Beer companies blame good monsoon for stale sales

The Indian beer industry has failed to set the dance floor on fire this year. Though various industry segments are showing double-digit growth, beer sales are likely to decline marginally in 2002-03.

Companies blame the good monsoon for the slid in beer sales. "Good rain could be good news for others but for us in the beer industry it meant summer was depressed. And summer being the peak season for beer, sales took a hit," said Ramesh Viswanathan, general manager, marketing, United Breweries.

In the first nines month of this fiscal, beer sales declined by two per cent. Industry did not make up the shortfall in the last quarter.

"Winter is generally not the boom time for beer. At best we can hope to close the shortfall," he said. In 2002-03, beer sales stood at 81 million cases.

The industry expects sales to be between 78-80 million cases. Leading players such as United Breweries (UB) and Shaw Wallace, however, claimed to have beaten the blue.

While UB said it would record an eight-nine per cent growth, Shaw Wallace noted it would hold its market share and even grow in some states. This indicates that the market for regional brands had shrunk.

Viswanathan noted that beer sales also declined due to high pricing in states such as Tamil Nadu.

"It is a nine million case market which is going through a transformation. The government has a month back taken over all the shops in the state from the trade who used to sell over maximum retail price. We hope the market to stabilise by next fiscal and return to the growth path," he informed.

Many argue that the stagnation was imminent since beer sales grow by 12 per cent in the previous year (2001-02).

"Taking last two years, we are still looking at a compounded annual growth rate of six per cent," experts said. Going forward, the industry expect the pint bottles will drive volume due its affordability.

UB claims in all the markets where it was launched the response was good. In some states such as Goa, they contribute 20 per cent of the volume.

UB hopes to achieve 33 million case sales with brands such as Kingfisher, Kingfisher Strong, UB Export, Kalyani Black Label and the newly launched London Pilsner as compared to 30.5 million cases last fiscal.