AB InBev plans to invest ₹1,000 crore in Indian operations

K Giriprakash Bengaluru | Updated on September 18, 2019 Published on September 18, 2019

Commitment could be the biggest in over a decade by any beer-maker in the country

The world’s biggest beer maker, AB InBev, plans to invest ₹1,000 crore into its Indian subsidiary to consolidate its operations here.

This is one of its biggest investments into its Indian operations, sources in the company told BusinessLine. An EGM to seek shareholders’ nod — which was expected to be held on August 31 this year — was put off. But a spokesperson for the company said it will be held soon.

“We confirm that the EGM has been rescheduled but we will move forward with meeting at the next opportunity on a new date that we will align with our shareholders. We will proceed with the meeting as a routine step to meet our general business requirements,” the spokesperson said.

Once this investment takes place, it will be the biggest in over a decade by any beer manufacturer into its Indian operations.

Market share details

In 2015, the Belgian-Brazilian brewer acquired British-South African beer maker, SABMiller, for $107 billion.

In India, the full acquisition of SABMiller took nearly two years to complete. Following the merger, AB InBev’s total market share, as of now, is around 24 per cent; while that of United Breweries is around 50 per cent.

The total size of the beer market in India is around $15 billion and is growing at about 7.7 per cent on an annual basis, according to Statista, a provider of market and consumer data.

AB InBev has been rapidly increasing its presence in India with its popular brand Budweiser being among the top three in the premium category. Last year, it snapped its ties with its joint venture partner RJ Corp to operate a wholly-owned subsidiary, Crown Beers Ltd.

In July 2019, the company launched Budweiser 0.0, a non-alcoholic beer in India in line with its global goal to offer low and non-alcoholic beverages to its customers.

Non-alcoholic beverages

“One of our global Smart Drinking Goals to Empower Consumers Through Choice is to ensure that no or lower alcohol beer products make up at least 20 per cent of our global beer volume by 2025,” the spokesperson said. The company has committed about $1 billion to reduce alcohol in its products.

As of 2018, eight per cent of AB InBev global beer volumes came from no and low alcohol beverages.

“Beer is a drink of moderation and as a leading brewer, we would like to offer our consumers choice. Budweiser is the fastest growing premium brand in the country and the launch of Budweiser 0.0 will further enable the brand to be inclusive, as many people today do not drink alcohol,” the spokesperson said.

Analysts tracking the beer market in India say that most of the competition for traditional players such as United Breweries and AB InBev will come from craft beer makers who, armed with investments from various venture funds, are making inroads into key markets.

United Breweries has already announced plans to launch its own craft beer brands in the country. Craft beer accounts for about 3 per cent of the total market size of beer in the country but is growing exponentially.

Listing of Asian business

Meanwhile, according to reports, AB InBev has revived its plans to list its Asian business with the HongKong Stock Exchange. In India, it has steadily bought back most of the shares from its shareholders after it took over the operations of the listed SABMiller.

However, its Asian listing is expected to rake in around $10 billion which reports suggest could be used to acquire some of the regional players.

Excluding Australia, Budweiser APAC revenues were up by 7.4 per cent last year to $6.74 billion.

Published on September 18, 2019
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