The Hindu Business Line : No plans to relaunch Foster's: SABMiller

"The existing brand of Foster's has been doing extremely well, and we don't see a need to relaunch it any differently," the SAB Miller India, Director, Mr Sundeep Kumar, told Business Line.

But industry analysts say that even though Foster's has been in the market for the last eight years, it has been able to get a market share of a mere 2.5 per cent. In most parts of the country, Foster's hardly has a presence, analysts said. Even the Tamil Nadu market, which constitutes 15 per cent of the total market, is out of bounds, as SABMiller does not have a brewery there.

But Mr Sundeep Kumar said Foster's Lager beer will be extended nationally through SABMiller's network of 10 breweries, thereby trying to seek cost benefits from brewing and distributing the brand locally.

In a market size of 30 million cases, Foster's competitor, Kingfisher has as much as 70 per cent share with the mild beer segment growing steadily at 10 - 12 per cent annually.

Mr Sundeep Kumar pointed out that SABMiller could, in fact, use the capacity of 350,000 hectolitres at Aurangabad, where Foster's is being brewed, as a platform for access to the highly lucrative Mumbai market.

SABMiller has already committed an investment of Rs 600 crore in modernising and upgrading its breweries across the country over a period of time. This should help the company to look at taking Foster's in several markets where it is currently not present. Industry analysts also point out that for a market share of 2.5 per cent, SABMiller had paid three times the price per hectolitre when compared with the acquisition of Shaw Wallace and hence it was necessary for the company to expand the reach of Foster's. SABMiller had paid $120 million to buy out the business as well as the brand of Foster's. The Australian beer company had invested over Australian $100 million in its operations in India and Vietnam since the launch of Foster's.

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