Pay more for cheer

Beer gets dearer as input costs spiral.

Customers will have to shell out more for their favourite beer brands. Prices of most beer brands are expected to go up, thanks to spiralling input costs.

The UB Group is the first beer maker to raise prices. The price of its Kingfisher brand has shot up by 6-10 per cent. In Mumbai, Kingfisher mild beer costs Rs 53 (Rs 48) and its stronger version costs Rs 56 (Rs 53), effective from October 1.

Others like Foster's and the South African Breweries-Shaw Wallace combine are also expected to follow suit.

Pradeep Gidwani, managing director of Fosters India, told Business Standard, "We are contemplating a price hike and a decision to this effect will be taken soon."

Despite repeated attempts, Richard Rushton, managing director of SAB-Shaw Wallace Breweries, was not available for comments. Industry sources said SAB-Shaw Wallace Breweries would also follow its peers.

Ravi Jain, managing director of Millennium Alcobev, the joint venture between the UB Group and Scottish and NewCastle, said, "We may also consider a price revision for Zingaro."

Kalyan Ganguly, president (breweries), United Breweries, said, "Rising packaging and input costs have prompted us to increase the price of Kingfisher beer."

Ganguly added that while costs had been increasing for some time, the company had finally decided to pass them on to consumers. Bottles account for 60 per cent of the variable costs, while malt accounts for 20 per cent.

As several state governments, like Andhra Pradesh, Tamil Nadu and Kerala, control beer prices, manufacturers find it difficult to increase prices.

Andhra Pradesh is the largest beer consuming state in the country, followed by Maharashtra.

The Indian beer market (7 million hectolitres) is dominated by the UB group, followed by SAB-Shaw Wallace.

Strong beers comprise over 60 per cent of the beer market. The UB group controls over 50 per cent of the brewing capacity in India. Other beer brands like Heinekien and San Miguel are imported and sold in India.