The Hindu Business Line : Foster’s, Royal Challenge beers to enter TN market

All the new brands are to be priced on par with their equivalent domestic brew. The Government has also decided to import hard liquor from foreign countries and sell them through Tasmac stores.

R. Ravikumar

Chennai, May 19 With demand for beer soaring with the temperature, the Tamil Nadu Government has placed orders through Tasmac (Tamil Nadu State Marketing Corporation) for beer brands that are brewed and bottled outside the State. As a result, more beer brands will find their way into Tasmac shops in the State within a few days.

For years, Tamil Nadu has had a policy not to retail beers that are not brewed in the State, which left the market with limited choice, with Kingfisher leading the pack followed by Haywards 5000 and Marco Polo Super Strong.

According to Mr P. Seetharaman, Managing Director, Tasmac, of the overall requirement of 22 lakh cases (12 bottles of 650 ml each or 7.8 litres a case) for the month, orders for one lakh cases have been placed with SKOL Breweries Ltd for its brands Haywards 2000 and Royal Challenge Classic Premium lager, and with United Breweries for its Ice Premium beer, while the rest (21 lakh cases) will be supplied by domestic players. “We have also shortlisted brands such as Foster’s (Foster’s India), Tiger Lager and Cannon 10000 (both from Asia Pacific Breweries) Charger Extra Strong (of UB),” he said.

This move follows the tender floated by Tasmac, inviting bids from beer manufacturers from other States, a couple of months ago. As there is a clause that any new brand coming into the State should have been present in the country for the two immediately preceding years and must have sold at least 1.5 lakh cases a year during the period, some other foreign brands could not enter the State. All the new brands are to be priced on a par with that of their equivalent domestic brew. “Apart from these brands, we are also negotiating with three more companies (five more brands) for supply, which may take a few more weeks to finalise,” said Mr Seetharaman refusing to mention the brand names. During the last fiscal, Tasmac sold liquor worth Rs 10,469 crore, almost 20 per cent of which comes from beer. In the current fiscal, within the first six weeks (up to May 17), it sold liquor worth Rs 2,800 crore. Compared beer sales in April this year with that of last year, there was a 7.7 per cent growth, but in the month of May so far (compared with the corresponding period in 2007) it registered a growth of 22 per cent, he says.

In volume terms, Tamil Nadu ranks third in alcohol consumption after Punjab and Andhra Pradesh. But, in value terms, it tops the list as a result of higher taxes. With more jobs, more disposable income and more floating population, the demand is growing very fast. “And, as we see a gap between the supply and the demand in the State, we have decided to import beer from other States this year.” However, orders are placed on monthly basis depending on the demand.

That apart, even in the hard liquor category, the Government has decided to import from foreign countries (bottled in origin) and sell through Tasmac shops. The proposal was tabled in the last Assembly session and the law has also been amended. Once it is notified, brands imported from other countries will also find the shelf space here.

According to retail industry sources, some modern retailers in the State have approached Tasmac for shop-in-shop format in their stores. If this arrangement works out, such Tasmac counters, manned by Tasmac employees, may sell select products and brands in those modern retail outlets.

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