SAB might buy out Shaw Wallace in beer joint venture

15/02/05 India, Moves are afoot by SAB Miller, one of the leading beer manufacturers in the world, to acquire the remaining 50% stake in its beer joint venture with Shaw Wallace.

The relationship between the joint venture partners is governed by a comprehensive shareholders’ agreement, under which the SAB Miller group has operational management control of the venture.

It has a 28% share of the domestic beer market and is a leader in the strong beer segment, with its Haywards 5000 accounting for about 30% of that market. Shaw Wallace’s beer brands include Royal Challenge, Haywards, Hi-Five, Lal Toofan, Rosy Pelican and Kohinoor. Kohinoor and Hi-Five are mainly exported to the US and the UK.

The JV has given SAB a strong footing in the Indian beer market, which is seeing a shift from strong to mild beers. SAB has already tasted significant success in the domestic market with its Castle Beer. The ratio of mild to strong beers in the country has shifted from 65:35 in 1993-94 to 40:60 in ‘04.

Of the 85m cases sold in ‘04, mild beers accounted for 36m. Shaw Wallace currently has seven fully-owned brewing units and contractual arrangements with 12 more breweries in India and Nepal.

The domestic beer market, which had been posting flat or negative growth over the past many years, returned to high spirits in ‘02-03 with a 15% growth. Shaw Wallace has adopted a strategy of creating regional brands and then launching them nation-wide.

http://economictimes.indiatimes.com/articleshow/1020006.cms