SABMiller continues to struggle in India

K Giriprakash Bangalore | Updated on March 12, 2018 Published on July 24, 2014

The beer maker reports ₹100-crore loss for FY14

SABMiller, the world’s second largest beer company, continues to struggle in India, with its local business reporting net losses for the last three years.

In the last fiscal, the company, which owns the Foster’s and Royal Challenge brands, saw its net loss widen 13 per cent to ₹100 crore.

Extended monsoon and steep excise-driven price increases were the main reasons for the company to report a loss last year, a spokesperson for SABMiller India told Business Line.

Its total revenue rose marginally to ₹3,363 crore, compared with a 20 per cent increase to ₹3,348.75 crore in the previous year. In FY13, it had also reduced losses to ₹88.35 crore from ₹119.41 crore in the year before.

“The year gone by was not good for us largely because of factors that were not under our control,” the spokesperson said.

Shrinking market share

SABMiller’s market share, too, has reduced over a period of time. During the mid-2000, its market share was a healthy 35 per cent, compared with United Breweries’ 40 per cent. Since then, the South African beer maker’s share in India has fallen to about 27 per cent.

These losses will not make the company to scale down operations in the ₹12,000-crore Indian market, said the spokesperson. “India is a key market in SABMiller’s global portfolio. It offers one of the largest growth opportunities in the region. We have a long-term view on market and are committed to investing and growing it.”

An analyst with a brokerage firm, who did not want to be named, said the company has suffered because it does not have a brand with a pan-India presence like United Breweries’ Kingfisher. “Perhaps this could be one of the reasons for SABMiller not being able to make it big in India even though it entered the market as early as 2000,” he said.

Currently, the company owns 10 breweries across States and has four more on contract basis, and further investments will happen depending on how the market is growing.

Published on July 24, 2014
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