Companies

AB InBev sees 50% less sales in India this year

Our Bureau Bengaluru | Updated on September 25, 2020 Published on September 25, 2020

The world’s largest beer company, Anheuser-Busch InBev (AB InBev) has cut it sales forecast in India by 50 per cent for 2020. Covid cess and anti-industry policies in certain States are seen impacting sales.

“I think we will end up with about 50 per cent less compared with the previous year in the calendar year even though we expect Q4 will be better than the previous period,” Kartikeya Sharma, South Asia President, told BusinessLine on the sidelines of the opening of a microbrewery, at one of the hotels of Indian Hotel Company (IHC).

AB InBev and IHC will invest about ₹150 crore together to open 15 brew-pubs across locations during the next five years. “It is a coming together of objectives. We wanted to launch our own craft beer while IHC was looking at focusing more on the millennials,” Kartikeya said.

“We realised that it will be good to produce our own beer and hence we decided to team up with AB InBev to open a microbrewery, 7Rivers BrewPub at our property, The Taj, which is perhaps the first by any 5-star hotels in the country,” Akshay Tripathi, the general manager at IHC, which runs hotels under the brand name the Taj, said. He said the microbrewery will be a business entity on its own and with its own brand.

Kartikeya said AB InBev will continue to be cautiously optimistic about its growth prospects in India. “We have made significant investments in our breweries in terms of increasing its quality and hence the expansion part of capex utilisation is no longer needed in the foreseeable future,” Kartikeya said. But the overall capex for the year is expected to reduce to about 25 per cent.

He said States like Karnataka and Maharashtra have seen a good recovery. Karnataka especially witnessed 85 per cent of sales coming back, compared with last year during the same month.

However, in Telangana, where the company’s market share was as high as 40 per cent, saw a contraction of about 60 per cent as it continues to impose the Covid cess. He said the price per bottle has gone up by about 45 per cent over the last six months because of various duties.

In the case of Andhra Pradesh, the company’s market share was 35 per cent but the government has taken over the trade and plans to impose prohibition over the next three, four years. “Our share has plummeted to 2 per cent in Andhra Pradesh even as the government there has reduced the number of licences it gives out every year. The government hardly buys us from us anymore,” he said.

In Harayana, the beer sales have actually gone up by 5 per cent compared with last year. It has also introduced a new super mild category with the alcohol content of less than 3 per cent.

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Published on September 25, 2020
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