Date:24/06/2005 URL: http://www.thehindubusinessline.com/2005/06/24/stories/2005062400730400.htm

Back Foster's signs up local bottling partner

Boby Kurian
Purvita Chatterjee

Bangalore / Mumbai, June 23

ALMOST seven years after it entered India, Australian brewer Foster's has inked the first contract bottling agreement to bolster its national presence. The company has entered into an arrangement with Kool Breweries, located at Dharuhera in Haryana, to roll out its India-specific beer Amberro into Delhi and the neighbouring markets.

Foster's, the first multinational brewer in the country, had until now catered to the domestic market from its greenfield brewery at Aurangabad in Maharashtra. Owing to inter-State levies on alcoholic beverage, its products were priced higher in markets outside Maharashtra. Informed sources said Foster's would, however, continue to brew its international flagship beer only at the Aurangabad plant.

"We have been visiting many plants, but it's too premature to comment on an agreement. We have not short-listed anybody," Mr Pradeep Gidwani, Managing Director of Foster's India Ltd, said, adding that "the regulatory framework (involving import duties between States) remained the biggest challenge" for the company.

However, Mr Dhamanjit Singh, promoter of Kool Breweries, confirmed the bottling agreement with Foster's. The brewery has an installed monthly output of 1.5 lakh cases, and Foster's would use only a part of the bottling capacity initially, he added. In the past, Foster's expansion plans had remained mired in logistical problems, even as later entrants such as SABMiller actively carved up a large share of the domestic beer market, which is pegged at nearly 90 million cases annually. Foster's sells an estimated two million cases a year, while the economy priced Amberro mops up a sizable volume in the Mumbai market.

The bottling pact in Haryana would help the company improve its stakes in Delhi, where it enjoys a respectable share of the premium mild beer market, and expand further into other northern markets. The company's largest market in the country remains Maharashtra, with Mumbai and Pune as its core cities.