The Hindu Business Line : Small brewers struggle as biggies consolidate in AP

THE annual tally of beer sales in Andhra Pradesh, the country's largest guzzler, during the last financial year 2003-04, suggest that major brewers consolidated their position, while smaller players without local manufacturing footprint suffered significant volume erosion.

The big players - United Breweries (UB) Ltd, Shaw Wallace Breweries Ltd (SWBL), managed by SABMiller, and Millennium AlcoBev (MABL) - saw their volumes rise even as smaller players, which include multinationals such as Foster's and independent domestic brewers such as Lilasons and Som, lost market share. Andhra Pradesh has four operating breweries carved up between UB, SWBL, MABL and Mohan Breweries. As the market remained sluggish for most part of the year, the smaller players baulking under inter-State levies and increased bottle prices, failed to match the marketing incentives of the biggies. The beer sales in the State, buoyed by an excellent fourth quarter, grew by nearly 6 per cent from 150.89 lakh cases to 161.10 lakh cases.

UB's flagship Kingfisher Premium Lager reported 4 per cent rise with sales moving up from 25.71 lakh to 26.73 lakh cases. The company's another lager brand, UB Export, vaulted 32 per cent to touch 2.18 lakh cases from 1.65 lakh cases. Its strong beer, Kingfisher Strong, witnessed a 20 per cent growth with sales going up from 13.19 lakh to 15.86 lakh cases. SWBL's flagship strong beer, Haywards 5000, witnessed a 3.5 per cent rise as sales moved up from 44.28 lakh to 45.84 lakh cases. Its regional brand, Knock Out, jumped 10.5 per cent to 24.81 lakh cases. The company's lager brand, Royal Challenge, reported an eight per cent growth with sales crossing 21.60 lakh cases.

MABL, a recent three-way joint venture between UB, Scottish & Newcastle and Mr Ravi Jain, saw its brands ride high. Zingaro moved up from 41,638 to 76,555 cases, while Sandpiper touched 91,877 cases from 60,233 cases. Meanwhile Mohan Breweries, which represents the interests of Mohan Meakins in the South, had a mixed bag. Its Golden Eagle, swung negative from 6.30 lakh cases to 5.06 lakh cases while Vorion 6000 declined 7.5 per cent from 1.12 lakh cases to 1.03 lakh cases. However, its new launch Meakins 1000 mopped up 31,384 cases and Black Night beer grew by 6.5 per cent.

In contrast, brands like Hunter and Maharani from smaller brewers such as Som and M.P. Beer Products were nearly wiped out while a Khajuraho beer from a mid-sized independent player, Lilasons, reported an 18 per cent slump from 6.69 lakh cases to 5.47 lakh cases. The Australian beer Foster's continued to slide, dropping from 74,626 cases to 58, 234 cases. Analysts tracking the sector said brewers without local manufacturing were unable to remain competitive in Andhra Pradesh. The State Government has turned down applications for fresh brewery licences, and interestingly, Foster's is one of the applicants. "Moreover, the State has not allowed a price hike for six years. This further tests the competitive skills of smaller players without local manufacturing," the industry observers added.

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