Anheuser-Busch enters India through a joint-venture
In February 2007, Anheuser-Busch confirmed that it had formed an equally owned joint-venture with India’s Crown Beers to brew, market and sell Budweiser and other beer brands in India when Crown Beer’s new brewery will be completed as of March.
In March last year, the first headline appeared: “Anheuser-Busch brews plan to tap market in India”, followed by “Anheuser-Busch froths up its India plans.” After months of silence, while the world trembled in anticipation (only joking), the St. Louis brewer finally confirmed the rumour that, yes, they were to enter India, and yes, they had formed a joint-venture with Crown Beers, called Crown Beers India, which will employ more than 150 people at one brewery in Hyderabad. The brewery was to be completed in March.
In October 2006, India’s newspaper Economic Times broke news of the deal, citing unidentified sources, who said then that Anheuser-Busch was expected to invest 1 billion Indian rupees (USD 22.7 million by today’s conversion) in the venture.
Anheuser-Busch did not disclose terms of the deal.
Several beer, wine and spirits makers are jostling for space in the India, where more than half of the 1.1 billion population is below the age of 25.
Anheuser-Busch is not the first brewer to enter the market. Others have already come and gone. See Foster’s. Currently, United Breweries Ltd, with joint-venture partner Scottish & Newcastle, dominates the beer market with well-known brands such as Kingfisher.
SABMiller controls about a third of the Indian market. SABMiller first gained a presence by buying half a dozen local breweries in less than two years. Then in 2003 came its boldest move: it picked up 50 percent of Shaw Wallace for USD 132.8 million. It has since picked up the other 50 percent. Its latest coup was the purchase of the Indian business of Australia’s Foster’s Group in August last year, including the Foster’s brand for USD 120 million.
Annual beer consumption in India is estimated at only about one litre per person per year.
