Heineken makes a move for India
India, recognising the country as the next big emerging market for
the major brewers to conquer.
Heineken announced its affiliate, Asia Pacific Breweries, had bought a 76 per cent stake in India's Aurangabad Breweries for $18m. Heineken controls approximately 42 per cent of Asia Pacific Breweries.
The move reveals how major international brewers are fixing their gaze more seriously on India as the next big emerging beer market.
Asia Pacific has an option to buy out Aurangabad Breweries completely by the end of 2008, and will benefit immediately from Aurangabad's two breweries in India's Maharashtra and Goa states, producing 250,000 hectolitres per year.
India's beer market remains relatively miniscule considering the country houses roughly one sixth of the world's population.
Total market volume is around eight million hectolitres per year, meaning average consumption is less than one litre per person.
Marc Bolland, Heineken's chief operating officer said the Indian beer market was growing by more than seven per cent annually, putting it ahead of growth predictions for beer in Russia this year.
Emerging markets have increasingly held up sales for international brewers over the last year amid stagnant and shrinking beer markets in Western Europe and the US.
Graham Mackay, chief executive of SABMiller, said beer still had a "long way to go" in market share growth across emerging markets.
This, he said, was because "consumers are trading up from lower quality, cheap beer, into modernised mainstream products and then on into what we refer to as 'worthmore' brands.
"Consumers are also moving into beer as an aspirational mainstream alternative to cheap spirits, or other types of local indigenous alcohol."
