SABMiller, one of the world’s largest breweries, announced on Tuesday it will invest more than $125-million in India’s booming beer market over the next five years.
The South African enterprise, listed on the London and Johannesburg stock markets, aims to increase its share of the Indian market from 10% to 25%.
”We are planning this investment as India has been identified as a strategic growth market. It is widely known that India is a rapidly expanding economy and represents an exciting growth opportunity,” said Graham Mackay, chief executive officer of SABMiller, in a statement.
While beer sales have been growing fast in India, SABMiller said per capita beer consumption is still low in the country at about half a litre, but is set to rise to about 18 litres per capita over the next five years.
Mackay will meet Finance Minister P Chidambaram and top government officials in New Delhi later this week to discuss the firm’s investments in India.
Liquor industry analysts expect the Indian beer market, currently selling 102-million cases of beer a year, to treble in size in the next 10 years.
Andre Parker, managing director of SABMiller Africa and Asia, said a shift in drinking preferences from spirits to beer, as well as some relaxation in terms of government restrictions will bring about the increase in consumption.
”Hot climatic conditions in India are more suited to drinking beer which is seen as a healthier alternative than other alcoholic beverages,” said Parker.
While older Indian men still nurse their whiskies, increasing numbers of women and young adults in conservative India are knocking back white drinks and beer, sending sales soaring.
”The Indian beer market has been growing strongly at six to seven percent annually, while SABMiller’s brewing operations in India have recorded an even higher growth rate of 12% in the last year,” said Miller.
”With the new investment we will be able to upgrade and expand existing breweries and develop our brands,” he added.
SABMiller entered India in October 2000. It has now acquired leading Indian breweries including Narang Breweries, Mysore Breweries and the Shaw Wallace group’s beer business. ‒Sapa-AFP