd)
Kingfisher Super
Strong Premium
(BrewCo Ltd) X – – –
Knock Out (SABMiller X X – X
India Ltd)
London Diet (BrewCo – – – X
Ltd)
London Pilsner – – – X
(BrewCo Ltd)
Marco Polo Pilsner X – – –
(BrewCo Ltd)
Marco Polo Premium X – – –
Lager (BrewCo Ltd)
Royal Challenge Premium
(Shaw Wallace & Co Ltd) – – 5 –
Royal Challenge
Premium Lager
(Shaw Wallace & Co Ltd) 3 3 – 4
Thunderbolt (Mount – X 3 –
Shivalik Industries
Ltd)
UB Export (BrewCo Ltd) – X – –
Yeti Special (Yuksom – – X –
Breweries)
Zingaro (BrewCo Ltd) – – X –
Sector Shares: Lager – Brand

Domestic brands continue to dominate sales of lager in India, with Kingfisher Premium Lager,
Haywards 5000 and Royal Challenge Premium together accounting for just under half of volume
sales in 2002.
Euromonitor Page 19
Imported brands (eg Heineken, Carlsberg, Beck's, Corona) are mainly found in the on-trade,
although a small number may be found in the off-trade channel, especially in Mumbai and New
Delhi.
TABLE 14 VOLUME BRAND SHARES OF DOMESTIC LAGER 2000-2002
% volume
Brand Company 2000 2001 2002
Kingfisher Premium BrewCo Ltd – 18.7 19.6

Lager
Royal Challenge Premium Shaw Wallace & Co Ltd 11.9 11.9 11.3
Golden Eagle Mohan Meakin Ltd 9.5 9.5 8.1
Knock Out SABMiller India Ltd – – 7.1
Kingfisher Strong BrewCo Ltd – 5.5 5.6
Zingaro Millenium Alcobev Ltd – – 5.0
Sandpiper Millenium Alcobev Ltd – – 4.1
Kalyani Black Label BrewCo Ltd – 4.3 3.0
Foster's Foster's India Ltd 2.6 2.6 2.6
UB Premium Ice Beer BrewCo Ltd – 0.5 0.5
UB Export BrewCo Ltd – 0.5 0.3
Kingfisher Premium United Breweries Ltd 19.7 – –
Lager
Knock Out Mysore Breweries Ltd (MBL) 5.8 – –
Kalyani Black Label United Breweries Ltd 5.3 – –
Kingfisher Strong United Breweries Ltd 4.4 – –
Zingaro United Breweries Ltd 4.4 – –
Sandpiper United Breweries Ltd 3.9 – –
UB Export United Breweries Ltd 0.5 – –
UB Premium Ice Beer United Breweries Ltd 0.5 – –
Knock Out South African Breweries – 5.9 –
India Ltd
Sandpiper BrewCo Ltd – 3.9 –
Zingaro BrewCo Ltd – 4.6 –
Others 14.4 12.4 11.9
TOTAL 100.0 100.0 100.0

Company Profiles: BrewCo Ltd

Company background
BrewCo Ltd was formed in 2001, following a major restructuring exercise within its parent
company United Breweries Group. A 100% subsidiary, BrewCo is the dedicated flagship beer
company of the group. It is also the largest brewery in India, with 22 breweries, and owning 50% of
the brewing capacity of the country. As of 2002, BrewCo had a 30% volume share of beer in India.
Central to BrewCo's activities throughout 2001 and 2002 was the acquisition of stakes in several
companies in a bid to increase its sector dominance. Transactions included the 65% acquisition of
Associated Breweries & Distilleries Ltd, which owns the leading London Pilsner brand, and a 97%
stake in Mangalore Breweries & Distilleries Ltd – a company that has a strong foothold in
Karnataka.
Euromonitor Page 20
It also acquired a 41% equity holding in Inertia Industries Ltd, which gave it manufacturing
capacity in Haryana, where the company lacked its own unit, and additional capacity in
Maharashtra. Inertia Industries will be responsible for the distribution and marketing of regional
brands such as Sun Lager, Flying Horse, Bullet and Charger, whilst BrewCo will focus on its core
national brand, Kingfisher.
In a strategic move, BrewCo also entered into a contract brewing agreement with the Chennai-
based Empee Breweries Ltd for the brewing of BrewCo's entire beer range for sale in Tamil Nadu.
Prior to this, Empee Breweries was manufacturing and bottling Shaw Wallace's Haywards 5000
beer under contract for both Tamil Nadu and Kerala. The company has an estimated 12% market
share in the Tamil Nadu region, and is the sixth largest brewery in India with a monthly capacity of
360,000 cases. The Empee Group has its private labels, including a range of beers and spirits sold
by Empee Distilleries Ltd under the Marco Polo and McLene umbrella names, respectively.
SUMMARY 2 BREWCO LTD: OPERATIONAL INDICATORS 2002

Sales 2002 Rs3,692.9 million
% growth over previous year 11.3
Advertising expenditure 2001 Rs779.4 million
% growth over 2000 5.7
Staff costs Rs10.3 million
Source: Company research
Competitive positioning
Along with Millennium Alcobev which amassed a near 10% volume share in beer in 2002, BrewCo
makes up the brewing business of United Breweries Ltd. Collectively, this combination makes
United Breweries the undisputed leader in beer, with a 39% volume share in 2002. While
Kingfisher is the main brand of BrewCo, Millennium looks after the regional brands of Zingaro and
Sandpiper. More importantly, this allocation of marketing and promotion responsibilities has helped
the Kingfisher brand alone to command an overwhelming near 25% volume share in 2002.
Much of United Breweries's empire has been built on brand acquisitions and contract
manufacturing agreements, a strategy that is the result of the government's ban on all major media
advertising, which makes it almost impossible to promote a national launch of a new product.
The company's greatest strength lies in its unparalleled penetration in the country, in both the on-
trade and off-trade channels. Headquartered in the Southern pub city of Bangalore, its operations
are better defined there as compared to the other regions. Aggressive marketing and promotion has
contributed to the company's strength.
Most innovative of all, the company has increasingly used the Internet to compensate for the lack of
a suitable traditional advertising platform, with its website www.kingfishernetshop.com offering
delivery of beer, Men's and Ladies apparel and other Kingfisher accessories like Golf Bags, Hats
and Caps purchased online in the cities of Mumbai, Hyderabad and Bangalore.
Led by its dynamic chairman – Mr Vijay Mallya – the company has expanded its presence
internationally. Kingfisher is currently marketed in 50 other countries worldwide, and has captured
a niche market among Indians residing abroad.
Euromonitor Page 21
TABLE 15 BREWCO LTD: VOLUME SHARES OF BEER BY SECTOR 2000-2002
% volume
2000 2001 2002
Lager – 39.6 29.5

BEER – 39.6 29.5
Company Profiles: Shaw Wallace & Co Ltd

Company background
Part of the Jumbo Group of companies in India, leading liquor player Shaw Wallace is engaged in
the manufacture, marketing and export of alcoholic beverages. In fiscal 2001, the company –
ranked among the most distinguished blue-chip companies in India – recorded a turnover of Rs6
billion, of which a portion is derived from exports to destinations including the US, Latin America,
South Korea, the Middle East and Singapore.
Shaw Wallace is one of the few companies that boast a varied yet successful product portfolio from
spirits to beer, wine and FABs across all price points. The company is particularly strong in beer
and whisky, where its products are targeted at the upper tier of consumers. Within beer and spirits,
Shaw Wallace is the second largest manufacturer, after UB Group.
Brewing & distilling business separated
As part of an ongoing restructuring since 2001, Shaw Wallace has created new subsidiaries to
ensure focused expansion plans. The objectives are, first, to maintain a sharper focus on its core
business, and, secondly, to enable the easier establishment of joint ventures or to attract equity
investment in these subsidiaries.
Shaw Wallace Breweries Ltd and Shaw Wallace Distilleries Ltd have been established as the
exclusive sales and marketing subsidiaries of the company's beer and liquor businesses respectively.
Skol Breweries Ltd and Maharashtra Distilleries Ltd are the major beer and liquor manufacturing
subsidiaries, in addition to another seven brewery and 15 distillery units under its wing. Wine is
under the control of Shaw Wallace's International Brands division, which concentrates on the
importing of international wines to market in India.
Shaw Wallace Distilleries Ltd has a total capacity of 25 million cases, 15 million of which are
manufactured at its own units, while the other 10 million cases are sourced through manufacturing
by contract. The company signed an agreement with Jammu-based New India Breweries to set up a
1.2 million case brewery near Jammu by March 2003, at an investment of Rs200 million. Shaw
Wallace has 51% stake in the joint venture, with the New India group holding the remaining 49%
stake.
Shaw Wallace had also forged an exclusive lease arrangement with Winsome Breweries of
Rajasthan to use the two million case annual capacity of the brewery to exclusively bottle its brands
for the North India markets. The Jammu facility was Shaw Wallace's 24th brewing unit in the
Indian sub-continent.
Change & development – key to sustained market leadership
While the organisation is safely entrenched as one of the manufacturing giants of the country and
by far one of the most promising players in the international arena, Shaw Wallace continues to
speak the language of change and development, in order to stay relevant to evolving consumers'
tastes and preferences.
Euromonitor Page 22
With a view to keep up with the demands of the consumer, Shaw Wallace has relaunched many of
its old products like Antiquity, Royal Challenge, Director's Special (DSP), DSP Black and Old
Tavern Whisky, sprucing them up with revolutionary new packaging and media communication.
From the international portfolio, Shaw Wallace, in its association with Kyndal Spirits coined in
2001, unveiled a plethora of new products being introduced for the first time in India. The range
includes Findlaters, one of Scotland's best-known Scotch brands, Vladivar vodka, Veba, UK's
fastest growing FABs and Papillon. A range of Shaw Wallace Bottled in Origin French Wines
including red, white and sparkling wines, and Golden Mist, a range of red and port wines, have also
been introduced to cater to the budget conscious.
Kyndal has firmed up plans to launch a slew of products for the Indian market in all segments
including single malt Scotch whiskies comprising brands like Isle of Jura and Dalmore, ready-to-
drink products and the whole range of Jim Beam bourbons. The distribution and marketing of these
brands would be through Shaw Wallace & Co.
Beer landscape set to change with merger with SABMiller
In May 2003, Shaw Wallace announced a 50:50 joint venture with SABMiller within the brewing
business. There would be equal representation on the board while SABMiller will be responsible
for day-to-day management of the business. More importantly, SABMiller would bring in global
competencies in marketing, logistics, quality and manufacturing process while Shaw Wallace
would offer local understanding of sales and distribution and portfolio of strong brands.
While the combined entity will still take on the Shaw Wallace & Co name, this joint venture is
expected to completely change the dynamics of the domestic beer sector which, till 2002 was ruled
and dominated by UB group. Collectively, the combined entity boasts of a sales volume closely
competing with that of UB group.
UB group (including United Breweries and Millennium Alcobev Ltd) has a production capacity of
around 45 million cases of 7.8 litres each (both owned and contracted), while Shaw Wallace & Co
has a beer capacity of 27.5 million cases. With the formation of the SWC-SABMiller joint venture,
the combined capacity has increased to 33 million cases.
While Shaw Wallace has traditionally been a dominant player within strong beer, the joint venture
will permit the company to increase its presence in the mild segment with brands such as Castle
Lager from SAB's portfolio. Furthermore, four greenfield breweries will also come under the joint
venture's fold for serving Kerala, Madhya Pradesh, West Bengal and Goa markets, where Shaw
Wallace had no prior presence. At the same time, SABMiller has brought four breweries to the kitty
located in Karnataka and Rajasthan where SWC did not have a brewery.
The portfolio of SABMiller in India includes brands such as Three Lions in Uttar Pradesh,
Himachal Pradesh and Chandigarh; Knock Out in Karnataka, Andhra Pradesh and Maharashtra and
other local brands such as Continental, Bengal Premium and Pals. The company has invested in
upgrading its breweries. They have imported especially cultured yeast that will enhance the quality
of the Castle brand. The shelf life of the product is about one year as compared to six months of
other brands in the category.
Competitive positioning
Shaw Wallace's product portfolio spans the whole alcoholic drinks market, although it is strongest
in beer, which accounts for almost one third of total volume sales. Leading beer brands include
Haywards 5000 and Royal Challenge. The former brand has been exceptionally instrumental in
altering consumer tastes from mild to strong beer, as a result of its smooth taste.
Euromonitor Page 23
TABLE 16 SHAW WALLACE & CO LTD: VOLUME SHARES OF BEER BY SECTOR 2000-
2002
% volume
2000 2001 2002
Lager 29.0 31.7 31.8

BEER 29.0 31.7 31.8
Source: Trade press (India Infoline, The Economic Times, The Hindu Business Line, Times of India, The
Business Standard), Company research, Store checks, Trade interviews, Euromonitor estimates
Distribution: Beer – Off-Trade

Indian legislation limits distribution to specialist stores
As of 2003, specialist liquor stores remain the dominant retail outlet for beer with 99% of the
volume sales being routed through them, while the expanding supermarkets and hypermarkets
account for only 1% of total beer volume sales.
In India, state governments have the authority to licence and regulate new production capacity, the
transport, sale and consumption of alcoholic drinks. The production and sale of alcohol drinks
remains a major source of revenue for all states, and those that have tried to initiate total or even
partial liberalisation of the trade have had to reverse their decisions. This has resulted in
government-controlled specialised liquor shops that require a licence from the respective state
government to sell alcohol drinks, and which provide the state government with greater control over
the retailing of alcoholic products.
Department stores, supermarkets strive to become distribution channels
With the legislation structure set in place, alcoholic drinks such as beer are rarely sold through other
retailing formats such as supermarkets and convenience stores as commonly seen in Hong Kong
and Singapore.
The Bangalore state government in the South region initially toyed with the idea of selling bottled
beer and wine in selected department and grocery stores within the state, in an attempt to wean
consumers away from hard liquor. The state believed that if lower alcoholic content products such
as wine and beer were made more accessible, this would draw consumers away from the harmful
country liquor, as well as hard spirits from the organised trade. In late 2000 and early 2001, selected
supermarkets within the region were permitted to sell alcoholic beverages on their premises,
including the supermarket chain Food World, where an entire corner is dedicated to spirits and wine
products.
However, this has met with strong resistance from various sections of the conservative community.
Religious heads and workers' and women's organisations, amongst many others, vociferously
protested, as the move was seen to be approving and promoting alcohol consumption.
Food World is one of just a mere handful of supermarkets that continue to retail alcoholic drinks on
their premises, although industry sources are optimistically expecting to see more developments in
the retailing of alcoholic products in supermarkets and hypermarkets in the forecast period.
With sales of beer in the global market reaching maturity peaks, especially in the developed
countries, leading international breweries are looking to tap into the immense potential that India
and China present with their large population base. As such, there will be pressure on the local
government to liberalise distribution.
Euromonitor Page 24
With this highly-controlled structure for the distribution of alcoholic drinks in place in India, the
other channels such as independent food stores, convenience stores, discounters and direct sellers
do not feature at all in India for the distribution of beer.
TABLE 17 VOLUME OFF-TRADE SALES OF BEER BY DISTRIBUTION FORMAT: %

ANALYSIS 1998/2003
% off-trade volume
1998 2003
Specialists 100.0 99.0

Supermarkets/Hypermarkets – 1.0
Independent food stores – –
Convenience stores – –
Discounters – –
Direct sales – –
Others – –
TOTAL 100.0 100.0
Market Forecasts: Beer – Off-Trade & On-Trade Volume & Value

Infancy indicates tremendous growth potential
Sales of beer in India have considerable potential, considering the country's low per capita
consumption relative to that in other nations of comparable economic development. With the per
capita consumption at only 0.7 litres in 2003, there exists a considerable gap between demand and
supply of beer in the Indian market.
In 2003, sales in the world's second most highly populated country amounted to some 93 million
cases of beer of 7.8 litres each. The World Cup Cricket fever catches the nation once every four
years and the entire country gets bowled over by their passion for the game.
As the cricket fever picks up, the number of beer drinkers not only increase but the volume of beer
consumption per person also increases significantly over a time span of three months before and
during the season. 2002 witnessed a higher growth rate of 10% due to the soccer World Cup as the
Cricket World Cup was in the first quarter of 2003 and the same trend is expected to repeat in 2005
and 2006.
Sales of beer are expected to expand by a CAGR of nearly 7% in constant value terms over the
forecast period. Value growth is expected to be lower than that experienced in the review period,
and below the forecast period volume growth, due to expected decline in beer prices. Along with
stimulated competition from foreign imports entering the domestic arena, India will face further
pressures to fulfil its WTO commitments by reducing customs duties to its trading partners. These
imported brands will be in direct competition with premium brands like Kingfisher, Haywards and
Royal Challenge.
In addition, although this may not take place within the next year or two, when state governments
permit the sale of beer in supermarkets, hypermarkets and other grocery outlets, prices will fall. The
consolidation of manufacturing capacity that was observed in 2001 and 2002 will also result in
further cost reductions to the final consumers.
Social factors augers well for the brewing business
Demand for beer is expected to rise, with a host of social changes fuelling growth. More consumers
are turning to beer as a beverage rather than a liquor. A large number of consumers are turning
away from hard spirits to alternatives such as beer, soft drinks, ready-to-drink products and so on.
Euromonitor Page 25
There is also a whole new group of consumers that will reach the legally acceptable drinking age in
the forecast period. With 25-30 million new beer drinkers across the country, this represents a
sizeable chunk. Beer is usually the first introduction to alcohol in India. It offers a good value for
money proposition in addition to providing satisfactory intoxication levels. The drink is conducive
to the hot climate in these parts where consumers opt for a glass of chilled strong beer.
Consumption of beer in smaller towns and semi-urban areas is also likely to rise with a battle for
the market between the two giants – United Breweries and Shaw Wallace.
Imported brands will cater only to niche urban markets unless they find a strategy to provide their
offerings at near-local prices. Indian beers are also likely to be increasingly exported especially in
European countries and the US.
Further liberalisation expected
The industry has started to seek a different status in terms of sales and marketing for beer from
alcoholic drinks that have a higher alcohol content, and will work to reduce the excise duties and
other taxes applied to beer. This will ultimately reduce prices of beer to consumers. Low prices
have eternal appeal in India, as it is a highly price-conscious country with low levels of economic
development in the rural areas.
Various manufacturers, such as United Breweries, are pressurising the Indian government to give
beer and wine a separate status from spirits, and position beer alongside soft drinks instead. The
beer industry can expect to see other states following in the footsteps of Himachal Pradesh and
Uttar Pradesh in liberalising beer. Both states have imposed separate tax structures on beer and
sprits, with lower taxes applied to the former.
Furthermore, Uttar Pradesh and Haryana have started to acknowledge the different consumer
demand for strong and mild beer, and in attempt to wean the local population away from the more
popular hard variant, lower taxes are imposed on mild beer. However, trade sources suggest that
this demarcation will actually increase the states' revenue through higher taxes on strong beer, as
they do not foresee a substantial shift from the strong variant to the milder one.
Sweltering summers encourage foreign brewers to enter India
The scope for the upward trajectory in the growing demand for beer stems from the wave of
modernisation and the "Go West" attitude of the Indian population. The earlier stigma that was
attached to beer drinking has slowly eroded with growing urbanisation and Western influences.
Changing lifestyles, purchasing power and a growing pub culture have also contributed to the
foreign players eyeing this market. Nobody looks forward to the sweltering April-June summer
months in India except beer manufacturers. Around this time, they can flood the market with new
brands and novel gimmicks to lure drinkers and to rake in sales before the monsoon period arrives.
With demand for beer expected to rise, and the gradual opening up of the sector to foreign players,
several international players, such as Heineken and Carlsberg, have indicated their interest in
forming joint ventures with local brewers. As the international market for beer is maturing,
international manufacturers are keen to seek new pastures, and India's large population base
presents a lucrative and promising opportunity.
Despite India's past history of tight governmental control and alcohol cartels amongst the retailers
and breweries, industry players are quite confident that the beer sector will progress to a more
benign regulatory environment. With increasing integration of India with the global economy and
further pressure from the WTO nations, companies are optimistic that taxation on beer will fall,
resulting in lower final prices of imported products, which will allow foreign players to complete
on a level ground with United Breweries and Shaw Wallace.
Euromonitor Page 26
2003 has seen more action in the boardrooms than in the marketplace as three foreign beer
manufacturers plan to make life tough for local breweries. Amongst them, SABMiller is on an
acquisition spree as it smothers rivals and seeks to notch up market share. Foster's, which proudly
flaunts its Australian pedigree, is devising innovative marketing schemes to boost brand recall.
Foster's in a unique marketing effort launched a "know your beer" campaign, targeting
professionals and business groups. A CD produced by Foster's that gives a history of beer talks
about the different varieties and shows the manufacturing process, was distributed. Marketing
teams from Foster's are also taking office groups to pubs after work hours and over a couple of
pints, familiarising them with beer manufacturing.
SABMiller – most active of all
SABMiller, though, has been the most aggressive of the lot. In just 33 months it took over about
half a dozen prominent Indian breweries, including Narang Industries, Mysore Breweries, Deccan
Breweries, Pals Breweries and Rochees Breweries. The company ended up with 11 brands – some
acquired, others introduced from SABMiller's international portfolio – and most of them are now
enjoying major recall. SABMiller India is concentrating on three of them: Knock Out (strong beer),
Castle Lager (premium international mild beer) and Three Lions.
In addition, SABMiller India and Shaw Wallace Co announced the establishment of a 50:50 joint
venture known as Shaw Wallace Breweries Ltd. (SWBL). This is the largest ever merger and
acquisition deal in beer in India. The joint venture has led to the creation of a leading brewer, with
an estimated market volume share of more than 35%.
The company to be affected the most is United Breweries, which has occupied the number one
position in beer in India, largely on the strength of its Kingfisher brand. The beer landscape in India
will change as a slew of brand launches are expected, both from the new combine as well as from
United Breweries and its alliance partner Scottish & Newcastle (S&N). SWBL is expected to lord
over the strong beer market, with Haywards and Knock Out. This deal is also expected to lead to
professional competition and consolidation in the market.
Jagatjit Industry to pour beer into market, while BDA plans to enter
Jagatjit Industries, one amongst the top four domestic liquor companies, is poised to enter beer in
the summer of 2004. The possibility of extending the Aristocrat family brand into beer is fairly
high. With the overwhelming preference for strong beer in India, company sources confirm that
Jagatjit would be testing the beer market with a strong beer that may have a maximum of 8%
alcohol content.
Aristocrat is Jagatjit's umbrella brand in the Indian-Made Foreign Liquor (IMFL) market. The
brand family has its presence across spirits, with the bulk of the sales coming from whisky. The
company's initial brewing facility would be attached to the existing IMFL plant at Ameera in
Punjab.
Jagatjit has been traditionally strong in the northern markets of Punjab, Haryana, Rajasthan and
Uttar Pradesh. For instance, in Haryana the company stakes claim to roughly 40% volume share of
the IMFL market. Industry observers state Jagatjit's plans to enter beer could have been influenced
by tremendous demand for strong beer in North India during the summer months. In fact, the
summer of 2002 was exceptionally good for the breweries in the North, which saw optimum
capacity-utilisation.
BDA Ltd, the maker of Officers Choice brand of whisky and rum, also plans to enter the beer
marketing and bottling business. The source indicated that the company was negotiating with a few
foreign beer manufacturers for a tie-up arrangement. The proposed beer division may subsequently
be converted into a joint venture company subject to the success of its beer business.
Euromonitor Page 27
Other beer types to continue to be negligible
Stout, dark beer and low-alcohol beer are not expected to achieve more than a very limited presence
in India over the forecast period. Low-alcohol beer was only recently introduced in the country in
2001 and to date, there are only a few brands serving a very small niche market. Despite positive
response from market players regarding the performance of these new introductions, low-alcohol
beers are unlikely to see significant demand, as strong beer continues to be the preferred choice.
Kingfisher Sport and Kingfisher Light Ice are among the few brands available, which cater to the
health-conscious segment.
On-trade volume sales to grow
Off-trade sales in 2003 constitute around 80% of overall volume sales, with the remainder
accounted for by on-trade sales through restaurants, pubs and bars. The number of on-trade
establishments varies significantly across the various states. Only metropolitan cities like Mumbai,
Delhi, Calcutta and Chennai have the concept of pub culture since the urban people are more
affluent and forthcoming in accepting Western culture.
That said, trade sources do expect sales of beer through the on-trade channel to grow over the
forecast period. Besides the influence of westernisation on pub culture and drinking, the gradual
economic progress of the country and the continuous spurt of pubs and bars in the metropolitan
cities will pave the way for higher on-trade consumption.
Furthermore, as the international labels continue to seek their fortunes in the local market, the on-
trade channel will be an area of focus for these companies. This is because specialist stores have
indicated concern about stocking premium, international labels as these have a very high price tag
as compared to local Kingfisher and Haywards and suffer from low turnovers.
TABLE 18 FORECAST VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY

SECTOR 2003-2008
Million litres
2003 2004 2005 2006 2007 2008
Lager 725.8 779.1 832.7 906.0 977.8 1,044.0

– Premium 540.4 581.1 622.1 678.9 735.9 788.8
– Standard 185.4 198.0 210.7 227.1 241.8 255.2
– Economy – – – – – –
Dark beer – – – – – –
Stout – – – – – –
beer
BEER 725.8 779.1 832.7 906.0 977.8 1,044.0

Source: Trade press (India Infoline, Economic Times of India, India Financial Express, just-drinks.com,
Times of India, Hindu Business Line, Business Standard, BeverAsia), Company research, Store
Euromonitor Page 28
TABLE 19 FORECAST VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY SECTOR

2003-2008
Rs million, constant 2003 prices

2003 2004 2005 2006 2007 2008
Lager 59,460.1 63,353.8 67,344.1 72,784.4 77,903.1 82,195.9

– Premium 46,533.2 49,638.9 52,836.8 57,170.1 61,319.3 64,749.0
– Standard 12,926.9 13,714.9 14,507.4 15,614.3 16,583.8 17,446.9
– Economy – – – – – –
Dark beer – – – – – –
Stout – – – – – –
beer
BEER 59,460.1 63,353.8 67,344.1 72,784.4 77,903.1 82,195.9

Source: Trade press (India Infoline, Economic Times of India, India Financial Express, just-drinks.com,
Times of India, Hindu Business Line, Business Standard, BeverAsia), Company research, Store
Market Forecasts: Beer by Region – Off-Trade & On-Trade Volume &

Value
South & West to see boom in beer sales based on pint size & increased affluence
Riding on the prevalent beer boom in Andhra Pradesh and the spurt in sales in Kerala and
Karnataka, sales of beer in South India are expected to grow at a healthy volume CAGR of above
7% over the 2003-2008 forecast period.
The major future growth drivers for the South Indian beer market would be the continued spurt in
the sales of the 330ml beer pints, which are based on the soft drinks model and has effectively
penetrated the younger crowd. Rising consumer affluence, through an increase in disposable
incomes is also expected to contribute to rising beer sales. Extended and prolonged spells of
summer that the South region typically experiences will also act as a growth stimulant.
In the West region, though Maharashtra is experiencing shrinking growth rates in both value and
volume terms as penetration is already high, this decline in demand be more than compensated for
by more dynamic growth in other states, such as Gujarat and Rajasthan. Similar to the South, the
West region is also expected to grow at a healthy volume CAGR of around 7% over the forecast
period.
As the nation's largest market for beer next to South India (Andhra Pradesh replaced Maharashtra as
the single largest market), demand for beer is far from saturation point, with a regional per capita
consumption of a mere 0.1 litre. Strong beer will be the focus of the regional beer market though
mild beer is expected contribute to rising consumption as well. Rising incomes, changing lifestyles
and phased removal of market distortions will all contribute to the growth of beer in the West
region.
Spirits-based East & Northeast – a target for brewer's expansion
Beer consumption in East and Northeast India was confined to the more affluent and product aware
individuals at the time of writing. In addition, spirits remain the preferred alcoholic drink, due to
their higher alcohol content and similarities to the popular country liquor.
This region is also home to the lowest number of breweries in India and with the significant excise
taxes applicable to the movement of beer across states, it is hardly surprising that the population
have continued to swear by the cheaper and stronger country liquor. During the prolonged cold
Euromonitor Page 29
months in the hilly terrain found in the East, spirits, especially rum, are frequently consumed for the
feeling of warmth they generate.
Although sales in North India are rather lower than in the West and South, this region is likely to be
the target of brewers' expansion plans as the West and South approach saturation levels in the latter
half of the forecast period along with East and Northeast India.
United Breweries took the initiative by setting up fresh capacity in the North region to exploit the
potential for growth in beer sales. Uttar Pradesh is also fast catching up with Tamil Nadu and
Maharashtra in terms of volume consumption of beer. Home to the largest regional population in
India, volume sales in North India are also expected to be generated by the large youth population
reaching legal drinking age.
Furthermore, with the continued campaign to shift consumers away from the harmful and hard
liquor sold within the unorganised channel, beer represents an affordable alternative. Across the
country as a whole, alcoholic drink prices are lowest in the North, with minimal taxes, as the central
government recognises the importance of tourism to state revenue. The belt of Delhi-Jaipur-Agra,
which covers the three major states of the Union Territory of Delhi, Rajasthan and Uttar Pradesh,
are particularly popular with tourists.
The decision of the Uttar Pradesh state government to de-link beer from the spirits industry will
provide a much needed boost to beer in the region. Coupled with the lifting of prohibition in
Haryana, this will contribute to a rise in beer consumption. The volume CAGR for the North region
is predicted to be nearly 9% over the 2003-2008 period.
TABLE 20 FORECAST VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY

REGION 2003-2008
Million litres
2003 2004 2005 2006 2007 2008
South India 276.8 296.9 315.8 341.9 368.7 393.0

West India 250.7 267.4 284.6 308.5 330.9 351.6
North India 147.5 159.4 172.3 189.2 205.8 221.8
East/Northeast India 50.8 55.4 60.1 66.4 72.4 77.7
INDIA 725.8 779.1 832.7 906.0 977.8 1,044.0

Source: Trade interviews, Euromonitor estimates
TABLE 21 FORECAST VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY REGION

2003-2008
Rs million, constant 2003 prices

2003 2004 2005 2006 2007 2008
South India 22,373.1 23,761.8 25,179.9 27,102.8 28,997.5 30,477.5

West India 21,391.9 22,767.9 24,113.6 26,024.0 27,783.1 29,301.2
North India 11,451.6 12,267.5 13,127.0 14,273.4 15,324.5 16,226.6
East/Northeast India 4,243.5 4,556.6 4,923.7 5,384.2 5,797.9 6,190.6
INDIA 59,460.1 63,353.8 67,344.1 72,784.4 77,903.1 82,195.9

Source: Trade interviews, Euromonitor estimates
Euromonitor Page 30

BeerMarketInIndia Euromonitor April 2004

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

BeerMarketInIndia Euromonitor April 2004

Încărcat de

Drepturi de autor:

Formate disponibile

Indian Market for Beer

List of Contents and Tables

TABLE 21 FORECAST VALUE OFF-TRADE & ON-TRADE SALES

INDIAN MARKET FOR BEER

Introduction & Definitions

East & Northeast India

Market Size: Beer – Off-trade vs On-trade Volume & Value

Gap expected to narrow over the forecast period

TABLE 1 VOLUME OFF-TRADE VS ON-TRADE SALES OF BEER 1998-2003

Off-trade 399.2 427.3 457.2 489.0 530.7 569.8

BEER 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 2 VALUE OFF-TRADE VS ON-TRADE SALES OF BEER 1998-2003

Rs million, current prices

Off-trade 18,689.1 21,293.5 23,902.5 26,473.9 29,503.7 32,326.2

BEER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Demand for lager only

Beer landscape changes with SWC–SAB merger

United Breweries responds with new subsidiary

SABMiller uncorks its superior Castle Lager beer

Knock Out tries a new look to gain shares

Knock Out's re-emergence on the national scene is crucial for SABMiller.

All in all, excessive taxes stifle consumer demand for beer

TABLE 3 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY SECTOR 1998-2003

Lager 489.1 527.5 568.3 611.0 673.8 725.8

BEER 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 4 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY SECTOR 1998-2003

Rs million, current prices

Lager 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

BEER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Spirits preferred in North India

East & Northeast India continues to be smallest region

TABLE 5 VOLUME OFF-TRADE & ON-TRADE SALES OF BEER BY REGION 1998-2003

South India 191.9 204.9 218.7 235.2 257.5 276.8

INDIA 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 6 VALUE OFF-TRADE & ON-TRADE SALES OF BEER BY REGION 1998-2003

Rs million, current prices

South India 11,945.9 13,811.7 15,744.5 17,693.1 20,220.8 22,373.1

INDIA 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

Market Size: Beer by Packaging Format – Off-Trade Volume

Debate on reuse & recycling of glass bottles reaches new heights

TABLE 7 VOLUME OFF-TRADE SALES OF BEER BY PACKAGING FORMAT: %

Glass 100.0 98.0

Sector Size: Lager by Domestic/Imported Split – Off-Trade & On-Trade

while imported brands suffer from high duties

TABLE 8 VOLUME OFF-TRADE & ON-TRADE SALES OF LAGER BY

Domestic 489.1 527.5 568.3 611.0 663.9 715.1

LAGER 489.1 527.5 568.3 611.0 673.8 725.8

TABLE 9 VALUE OFF-TRADE & ON-TRADE SALES OF LAGER BY

Rs million, current prices

Domestic 31,559.3 36,316.0 41,269.4 46,301.5 52,115.2 57,732.7

LAGER 31,559.3 36,316.0 41,269.4 46,301.5 53,725.7 59,460.1

New Product Developments: Beer

More strong beers for South India

& East & Northeast with the launch of Thunderbolt 10000

Introduction of pint bottles

International brands foray into West India

SUMMARY 1 BEER NEW PRODUCT DEVELOPMENTS 2002-2003

Orangeboom Interbrew NV SA Premium October 2002 West

TABLE 10 VOLUME NATIONAL BRAND OWNER SHARES OF BEER 2001-2002

Shaw Wallace & Co Ltd 31.7 31.8

TABLE 11 VOLUME GLOBAL BRAND OWNER SHARES OF BEER 2000-2002

UB Group 40.1 39.6 39.2

TABLE 12 VOLUME BRAND SHARES OF BEER 2000-2002