India has slipped down the SABMiller priority list of late as Africa, Latin America and China show greater potential.
Regulatory problems, coupled with loss of market share have led to a succession of beer volume sales declines for SABMiller in India.
Little more than a year since the brewer was touting the Indian beer market’s potential, it appears that India’s star has diminished in the presence of China and emerging markets in Africa and Latin America.
“The regulatory environment remains frustrating and we see that market as a very long-term play,” said SABMiller CEO Graham Mackay, commenting on India during a speech to analysts at last week’s CAGNY conference in Florida.
India was always going to be a long game – per capita beer consumption is under one litre – but SABMiller has faced several setbacks.
SABMiller’s beer volumes fell 21% in the six months to the end of September in India, partly as a result of it witholding supplies to Andhra Pradesh in a regulatory dispute. The period also saw the brewer lose its managing director in the country, Jean-Marc Delpon de Vaux.
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By GlobalDataMackay told just-drinks back in November that the situation in India was “improving all the time”.
And yet, in the three months to the end of December, volumes fell by a further 7%. While the decline has slowed, sales rises for the group’s main rival, Vijay Mallya-controlled United Breweries, indicate that SABMiller has lost market share in India.
Global research group Mintel last year put United Breweries on a 52% market share and SABMiller on 38%.
It was little surprise, therefore, to hear Mackay talking up other emerging markets at CAGNY last week.
Africa stole the show, with a speech at the conference by SABMiller’s Africa MD Mark Bowman, but Mackay also spoke of improving profitability in China and the firm’s success in building a premium lager segment in key Latin American markets.
Headline figures from SABMiller’s third quarter point to the promise that these markets are showing promise, despite the global economic mire. Volumes rose by 7% in Africa, excluding South Africa, by 4% in Latin America and by 6% in China, the group reported.
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