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K. Giriprakash

Foster's buy a good decision: Sundeep Kumar

Bangalore , Aug. 4

With the acquisition of the Foster's business in India, SABMiller is all set to play a bigger role in the Indian beer market.

The SABMiller Director for Corporate Affairs, Mr Sundeep Kumar, says that his company is not after market share but wants to make it more profitable and is interested in serving better quality beer.

"We are not in the race for market share. We want to ensure that our company is profitable and efficient, and our products are of good quality," Mr Sundeep Kumar said.

Numbers

With Foster's adding around 4.5 million cases per year, the South African beer giant SABMiller's production will go up to 35 million cases every year while its market share will increase 2-3 per cent to around 37 per cent.

United Breweries is still the clear leader with around 50 per cent share of the market and produces around 58 million cases in a year in a total market size of over 100 million cases per year.

And there is the Mohan Meakins' beer brand as well for which SABMiller has made a strong bid. In case, SABMiller is able to acquire that too, its market share will go up by 6-8 per cent.

On the investment front, SABMiller has earmarked around Rs 600 crore for modernising and upgrading its breweries.

UB has set aside around Rs 400 crore for expanding capacities of its breweries.

Mild beer

But Mr Sundeep Kumar claims that the company has doubled its capacity during the last 30 months and one of its brands, Royal Challenge is the fastest growing brands in the mild beer segment.

He said that SABMiller's share in the mild beer segment is now 22 per cent from 16 per cent with Foster's adding 6 per cent of its own.

In places such as Andhra Pradesh, which constitutes 20 per cent of the mild beer segment, SABMiller's Royal Challenge leads the market.

Mr Sundeep Kumar also claimed that in those markets in which SABMiller is present, its market share is between 40 per cent and 42 per cent.

"We lag in Tamil Nadu because we don't have our brewery there and as per the State's policy, one can't import beer," he said.

Foster's market share in some of the markets is as high as 33 per cent and, hence, it was a good decision to buy the brand, he said adding that SABMiller has put together an integration team to work out the modalities of distribution and marketing of Foster's.

More Stories on : Market Shares | Breweries | Brands

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