Him Neel Breweries Ltd.A "German" brewery in India

Compared to the situation in Central Europe, the Indian beer market is quite underdeveloped. Thus this market is of great interest for building new breweries.

With an annual consumption rate of about 0.5 l per head, the Indian beer market is completely underdeveloped compared to the Central European situation where consumption rates are 70 to 140 l per head per annum. What could be better for a company interested in beer than to have a closer look at this "development aid possibility". Long term, India is certainly a very interesting market both for breweries who are willing to make commitment as well as for plant component suppliers who have long-term perspectives. Personal commitment and a lot of patience and perseverance are essential prerequisites.

Population structure

India has a population of about 950 million. About 110 to 120 million profess the Islamic faith. In the Hindu religion, with its many, partly even fundamentalist movements, the cast system is still dominant in spite of having been abolished by the Government. About 20 to 25 million are members of the Sikh religion. The average income of a skilled worker is about 70 DM per month. In 1996, some Federal states have again introduced Prohibition because of political reasons (elections).

Bureaucracy

Bureaucratic hurdles are immense and barely understandable for outsiders, they cannot be anticipated in any way - even though our own bureaucrats would also be more likely to prevent setting up an operation by subjecting it to regulations than promoting it. These barriers require a high degree of patience and sympathetic understanding of Indian mentalities and situations on the part of the non-Indian co-operation partners when building a brewery in India.

Approvals

Getting a general approval from the Central Government to build a brewery is not all that difficult. There are many companies and also individuals who have such a licence. At the present time, things have become quieter in this area as far as such contacts and discussions with German breweries are concerned. However, this licence is just the first small step on a long route through many institutions which have to be humoured. But obtaining a licence for co-operation with an non-Indian brewery, in conjunction with licence fees on a foreign currency basis for technological know-how and marketing, is a procedure which demands a great deal of patience. Only well-known recognised international breweries have any chance of having the running licence fees approved. Companies lending their name only have hardly any chance of success. Apart from the general approval, it is also necessary to get the approval of the particular Federal state, which is only granted when the brewery is practically built. Prior to that, the authorities down the line are barely interested in the project. This involves great dangers. The smallest refusal to comply with a regulation, even though it might appear completely insignificant from our point of view, is sufficient to cause the refusal to grant an operating licence.

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