INDIA: Carlsberg to build greenfield brewery

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Carlsberg has finally signalled its entry into India after months of speculation surrounding the brewer's ambitions for the fast-growing beer market.

The Danish brewer said today (7 December) that it planned to build a greenfield brewery in Rajasthan.

Carlsberg has set up a joint venture, South Asia Breweries, to build the brewery and has joined forces with its partner in Sri Lanka, The Lion Brewery Ceylon. Carlsberg will have a 45% interest in the venture but declined to reveal how much it would expect to spend on its entry into India.

A consortium led by The Lion Brewery will also take a 45% stake, with the Industrialisation Fund for Developing Countries holding the remaining 10%.

The news ends months of rumours over whether Carlsberg would take the plunge and enter India's fledgling, but booming, beer market.

United Breweries and SABMiller dominate the sector and analysts have pondered whether other multinational brewers would enter what remains a highly regulated market. Anheuser-Busch is said to be considering making a move into India, while there have been numerous reports on InBev's interest in the market.

A Carlsberg spokesman said the potential of India's beer market was the reason behind the move. "The beer market in India is expected to grow at around 53% between 2005 and 2011; that compares to 38% growth in China over the same period."

The spokesman said the venture would focus on the four Indian states of Rajastahn, Delhi, Haryana and Uttar Pradesh. "We know very well that the market is dominated by two big players but we are ambitious and we are going for a considerable market share," he told just-drinks.

Carlsberg plans to brew its namesake brand at the greenfield site, which will have a capacity of 450,000 hectolitres and be up and running in early 2008. The company is also mulling whether to produce its Tuborg brand at the brewery.

The spokesman said Carlsberg is confident its global brands can be a success in India, despite the patch record of international brews in the country. "It's fair to say Carlsberg is a stronger brand than, say, Foster's," the spokesman added.

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