SAB, the UK-based beer giant, is reported to be in talks with another Indian brewer over a possible acquisition, following its recent deal to buy Mysore Breweries.

The operation at the centre of the latest reports is the Srikakulam brewery, owned by the GMR Group and based in Anehra Pradesh. Mysore is based in Uttar Pradesh.

A spokesman for SAB told just drinks that at this stage the stories in India's business press were merely "speculation and rumour", however he confirmed that SAB was "continuing to look at options in India."

The Deccan Chronicle last week said GMR was asking Rs55 crore (US$12m) for the brewery, which has a capacity of 1.5m cases per annum.

The brewery currently manufactures exclusively for Shaw Wallace and Co. However GMR recently applied to the State government to increase its brewery capacity to 3m cases as Shaw Wallace increases its own reach into the region. The feeling is that Shaw Wallace may no longer require Srikakulam operations and GMR is looking to exit the business altogether.

If SAB was to acquire Srikakulam, it would have a good base in Andhra Pradesh as well as in north India through its Mysore Breweries, to help push its brands.