Thursday, 25 September 2008

Indian Brewers Under Pressure

Between rising input costs and increased competition, Indian brewers' profits are being squeezed:

"From a two-player market, we now have three new entrants vying for their slice of the pie. Overall industry profitability is probably negative or barely positive," said Vivek Chhabra, regional director, South Asia, Asia Pacific Breweries .

The company, in which Dutch brewer Heineken has a stake, launched 'Tiger' beer in India earlier this year.

"Barley prices have gone up and beer prices have gone up as a result so this year we are seeing some slowdown in sales of beer," said Nupur Sharma, analyst at Euromonitor.

While the Indian beer market is still experience double-digit annual growth, barley prices have increased 19% over the past year and India's low per capita consumption of two liters/person (leaving much room for growth) has attracted new entrants. Given the quality of the Indian beers I've had, more competition in the market can only be a good thing...

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