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K. Giriprakash

Bangalore, Aug 18 India’s second largest liquor maker Radico Khaitan now wants to enter the beer market but would do so only if it gets to tie-up with a foreign beer major.

Radico Khaitan’s Chairman and Managing Director, Dr Lalith Khaitan, told Business Line that the company was “open” to float a joint venture with a foreign beer manufacturer and would not foray on its own to enter the domestic beer market. “It is a growth opportunity. We are certainly open to get into the beer market. But we do not want to enter the market on our own,” Dr Khaitan said.

The company wants to tie up with an international brand for its beer foray because it believes that it will help it to break into the domestic market faster. Dr Khaitan said its large distribution and marketing network will help the company to push the sales of its beer brand.

At present, the domestic beer market is dominated by United Breweries and SAB Miller who together control nearly 90 per cent of the 158 million-case market. The beer market in India is growing at the rate of 14 per cent though the per capita consumption is at around 1 litre. According to the United Breweries’ Web site, it costs the least to set up a brewery in India. In Europe, the cost of setting up a brewery is about $100 a hectolitre where as in India it is about $35 a hectolitre.

Radico Khaitan already has an equal joint venture with the world’s leading liquor company, Diageo. The joint venture makes ‘Master Stroke’ whisky brand in India. Diageo owns brands such as Johnnie Walker whisky, Smirnoff vodka and Captain Morgan rum.

Radico Khaitan which owns Asia’s largest distillery in Rampur in Uttar Pradesh, has brands such as 8 PM whisky, Contessa rum and Old Admiral brandy apart from its recently launched Magic Moments vodka. It sold slightly over 13 million cases of IMFL (Indian made foreign liquor) during 2007-08, about the same as the previous year.

More Stories on : Breweries | Outlook

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