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United Breweries may enter Bangladesh, Sri Lanka; Carlsberg launch deferred
Debojyoti Chatterjee
MUMBAI, January 17: Vijay Mallya's flagship -- United Breweries -- is set to SPREAD its wings yet again. This time round, Mallya is negotiating to set up operations in Bangladesh and Sri Lanka. With a 100 per cent subsidiary already operational in Nepal, the new acquisitions will make UB a major force in the sub-continental market.Even as the UB Pegasus is spreading its wing in the international market, its joint venture in India with Carlsberg is still to take off. A Supreme Court judgement asking liquor companies to seek separate approvals from the state governments has forced Carlsberg to redo its paperwork for the joint venture. The Danish major is working with its lawyers to figure out the implications, and till they aren't absolutely satisfied with the conditions laid down by the excise department, Carlsberg won't hit the Indian summer. "Though Kingfisher is the fourth largest beer brand in the world, and still growing in the international market, competing in the subcontinental market is not easybecause of the presence of international brands. The markets in Nepal, Bangladesh and Sri Lanka are dominated by well known brands like Heineken, Tuborg, San Miguel and Tiger. Though Kingfisher, in an overall sense, may have larger volumes, the brand equity of the other brands are extremely strong," UB CEO and president (Brewery division) Kalyan Ganguly told The Financial Express. With Kingfisher firmly entrenched in India as the largest selling brand, efforts are on to widen its reach. "Setting up breweries in Sri Lanka and Bangladesh does not involve huge capital expenditure, but the real cost is marketing. And, given the fact that several Indian states like Haryana have imposed prohibition, forcing us to shut our breweries, and since there is no way to advertise, it is necessary to spread our marketing reach and stretch the consumer base," Ganguly added. Closer home, UB is trying to shake things up in the domestic market. With per capita consumption stuck at around one litre per annum the company is
looking at exciting concepts like micro-breweries for specialised outlets. "We are already setting up a chain of microbreweries in the US and would like to do the same here, but things have still to be sorted out with the excise department," Ganguly said.A psychographic study by UB of the beer drinker has prompted the company to come out with Ice - a brand aimed at the younger generation. "Brewed in chilled condition with a slightly higher alcohol content and served in frosted bottles (330 ml) with glow signs on them, Ice is seen as a trendy and young brand. And that's our target in India," Ganguly said.UB is fully aware that Ice is not a money making proposition straightaway, but it is confident that the growing franchise of Kingfisher will be enough to give the company the flexibility to build it as a niche brand. "The profile of the beer drinker in India is getting younger and Ice is an attempt to provide the generation next with a cool product," Ganguly said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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