Indian beer brand to begin local production

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Cobra Beer is probably the UK's best known Indian beer brand, with
its outsized bottles gracing the menus of Indian restaurants the
length and breadth of the nation. But despite its Indian heritage
and image, the beer is not currently made in India - although that
is all about to change, writes Chris Jones.

Cobra is one of the UK's fastest growing beer brands, having successfully carved a niche for itself as the accompaniment of choice for most of Britain's curry eaters. But while its success was built in the restaurant trade, it now has a much wider presence, gracing the shelves of mainstream supermarkets and off licences, as well as bars pubs and clubs.

Brewed in the UK by Charles Wells since 1997, Cobra is now worth £56.9 million in retail sales worldwide, and is now positioned increasingly as an upmarket premium brand, both in the UK and in most of the 30 other countries where the beer is available.

In India, where the brand is already available in major urban centres such as Delhi, Mumbai, Pune, Kolkatta, Bangalore and Hyderabad and where the imported beer is subject to a 400 per cent duty rate, Cobra is focused entirely on the premium market, selling through the luxury hotels, clubs and bars to both the expatriate community and the upper echelons of Indian society.

While this will remain a core market for the brand, Cobra will now be able to take on strong local brands such as Kingfisher in the more mainstream market, following a brewing agreement with Mount Shivalik Group, the largest independent brewing company in India. Without the punitive duty rates, Cobra will be positioned at a much more competitive price, but will continue to focus on the premium image it is cultivating in its other markets.

Under the terms of the agreement, Mount Shivalik will brew Cobra under licence at its facility in Rajasthan for sale in the domestic Indian market, focusing initially on those markets where the brand is already established.

Cobra Beer will deploy its technical expertise at the brewery in Rajasthan, which is currently being upgraded to meet Cobra's stringent quality standards. Trial brewing is expected to commence in mid-April, with the first batch of locally brewed Cobra anticipated for September 2004.

The Mount Shivalik Group has a national market share of 8 per cent and accounts for 20 percent of the market in north India where it is are situated. It has a production capacity of seven million cases split equally between their two plants: Mount Shivalik Breweries Limited (MSBL) in Punjab and Mount Shivalik Industries Limited (MSIL) in Rajasthan.

The brewery was the first to introduce the concept of the Super Strong segment in India in 1984, with its flagship brand Thunderbolt, the market leader in most markets in north and east India. Mount Shivalik also brews Punjab Extra Strong, Golden Peacock and Stroh's.The two partners have invested around $1 million in the Rajasthan brewery in order to meet Cobra's strict quality standards, and the investment is likely to increase in the longer term as Cobra seeks to roll out the brand to the whole of the country, both in partnership with Mount Shivalik and, potentially, with other brewers. Since each Indian state has its own rules on beer production and labelling, a large chunk of the cash invested is likely to be spent on meeting these labelling and other requirements on a larger scale.

Cobra did not give sales figures for its Indian operations, or reveal any targets for short term growth there, but with total Indian beer sales reaching just 77 million cases of beer per year, and per capita consumption of just 0.7 litres, the potential there is huge - so much so in fact that India could eventually surpass the UK as the biggest market for Cobra.

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