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Wednesday, 23 January, 2002, 18:12 GMT
UK's biggest brewer buys into India
The UK's biggest brewer is to enter the Indian beer market in a tie-up with United Breweries, maker of the well-known Kingfisher brand.

Scottish & Newcastle will invest 60m to set up a venture with United Breweries, which has been seeking a partner to help promote Kingfisher internationally.

For Scottish & Newcastle, the move is part of bid to broaden its base, and its appeal, beyond Western Europe.

Its new Indian partner is the country's "leading brewer... with a 37% share (of the market), a presence in all key states and the leading brand", Scottish & Newcastle said.

Indian boom?

For Scottish & Newcastle, the beauty of India's beer market is that it is relatively underdeveloped, but growing fast.

Beer consumption in India has risen by 10% a year since 1995, Scottish & Newcastle said.

"Boosted by regulatory liberalisation in some states, future growth is expected to be even faster," the firm added.

On average, Indian citizens drink only half a litre of beer per year.

This compares with 18 litres in China, 85 litres in the US and 100 litres in the UK.

Last April, United Breweries' chairman Vijay Mallya said he wanted to find a partner to help it market its famous Kingfisher beer internationally.

In return this partner would benefit from United Breweries' Indian expertise.

Interbrew and South African Breweries wanted a 51% stake in the Indian company - a holding Mr Mallya was reluctant to allow.

These two breweries have successfully invested in emerging market economies before.

South African Breweries has successfully invested in China, becoming the only international brewer to make a profit in that market.

South African Breweries has already bought four breweries in India.

The BBC's Martin Webber
"Analysts say India's brewery industry has a lot of potential"
See also:

24 Oct 01 | Business
Boom predicted in Indian beer market
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