SABMiller says growth on track

DNA Money, 30-August-2008

NEW DELHI: SABMiller India, a subsidiary of the second-largest brewing company in the world, said its growth in the country is on track, despite the slowdown in the industry.

The brewer also indicated that it may increase volumes to maintain margins. It plans to launch some of its non-premium products in this fiscal.

The company has an almost 35% market share in the Indian beer market. It cited undesirable weather conditions in the country for the slowdown in beer sales.

“Weather is a very critical component of our industry and people like to drink beer when it is nice and hot … we have not had a nice and hot season this year. The flood situation in places like Bihar and Andhra Pradesh has not helped either,” Apurv Nagpal, director (marketing) of SABMiller India told DNA Money.

However, the company maintained that their yearly growth target of 15% is still on track, with better sales expected in the second half of the fiscal. “We are still growing … in the range of 10-12% right now and the reason is probably the weather. We are still in August and there is plenty of time for us to recover this year, weather permitting … our annual growth targets remain at 15%,” Nagpal said.

The company which sells its Peroni, Fosters, Hayward’s 5000, Knock Out, Royal
Challenge and Hayward’s Black beer in India said it plans to launch more products this year but that would not include anything from its popular Miller stable. Miller Lite is not available in India, and only recently, the legal issues regarding its introduction have been sorted out.

“We will definitely not launch our Miller brand in this fiscal … we are in the process where we have just started looking into the brand to check it out among consumers etc… no plans at all right now,” Nagpal said.

But he added that there are plans to launch other products in the country.  “We have
planned some new launches this year … but I can not talk about that right now … However, they are not premium brands,” Nagpal added.

The company added that input price hikes have impacted its margins, but that would be partly offset by increased volumes and price hikes. “I think a little bit of extra volume gives you all that you want in terms of margins. We have already hiked prices in Maharashtra and Karnataka. Conversations are on with some other state governments,” Nagpal said.