India's beer industry expects to grow 5-7% in FY17-18
India's beer industry expects to grow 5-7% in FY17-18

After the Supreme Court’s mid-December judgement, several companies chose channel de-stocking as there wasn’t enough clarity on the implementation, which in turn hurt their January-March sales even as nearly 30,000 shops were shut in April.

Danish brewer Carlsberg’s India business dragged down volume growth in Asia region. But for India volume, the region would have grown 2%, the company said.

Cees't Hart, CEO, Carlsberg, said, "The totality of Asia (business) has, let’s say, declined or contracted a bit because of India. So, despite a good start in all the other countries, in India, because of the implication of the highway ban, we had a negative double-digit volume decline. So, it’s mainly India which impacts the performance in Asia in Q1."

The maker of eponymous lager and Tuborg saw Indian volume decline almost 20%, a steep fall from about 15-20% growth it has been posting for nearly a decade.

The world’s third largest brewer said it expects a volatile year in India with a hit in the first half of the calendar year in India due to the combination of closing, relocating and de-stocking.

Hart added, "What we see is a lot of creativity in India on how to mitigate this for, first of all, the states and secondly for local entrepreneurs. We don’t see a lower demand."

Michael Jensen, CEO, Carlsberg India, said, "It is very detrimental for investor confidence."

India’s beer sales fell 2% in the year to March 2017. Yet, the industry expects to grow 5-7% during the fiscal on the back of new launches.

Anand Kripalu, CEO, United Spirits, said, "We expect the impact to be mitigated eventually and where it doesn’t, consumption will shift to other outlets."

 
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Carlsberg's Indian Business Fell In Terms Of Volume Growth
Carlsberg's Indian Business Fell In Terms Of Volume Growth
 

Carlsberg, a Danish brewer, said that its Indian business has reported lower volume growth at 7% due to higher base compared to about 30% a year ago. During Jan-March 2018, the high growth was on to a lower base when demand suffered due to highway ban. However, the company’s net revenue grew 16.6% during the quarter despite the volatile market.

Cees ’t Hart, Global Chief Executive Officer, Carlsberg, said, "India has a volatile business, due to the differences per state. And what we see as well are some lower sales in some states in anticipation of dry days, due to the elections, and as well we have changed some prices in some states. March was a bit softer. April is doing okay."

In India, Carlsberg, the world's third largest brewer, has about 18% market share backed by Elephant and Tuborg in a market skewed towards strong beer.

"We continue with our growth by first making sure that we have the number 1 and number 2 positions in a state and then continue to invest in another state. The last state we did was Karnataka. We opened the brewery a half year ago and that's what we are now focusing on," Hart further stated.

 

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Carlsberg Sees Increase in Volume, Grew by 19% in India
Carlsberg Sees Increase in Volume, Grew by 19% in India
 

Global brewer Carlsberg has seen a 19% growth in its business by volume due to lower base and strong demand for the eponymous brand.

"Our Indian business had an excellent year following a challenging 2017 that was impacted by the highway ban, GST and tax increases. Our volumes grew by 19% and price mix was 7% due to the strong growth of the Carlsberg brand and improved pricing," Cees ’t HartGlobal CEO, Carlsberg shared on an investor call.

 In the last two years, there have been policy changes in West Bengal, Chhattisgarh and Jharkhand to allow liquor sales only through government-owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu.

Supreme Court restrictions on the sale of alcohol near state and national highways led to the closure of about a third or about 30,000 of the country’s liquor vends, causing a drop in demand for beer and spirits. The court subsequently clarified its ruling, easing conditions for liquor sales and allowing many outlets to reopen.

The Danish brewer also mentioned that the profitability improved considerably due to the volume growth, positive price mix and supply chain efficiencies following the opening of the Karnataka brewery.

"At the moment the price mix is good. As we get the throughput of the volumes around breweries, the profitability improves. So where we were breakeven three years ago, we really now are in double digit EBIT margin position in India," Hart mentioned further.

Carlsberg, the world's third largest brewer, became profitable three years ago in India and expects profits to grow further.

The brewer has about 18% market share in India backed by Carlsberg Elephant and Tuborg in a market skewed towards strong beer segment that accounts for about 80% of the market. In India, Tuborg accounts for more than two-thirds of the company's annual sales.

 

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Carlsberg reports 23% growth in Indian business
Carlsberg reports 23% growth in Indian business
 

Danish brewer Carlsberg has reported 23% growth in its Indian business in the year to March 2018. The factor which led to the growth was sales of premium brands as well as disruptions such as highway ban and demonetisation in the base year. 

Carlsberg, the maker of eponymous brand and Tuborg, posted revenues of Rs 3,735 crore during FY18. Last year, the company had recorded revenues of Rs 3,041crore. The sales volume of the company rose 9.4% against the overall beer market growth of 8.6% during the year with market share increase of 100 basis points. 

Carlsberg said, "The growth in volume and sales is driven due to consistent and increasing consumer demand for our brands, sustainable marketing support and coupled with an increased production capacity of the company as a result of its operational contract manufacturing tie-ups." 

The world's third largest brewer forayed into India in 2007. It became profitable in FY17.

 

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CCI raids United Breweries, Carlsberg, AB InBev over price-fixing charges
CCI raids United Breweries, Carlsberg, AB InBev over price-fixing charges
 

The Competition Commission of India (CCI) has raided the offices of India's United Breweries, Denmark's Carlsberg and the world's largest brewer Anheuser-Busch InBev (AB InBev) as part of an investigation of price-fixing allegations.

Search and seizure operations were conducted by the anti-trust watchdog at the offices of three top beer companies in at least two Indian cities.

CCI has been conducting an antitrust investigation of the three companies for the past year. The government said that the raids found email exchanges which showed that the companies were fixing prices. 

A spokesman for AB InBev in India said, "It would not be appropriate for us to comment at this time."

"We take antitrust compliance very seriously. Integrity and ethics are part of our core values, embodied in our company culture. Our Code of Business Conduct makes clear that our employees must understand and comply with all applicable competition laws," the spokesman added.

 

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Carlsberg records 30% growth by volume in India Biz
Carlsberg records 30% growth by volume in India Biz
 

Danish brewer Carlsberg claims 30% by volume growth in Indian market due to lower base and increasing market share of its strong beer brand Tuborg.

"Our Indian volumes grew by more than 30% due to market share gains and also very easy comparable as Q1 last year was weak being impacted by the highway ban," Heine Dalsgaard, chief financial officer at Carlsberg said in a telephonic conversation.

Over the past two years, there have been policy changes in West Bengal, Chhattisgarh and Jharkhand to allow liquor sales only through government-owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu. Supreme Court restrictions last year on the sale of alcohol near state and national highways led to the closure of about a third or about 30,000 of the country’s liquor vends, causing a drop in demand for beer and spirits. The court subsequently clarified its ruling, easing conditions for liquor sales and allowing many outlets to reopen.

However, Carlsberg, the world's third-largest brewer, said it doesn't expect any further disruptions. "In general, we don't see a further announcement of the regulations to come up but we see in tax issue in West Bengal so that probably there will be an increase in the excise," Cees ’t Hart, global chief executive officer, Carlsberg told analysts.

The brewer has about 18% market share in India backed by Carlsberg Elephant and Tuborg in a market skewed towards strong beer. Last year, it set up its eight breweries in the country.

In India, Tuborg accounts for more than two-thirds of the company's annual sales. The country is largely a whiskey and spirits dominated market and per capita consumption of beer in India is about 2 litres per person a year, which is little compared with the global average of about 30 litres. And strong beer segment accounts for about 80% of the market.

 

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?UB bets Kingfisher Storm to compete with Carlsberg
?UB bets Kingfisher Storm to compete with Carlsberg
 

One of India’s largest beermaker United Breweries (UB) is betting on its latest strong brew, Kingfisher Storm, to wean away customers from rival Carlsberg that has steadily gained 15% market share over the past five years.

Storm will directly compete with Carlsberg Elephant, Tuborg Strong, and the recently introduced Tuborg Classic. The product will be rolled out across India in the next 18 months. This is the most aggressive launch by UB in over eight years, said a company official.

He said, "There is a movement toward a smoother drinking experience — typically falling between 5% and 7% alcohol content."

To ride out a prolonged slump in the beer industry that fell 2% in FY17, UB is banking on youngsters to spend more on a strong beer with a smooth taste.

According to the country's top breweries, this year the beer industry is expected to expand 5-7%, paced by premium product launches and expansions.

UB, which has a market share of about 52%, will introduce a portfolio of imported beers and another strong beer brand by the end of the year. AB InBev’s imported labels such as Corona, Hoegaarden and Stella, which are limited to Mumbai, Delhi, and Bangalore, will now be taken to more than a dozen markets across India.

 

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?Carlsberg ties-up with Lilasons Industries and Pali Hills Beweries
?Carlsberg ties-up with Lilasons Industries and Pali Hills Beweries
 

Beer maker Carlsberg, which sells Carlsberg and Tuborg beer in India, has announced two new contract manufacturing tie-ups with Lilasons Industries in Maharashtra and Pali Hills Breweries in Jharkhand with the objective of strengthening its operations in these states.

Besides its existing brewery in Aurangabad, Maharashtra, the tie-up with Lilasons is a step to meet growing demand and address Carlsberg's growth opportunity in the state, the company said.

The brewery will manufacture Carlsberg Elephant and Tuborg Strong. In the Eastern region, the beer maker will make Carlsberg and Tuborg.

Michael N. Jensen, Managing Director, Carlsberg India, said, "These are two very important markets for us. The positive response from both markets is a testimony to the consumer endorsement of our products."

 

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