E-Malt.com News article: India: SABMiller India Ltd launches new strong beer to compete with Carlsberg and AB InBev

SABMiller India Ltd, the country’s second-largest brewer, has launched a new brand called Miller Ace, as the company looks to tap Indian consumers’ preference for strong brews with a pricey strong beer that will compete with brands sold by Carlsberg Group and Anheuser-Busch InBev, Livemint reported on September 16.

Strong beer, which refers to brews with alcohol content of 5-8%, accounts for 85% of all beer sales in India. Kingfisher Strong, made by United Breweries Ltd, is the best-selling brand in the country but recently people have also shown willingness to shell out cash for far more expensive strong beer labels such as Carlsberg Elephant and Budweiser Magnum.

SABMiller, which owns brands such as Miller High Life, Foster’s and Haywards, will distribute Miller Ace in retail outlets across India over the next six months. A 650 ml bottle of Miller Ace will cost Rs.140 in Delhi. Budweiser Magnum sells for Rs.175 while Kingfisher Strong costs Rs.85 in Delhi. Beer prices vary across states.

SABMiller was planning to launch Miller Ace this financial year to compete with Budweiser Magnum and Carlsberg Elephant, Mint first reported in June.

“Many consumers were expressing the need to trade up to a world-class strong beer that would have the taste profile of a strong beer but comes with a premium brand and premium packaging. Miller Ace caters to that need,” SABMiller India marketing director Darioush Afzali said in an interview.

Strong beer sales grew at a compounded rate of nearly 40% over the past two years, according to Afzali. “Premium strong beer has been growing even faster and this trend will continue for the foreseeable future so there’s a lot of opportunity there,” he said.

The launch of Miller Ace is part of SABMiller’s plan to rev up growth by increasing sales of high-margin brews and revive its fortunes in India where it has lost market share to newer entrants Carlsberg and Anheuser-Busch InBev, as well as market leader United Breweries.

Though SABMiller says the company’s loss of market share is an intentional move aimed at increasing margins—losses have narrowed in some of the past few years—analysts say rivals have moved faster even in launching premium brews.

Anheuser-Busch’s Budweiser, United Breweries’ Kingfisher and especially Carlsberg’s Tuborg have all gained sales at the expense of SABMiller brands. Budweiser Magnum and Carlsberg Elephant currently dominate sales of premium or higher-priced strong beer in India.

In the first quarter of this fiscal year, sales volume continued to remain weak. Net producer revenue at SABMiller declined by 3% as volumes slumped 8%. In comparison, rival United Breweries reported a sales increase of 6% in the first quarter.

SABMiller, which typically rotates its executives in various markets around the world, changed its senior management team in India over the past 18 months. Grant Liversage replaced Paolo Lanzarotti as managing director last June while Afzali took over as marketing head in October 2012 from Derek Jones.

Under the new management, SABMiller has expanded distribution of Peroni, the priciest beer in the company’s portfolio, and re-launched Foster’s in May.


17 September, 2014