Beer advertisements are bizarre creatures. Just remind yourself of how beer is sold in South Africa.
If you’re a Peroni drinker you’re into European high fashion and hang around with super models. If you’re a Castle Lite drinker you are an upwardly mobile young businessman with the perfect wife, house and business partner. If you’re a Black Label drinker you’re a labourer who generally downs a few beers after you’ve saved a drowning colleague from a river.
Well, in India it gets even weirder, because advertising alcohol is illegal. So while all your instincts are telling you that what you are watching on television might look like a beer commercial, it’s not — it’s an advertisement for bottled water that just happens to share a brand with a local beer.
Yes, in India, every beer has its own associated non-alcoholic product, be it bottled water, soda water or a malt beverage, so that it can be advertised on television. So when Indian consumers are watching Bollywood stars Sanjay Dutt and Sunil Shetty in a bar fight, firing bottle caps instead of bullets, you’re being sold Hayward’s 5000 soda water, not Hayward’s 5000 lager.
Or when Dutt goes on a homophobic rant about how men are becoming too feminine in India and the only way to correct this is for all men to drink Hayward’s 5000 strong soda water, the irony is totally lost on him.
But this is hardly the toughest obstacle that SABMIller has to overcome as they try to crack the Indian market. Their biggest hurdle is that alcohol makes up only 1,9% of beverage consumption in India as opposed to 22,1% globally. Only 0,9% of this is made up of beer, while the most consumed beverages in India are milk (40,5%) and tea (44,2%).
The average Indian consumes just more than one litre of alcohol a year, while in South Africa the average is 4,5 litres and in the United Kingdom it’s 10 litres.
Many in this Hindu-dominated country frown on alcohol, with only about 15% of the 1,1-billion population consuming it. Most of those consumers prefer spirits to beer, because beer has a lower alcohol content and is more expensive. This alcohol market is also heavily skewed in favour of the male population, with 29% of all men drinking alcohol and only 0,4% of women.
But SABMiller India says that with the rising middle class of twenty-something social drinkers, beer is on the up and up. The beer market has grown on average 23% a year for the past three years, and up to 80% of all beer is consumed by the under-35s. SABMiller India’s market share is sitting at about 35% and its big rival, United Breweries, has a market share of 43%.
But it’s a tough market to operate in. SAB Miller India can’t advertise its products to a small, if growing, market without sneaky advertising, but they also have to deal with huge hurdles from India’s individually regulated state governments.
In India taxes make up half of the retail price for a bottle of beer, compared with a global average of one-third. Then the restrictions on transporting beer across state borders are onerous: on each shipment of beer crossing a state border SABMiller has to pay export duties as it leaves one state and import duties on entering the next.
In more than half the states the state government conducts distribution and sometimes retail of alcoholic products — and they set retails prices too.
SABMiller India’s managing director Marc Delpon de Vaux says that the federal government is pushing for a uniform policy across all states, which would go some way to solving these regulatory headaches. The fact that SABMiller India’s sales have doubled since 2005, to R2,2-billion, and that India is showing the biggest growth in beer consumption across Asia illustrates there is a big opportunity if SABMIller can weave through the maze — and turn a nation of traditional tea drinkers into beer sluggers.