Beer sales may hold steady despite fall in economic growth

BANGALORE: India���s beer consumption vaulted 9-10% during FY09 as economic slowdown did not reflect on sales as yet in a sector often linked directly to the economic well-being. And brewers expect the growth to hold up despite the economy projected to grow at a slower pace in the ongoing fiscal.

But the domestic beer volume growth in the recently-concluded fiscal was lower compared with 14.8% in FY08, with changes in the excise policy coupled with a deadlock between the state government and brewers over revision of prices in the largest beer guzzling state, Andhra Pradesh, keeping the growth under check.

According to the country���s top brewers, the domestic beer consumption touched 170-174 million cases moving up from about 157 million cases during FY08. While the largest brewer United Breweries (UB) pegged the industry volume growth at around 9%, its main MNC rival SABMiller suggested slightly higher 10% rise in overall beer market.

Both beermakers together account for nearly 85% of India���s beer consumption, which has been expanding in double-digits for the past three-four years on the back of an economy growing at 8-9%.

Several studies in the past have indicated that sale of beer, a low alcoholic beverage, often considered a lifestyle drink, is co-related to GDP. SABMiller expects beer consumption to rise 11% during FY10 even as the economy is projected to grow at 6%, slowing down from 6.7% in the previous year.

UB vice-president Kiran Kumar said the company���s volume sales touched about 82 million cases growing at a pace higher than the industry average of 9-10%.

���Based on early estimates, we believe out market share was at around 48.5% gaining over the previous full fiscal,��� he added. The company���s Kingfisher Strong beer sales crossed 40 million cases. Andhra, known to gross about 17% of the country���s beer consumption, registered a flat growth in FY09 as against 15% growth in the comparable period, said Sundeep Kumar, director of corporate affairs and communications at SABMiller India.