The Hindu Business Line : Anheuser-Busch buys up full stake in Crown Beers India

Hyderabad, June 21 Within 15 months of successfully bringing the world famous ‘Budweiser’ beer to be brewed and marketed in India, Crown Beer International has decided to exit the joint venture it floated for the purpose with Anheuser-Busch International Inc. (A-BI).

In March 2007, Crown Beers International Ltd and Anheuser-Busch South Asia Holding Company Ltd, incorporated in Mauritius, formed a 50:50 joint venture called Crown Beers India Ltd registered in Hyderabad.

The proposed company was formed with an initial authorised share capital of Rs 125 crore, comprising 12.5 crore equity shares of Rs 10 each and one preference share of Rs 1 lakh. The company established a 500,000 hectolitre (1 hectolitre is 100 litres) capacity brewery to make ‘Budweiser’ and ‘Armstrong’, the strong beer in Sangareddy on the outskirts of the city.

Crown Beers India Ltd, with the mandate to brew and package at the brewery and distribute ‘Budweiser’ beer and other brands, launched the products in the Indian market in May 2007. The brands have been pushed into the southern and western markets in the last 12 months.

Anheuser-Busch has said it will purchase the remaining 50 per cent ownership of the Crown Beers India Ltd from its partner and the acquisition includes the joint venture’s brewery in an announcement from its headquarters on Friday. The terms of agreement have not been disclosed.

Consequently, the new wholly-owned Anheuser-Busch India operation would include the brewery as well, it said.

Anheuser-Busch will now focus on strengthening its India business by continuing to build the distribution and sales of Budweiser and Armstrong across Southern and Western India, which account for over 60 per cent of the beer consumed in India.

Stating this, Mr Rob Newman, Sales & Marketing Director, Crown Beers India, said in response to queries that the company was exploring opportunities to expand the market and launch the brands in other regions as well.

“The Indian beer industry continues to grow at a rapid pace, and acquiring the remaining 50 per cent of the Crown Beers joint venture reaffirms Anheuser-Busch’s commitment to being a key player in this emerging beer market,” said Mr Tom Santel, President and Chief Executive Officer, Anheuser-Busch International, Inc.

“Two years ago, Crown International made the decision to explore the brewing industry and bring a world famous beer to India,” said Mr K.V.D. Prasada Rao, Chairman of the board, Crown Beers.

“After building a modern brewery and successfully partnering with Anheuser-Busch to introduce Budweiser to India, it’s the right time for us to move on to and focus on our other business interests,” he said.

The increasing costs of production of the beer and also the brand development were weighing heavily on the Indian partners for the past few months and led to the decision to exit, said sources in the know of the development.

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