Consolidation
The Indian beer industry has witnessed a big change during the last five years. The industry was previously dominated by competition between the Vijay Mallya-controlled United Breweries Group and the Manu Chabbria-controlled Shaw Wallace. The scenario changed, however, with the entry of SABMiller in India. The international beer giant started by acquiring small breweries in the south but then completely changed the landscape with the acquisition of Shaw Wallace’s beer portfolio for a reported US$264m in 2003. This gave SABMiller ownership of strong brands like Haywards, along with its existing brands. After the acquisition, SABMiller focused on spreading its footprint across India, including opening new breweries in states where Shaw Wallace did not have a presence.
On the other hand, rival UB bolstered its presence in the country in 1999 by creating sister company Millennium Alcobev, which produces beer brands like Zingaro and Sandpiper. Today, this is a joint-venture between the UB Group and Scottish & Newcastle (S&N). The company started as a 61:39 joint venture between the UB Group and Ravi Jain, a friend of Mallya’s. In January 2002, this was expanded to accommodate Scottish & Newcastle (when it became a 40:40:20 joint venture between UB, S&N and Ravi Jain). In early 2006, Ravi Jain ceased to be an equity partner and Millennium Alcobev became a 50:50 joint-venture.
The SABMiller acquisition of Shaw Wallace gave the company a good position in the strong beer sector (beer with an alcohol content of 6% or more) which is the fastest-growing segment in the market. While SABMiller’s Haywards 5000 is the biggest-selling strong beer brand (a fact hotly contested by UB Group), UB’s Kingfisher is the largest-selling beer brand overall in the market. But, In Indian market hard drinks are more accepted ones
Between them, UB – along with Millennium Alcobev – and SABMiller account for nearly 85% of the Indian beer market. There are some smaller, regional players too; of them, one of the most important is Mount Shivalik Breweries, which owns brands like Thunderbolt.
Mohan Meakin is also a strong regional player in the country, though family rifts have prompted the family-owned business to put itself up for sale. Consensus between family members is proving difficult to reach, but, with companies such as SABMiller, UB and APB showing interest, the company’s fate should be decided soon.
Imported foreign beer brands such as Murphy's Stout, Boston Lager, Paulaner and Chimay have recently become available in the Indian market, but due to very high custom duty this segment remains tiny.
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