Strong beers may offer brewers significant growth potential but their perception as a cheap way of consuming alcohol puts them directly in the regulatory sights of governments looking to tackle excessive alcohol consumption and encourage responsible drinking. Catherine Mars, industry analyst for alcoholic drinks at Euromonitor International, reviews recent developments in this growth sector.

The market for high-strength beers has been growing steadily across a range of markets, notably in Asia Pacific and Eastern Europe, with more brewers augmenting their ranges with stronger offerings. However, as the growth continues Euromonitor International believes brewers are likely to be facing greater regulatory intervention in this area of the market.

Strong beers, classified as being those with an alcohol by volume (ABV) content of more than 6%, are most popular in Asia Pacific and Eastern Europe, where consumers are accustomed to drinking high-strength alcoholic beverages and where stronger beers are more in line with national tastes.

In India, for example, beers as strong as 7% and 8% ABV are very popular, with three of the four top-selling beer brands - UB Group's Kingfisher Strong, SABMiller's Haywards 5000 and Knock Out - coming in at 8% ABV. Euromonitor International estimates that strong beers account for over 50% of total beer sales by volume in India.

Multinational brewers have launched their own strong beer brands to compete with local brews in a bid to make inroads into the lucrative Indian market. Carlsberg, for example, has recently begun brewing its Polish beer brand, Okocim Palon, which is positioned as a strong beer competing directly with Kingfisher Strong and Haywards 5000, at its Himneel brewery in Himachal Pradesh, which it acquired through its joint venture, South Asia Breweries, in early 2007.

Another example is Armstrong Strong (7% ABV), launched by Crown Beers India, the joint venture between Anheuser-Busch and Crown International, in May 2007, while Cobra Beer has introduced an 8% ABV variant, King Cobra, in order to remain competitive in the Indian market.

As the Indian market becomes more crowded with strong beers, domestic players are stepping up their efforts. The UB Group, for example, has actively focused on building sales of Kingfisher Strong. Initiatives including the introduction of branded coolers and massive on-trade promotions have supported strong growth, with sales of India's leading beer brand up by 53% in 2006.

The strong beer phenomenon is not unique to the Indian market. In the Philippines, San Miguel's 6.5% ABV Red Horse Beer, the second largest beer brand in the market, accounted for 16% of beer sales in 2006 according to Euromonitor International. The popularity of strong beers in the Philippines is due to national tastes as well as economic factors. As economic conditions have reduced disposable income, consumers have demonstrated greater interest in products with higher alcohol content, which are perceived as offering better value, including Red Horse Beer and SABMiller's 6.5% ABV Colt 45 Malt Liquor.

In much the same way as brewers are introducing mid-strength beers - at around 4% ABV - to offer consumers more choice, the introduction of stronger beers may stimulate interest and go some way to retaining beer drinkers in the category.

Strong beer is also popular in Eastern Europe but this region remains a more fragmented market. While a number of beer brands in Eastern Europe have high-ABV variants, at 7% or 8%, none of these has a significant share of the market at present. However, Euromonitor International expects that high-ABV beers will find a receptive consumer base in this region given consumer preferences for stronger drinks.

In 2006 in Russia, Ochakovo launched Kuban Svetloye, an extra-strong beer at 11% ABV, and in late 2007 Carlsberg launched Lav 7 beer in Serbia. At 7.2% ABV, Lav 7 is the strongest beer available in the Serbian market but it is not nearly as strong as a recent launch in Germany. Late last year, Czech brewer Drinks Union launched a 10% ABV beer (Doppel-Doppel Bock) in Germany and there are plans to export this product to the US.

Doppel-Doppel Bock is expected to fare quite well on the German market where there is a growing trend for consumers seeking different beers for different occasions. While non-alcoholic brews and beer mixes are gaining popularity, there is also rising demand for beer with high alcoholic content and a stronger taste.

However, while brewers have clearly identified growth potential in this category, the fact that strong beers are often perceived as "good-value" in terms of the relationship between alcohol content and price means this sector is likely to become subject to tighter regulation as governments look to address the problems of excessive alcohol consumption.

In the UK, Sainsbury's was banned from selling strong beers and ciders with an alcohol content over 5.5% abv at one of its London stores in late 2007, while Westminster City Council has introduced a voluntary scheme encouraging supermarkets and off-licences to drop products with more than 6% abv, including Carlsberg Special Brew, Tennants Extra and Diamond White cider.

Even if authorities do not go to the extreme of banning certain products, regulations are a way of restricting sales of strong beers. In Belarus, where there is huge demand among low-income consumers for high-strength beers, the Government has introduced a raft of measures aimed at halting the spread of alcoholism which includes raising the excise tax on beers above 7% ABV to four times the level for those with an ABV content under 7%.