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Last Updated: Tuesday, 6 December 2005, 14:59 GMT
Cobra thirsts for India beer boom
Bottles of Cobra beer
Indians are expected to drink more beer as they get more affluent
Cobra Beer, which is brewed as an accompaniment to spicy curries, plans to start production in India and tap into an increase in local drinking.

The firm says it is in serious talks about setting up a brewery and distribution centre in Hyderabad.

Its beer, which has fewer bubbles than many lager-style rivals so that it is easier to drink while eating, is already made under licence in India.

Cobra sees alcohol demand rising as a strong economy lifts consumer spending.

Right time

Company founder Karan Bilimoria told the BBC that he expected Indian beer consumption to increase 40-fold during the next 25 years.

India's economy is expanding by an average 6% a year and half of the population is under the age of 25, Mr Bilimoria explained.

"The time is now right to develop a Cobra beer in India for Indians," Mr Bilimoria said.

He expects the industry will eventually be deregulated, as many others already have been, helping boost output and demand, and bringing down the cost of beer.

Cobra founder Karan Bilimoria
Mr Bilimoria has been developing Cobra into an international brand

"In terms of purchasing power, beer is still very expensive and unaffordable for many people as a drink," Mr Bilimoria.

Indians do not drink much beer at present, less than a litre per person a year, according to estimates.


But Mr Bilimoria draws a comparison with China which started small and is now the world's largest beer market, where people drink 20 litres a year on average.

Despite the rapid growth in China, it still lags heavy-boozing nations like the UK and the Czech Republic, where drinkers glug 99 and 160 litres a year respectively.

As well as benefiting from an expected increase in demand, it also makes good business sense to set up an Indian operation because Cobra beer is currently hit with duty costs of 400% when it is imported into the country.

Once the beer is locally made, it will avoid such high levies, though Mr Bilimoria said that Cobra would still be about 10-20% more expensive than many other beers.

Set up in 1989 by Mr Bilimoria, Cobra has grown quickly and now has an annual turnover of 80m and is exported to over 35 countries worldwide.

It is sold in most major UK supermarket chains and 6,000 restaurants throughout Britain.

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