Madrid: Taking a big step in its “long-term vocation” in India, Spanish brewing company Mahou-San Miguel Tuesday announced the total acquisition of its Indian subsidiary Arian Breweries & Distilleries.
The Spanish group entered into a joint venture with the Indian company in 2012 and so far owned half of it.
“This acquisition confirms the long-term vocation of Mahou-San Miguel in the nation, where good initial results and encouraging perspectives for market expansion predict a future of growth,” the company said in a statement.
According to the European venture, Mahou-San Miguel has 60 professionals and a beer production factory unit situated in the western Indian state of Rajasthan with an annual production capacity of 250,000 hectolitres.
The Spanish group is currently present in five states of India with a local brand, Dare Devil, and after learning “more about the Indian market”, it will expand in the Asian nation with Mahou Cinco Estrellas and Alhambra Reserva 1925.
“Now we have the knowledge and experience to step forward and take total control of our business in India”, Alberto Rodríguez-Toquero, the director general of Mahou-San Miguel, said.
The per capita consumption of beer in India is one of the lowest in the world (1.5 litres per year), although it is equivalent to half the beer market of Spain, where the per capita consumption is 47.5 litres.
“However, with a population of 1.2 billion, growth prospects for the Indian beer industry are very positive and it is estimated that in the next three years will increase by 11 percent,” the statement said.
Also, on producing beer in the South Asian nation, the Mahou-San Miguel group will avoid taxes on the final price of the product, as tariffs on imported foreign alcoholic beverages are very high in India.
These tariffs, that can triple the selling price of the product, have not prevented other Spanish breweries, such as Estrellas Galicia and Estrella Damm, from exporting for the Indian market.
The local distributors of Estrella Galicia and Estrella Damm, B liquid and Cerana respectively, told EFE Monday in New Delhi that in addition to a cumbersome bureaucracy, heavy tariff is a main problem for commercialising their beer in India.
“We are selling Estrella Galicia since 2012 in western India (Mumbai, Pune), while due to bureaucratic problems sales in northern cities, such as New Delhi and Gurgaon, are delayed by four months”, Rajesh Irani, representative of B Liquid, said.
However, Cerana affirmed the sale of Estrella Damm since the beginning of 2012 in the main Indian cities.
Cerana's spokesperson Ankur Sharma said despite “taxes and bureaucracy”, the beer “is being very well received by the Indian public”.