Diageo is considering plans to brew its stout brand Guinness in India.

The move could see the cost of the beer, which was last produced in South Asia in 1999 by the Ceylon Brewery - now Lion Brewery Ceylon, drop markedly in the Indian market, the company said today (30 November).

Diageo India's managing director, Adil Asif, said: "We are in negotiations with a few local breweries as the beer can be manufactured and sold much cheaper here." Asif declined to give more specific details, but noted that, while a 330ml can of imported Guinness currently costs INR450 (US$11.35), if brewed locally, a 750ml bottle could sell for under INR100.

On a monthly basis, Diageo sells around 300,000 750ml bottles of beer, including Red Stripe and Masterstroke, at present, while India's total monthly beer consumption is around 145m bottles.

Asif is hoping the move will up Diago's share of India's beer market to around 7%.

South Asia Breweries, a joint venture between Carlsberg and Lion Brewery Ceylon, is in the process of building two new plants in Rajasthan. The company, which ceased brewing Guinness due to the then-small size of the market, expects the facilities to be fully operational by mid-2008 and have a collective annual capacity of 450,000 hectolitres.