Mahou San Miguel is keen to raise its profile and presence beyond its domestic market

Mahou San Miguel is keen to raise its profile and presence beyond its domestic market

The head of Mahou San Miguel's international operations has defended the company's decision to branch out into India, a market where the brewer is not able to sell its flagship San Miguel beer brand.

The Spanish company exports San Miguel to around 40 countries worldwide, but has an agreement in place with the Philippines' San Miguel Brewery, which owns a beer with the same name, not to sell the brand in its export markets. The deal, known as The Manilla Agreement, was signed in the 1950s, and gave SMB rights to sell San Miguel in India.

Speaking to media late last week, however, Mahou's international MD, Jonathan Stordy, flagged the potential of India's beer market as reason enough to be present in the country. "India is a very important country for us as it helps us lose the fear of investing overseas," said Stordy.

The company entered India in 2012 through a JV with the VI-John Group, before taking full control of the unit last year and renaming it Mahou India.

"It's also important to go to an emerging market and really get involved on the ground, to learn the reality of developing a new market where consumers have no awareness of our brands," Stordy continued. 

"Secondly, it's the fastest growth market in beer worldwide. The population trends and volume forecasts are amazing. The issue is value, and that's linked to culture and taxation. It's a long-term gain and Carlsberg and SABMiller will tell you how many years it has taken them to make money in India. But, the future in India is massively exciting."

Mahou's core export markets include Equatorial Guinea, a former Spanish colony in western Africa. When asked  about Mahou's plans in Africa, which is widely-considered to be the next boom area for brewers, Stordy said: "In most African countries, you've got to deal with high import duties, so you've got to go for local production. That means, you need to have a brand that will get lots of volume. So, you've got to search for the market where the brand is well-known, where you can access local production and where you've got a route to market. 

"Finding those factors in African countries is hard, when you've got SABMiller, Diageo and Castel doing incredibly well," he added. "We're very aware of the giants we're up against, and we've got to select where we can win."

Late last year, the company bought a 30% stake in US craft brewer Founders. Stordy noted last week that, in acquisition terms, Mahou is "totally focused" on the US craft segment. 

"We've demonstrated we can win in a process against the biggest companies in the world, because of the values that we can offer to the entrepreneur, he said. "We have a winning card in the US. People come to us with opportunities in other regions, but we always compare them to the returns we can get in the US."

Mahou's presence outside of Spain accounts for 14% of the group's business and has doubled in size in the last five years.

For a look at the history of Mahou San Miguel, click here