India: Carlsberg on the verge of taking full control of its business

Carlsberg won an arbitration case brought by its joint venture partner in India after a dispute over the Danish brewer's business practices in the country.The Danish brewing group has for years been embroiled in a dispute which revolves around loan repayment from Carlsberg’s JV partner in India, Nepal-based Khetan Group, which owns 33.3% of shares in the holding company in India and Nepal.

For many years, Khetan Group's holding firm, CSAPL (Singapore) Holdings Pte Ltd, said that it had "consistently expressed grave concerns over suspected irregularities and illegalities” at the joint venture company's India business. The company therefore urged Carlsberg "to honor its obligations to improve governance and act in the long-term interests of the business".

However, Carlsberg denied any wrongdoing and said Carlsberg's local auditor,  PwC's India arm, had refused twice to give an opinion on its financials, citing conflicting views from Khetan's three representative board members. That finally prompted the launch of an inspection of the company’s financial accounts by Indian authorities.

The arbitration decision gives now the company "new options to end the dispute and the partnership and secure the future operational freedom for our businesses in India and Nepal," Carlsberg told Reuters earlier. People close to the matter see here the indication that Carlsberg is close to buy out its partner in India. In the past a sale always failed because of the exaggerated price expectations of Khetan Group.

Carlsberg entered India in May 2006 by incorporating a joint venture withKhetan Group, named South Asia Breweries Pvt. Ltd. The name was changed to Carlsberg India Private Limited on February 23, 2009 to reflect the company as a part of the Carlsberg Group.

Carlsberg is the second largest brewer in India, operating eight breweries in the country with a combined market share of 17% surpassed only by Heineken that obtained full control of India’s largest brewery United Breweries Limited (UBL) and its iconic brand Kingfisher two years ago. (, 30.07.2021)

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