E-Malt.com News article: India: Yuksom Breweries acquire a North East Indian brewer

Yuksom Breweries owned by Bollywood star Danny Denzongpa has acquired Rhino Breweries in Assam in a move thwarting industry leader United Breweries’ (UB) plans for a bigger play in North East (NE) markets, the Economic Times cited industry sources on August, 4.

This summer, Denzongpa quietly acquired Rhino Agencies, as his nearly three-decade-old Sikkimese brewing company scripted its first takeover to defend the core markets where it sells beers, such as Dansberg, Hit and He-Man.

Sources said Yuksom paid over Rs400 mln for the brewery that started operations only two months back.

In 2007, UB had signed a technical consultancy and licence agreement with Guwahati-based Rhino Agencies to etch its manufacturing footprint in the rapidly growing NE market.

Denzongpa is showing the first signs of aggression, possibly to defend his home turf, after dabbling in the brewing industry from 1982 onwards, analysts comment.

A top Yuksom official confirmed the acquisition of Rhino Breweries, but declined to divulge further details of the development. “We are one of the leaders in NE, but we are just a small player otherwise,” said Madan Arora, executive director, Yuksom.

Yuksom, which has three breweries in Sikkim, Orissa and Assam, sells over three million cases making it one of the few independent survivors in an industry carved up between UB and SABMiller. It must be mentioned that UB is already well entrenched in West Bengal and had significantly raised its presence in Orissa last year.

Eastern India has emerged as an attractive market for brewers with sales reporting robust double-digit growth in recent years. With over 17 million cases in volume, eastern states now account for roughly 10% of the overall national consumption, pegged at 174 million cases in FY09.

Unlike the strong southern beer market, where the state governments reserve the right to price alcoholic beverages, eastern states have a flexible pricing system. The under-developed logistics and lower purchasing power of this market have, however, kept national brewers away so far, said an official working with a beer major.


05 August, 2009