Spanish brewer Mahou-San Miguel to Invest Rs 120 crore in India

Mahou-San Miguel Source: The Economic Times, Apr 17, 2015

MUMBAI: Spain’s largest brewer Mahou-San Miguel plans to invest nearly Rs 120 crore in India to market its eponymous brand along with local beer Dare Devil in an effort to make the country one of its largest markets globally.

The company, which controls more than a third of Spanish beer market, entered India three years ago by acquiring 50 per cent stake in Arian Breweries. Last year, it acquired the remaining stake to set up its first subsidiary and distillery outside Spain.

“Once we started looking at our global expansion plans, India became an important factor,” said Erik D’Auchamp, chief executive officer at Mahou India.

For Mahou-San Miguel, international markets contribute nearly 13 per cent to its annual revenues of 1.2 billion, or about Rs 7,950 crore. D’Auchamp said the company aims to scale that up to 20 per cent in the next five years. “India is a really an important part of that plan,” he said. After a heady double-digit growth last decade, beer sales in India grew less than 3 per cent last fiscal, similar to several other consumer goods segments as shoppers cut back on discretionary spending.

Yet, several companies are investing on aggressive product launches and packaging innovations. For instance, SABMiller launched Miller Ace and UB launched Heineken beer in cans.

Since strong beer comprises 80 per cent of the Indian beer market, companies are taking super premium strong beer to more consumers.

Both the existing brands of Mahou-San Miguel are in the strong segment. “We are also looking at launching lighter brand Mahou Clasica, super premium beer brand Alhambra and even spring water from our global portfolio over time,” D’Auchamp said.

Most global brewers are looking to boost their presence in fast-growing emerging markets such as India. Asia, which accounts for 35 per cent of global beer consumption, is the largest regional beer market.

“In the next five years, it is estimated that Indian beer market will be 45.1 crore cases, bigger than the Spanish market by then. So there is room for existing players and also for newcomers,” D’Auchamp said.

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