India: Beer sales plummeted by 10% last year

Beer sales in India plummeted by 10% in 2017 according to industry officials, citing excise department data. Shipments of beer declined to 259.19 million cases (22.1 million hl) in 2017 from 287.99 million cases (24.5 million hl) one year earlier, reported The Economic Times. Reasons are said to be a ban on liquor sales near highways (, 12.5.2017), a total ban on alcohol in the four Indian states Madhya Pradesh, Kerala, Bihar and Tamil Nadu, which also caused Carlsberg to close a brand new brewery (, 2.9.2016) and a beer price hike in a few states.

After years of unprecedented growth 2017 was already the second year in a row with a decrease in beer sales in India. 2017 has also been the worst performance of the beer industry since at least two decades.

“There was an impact of demonetisation and highway ban in the first half of the year. The second half was better and is still recovering,” said Ben Verhaert, President BU India of AB InBev, who replaced his hapless predecessor Pedro Aidar in May 2017 after only 7 month in office.

 “Despite industry declining, there is a strong trend of premiumisation which we expect to further accelerate this year,” explained Verhaert.

AB InBev gained a major foothold in India with the acquisition of SABMiller in 2016. SABMiller, the former number two in the world beer market, was also number two in India and had a 23% share in the Indian beer market in 2015 selling brands like Haywards and Knockout.

Before, AB InBev had been a fringe player and operated thorough a joined venture with RJ Corp, one of the largest bottlers and distributors of Pepsi in India. In 2015 AB InBev exited this joined venture prematurely and had to pay a three-digit million figure. (, 29.9.2016) “We see long-term opportunities to grow our business in India,” said Michel Doukeris, at that time AB InBev zone president for Asia-Pacific.

Beer market leader in India, with about half of the market is United Breweries (UB). Last week it became public that Heineken approached the Indian authorities to buy 15.2% of the unpledged shares in UB, which are currently owned by the Enforcement Directorate after the shares were confiscated under the Prevention of Money Laundering Act from Vijay Mallya, an Indian businessman and former chairman of United Spirits and UB. If the deal is approved Heineken’s stake in UB will increase to 58.2% and make the Dutch brewer the majority owner of India’s largest brewer. (, 8.3.2018)

According to data from Euromonitor the market shares of the leading breweries in India in 2016 were as follows:

  • United Breweries (Heineken):                 44.1% (down from 50.1% in 2011)
  • AB InBev:                                           24.6%
  • Carlsberg:                                          16.9%

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