SABMiller is to up its investment in India. The brewer said today (14 June) that its Indian subsidiaries intend to commit in excess of US$125m in capital expenditure and marketing initiatives over five years to expand current operations and further develop market-leading brands in the country.

The company recently announced that its Indian subsidiary, MBL Investments, has acquired the Shaw Wallace Group's residual interest in the brewing operations of SABMiller's Indian joint-venture.

The group's brewing operations comprise 10 breweries across the subcontinent constituting India's second largest brewer. Its key brands include Hayward's 5000, the leading beer brand in the strong beer segment; Royal Challenge Premium Lager, the second-largest mild beer in the country; Knock-Out and the international premium brand Castle Lager.

In a statement, Graham Mackay, SABMiller's chief executive, said: "It is widely known that India is a rapidly expanding economy and represents an exciting growth opportunity for SABMiller. We firmly believe that a vibrant beer business will not only contribute significantly to the economic development of the country, but a well regulated industry will encourage responsibility in the consumption of alcohol throughout the subcontinent. This can only be achieved, in our view, by working with the Indian authorities to reform the prevailing structure and reduce the complexity of the restrictions that are currently in place."

André Parker, managing director of SABMiller Africa & Asia, added: "Climatic conditions in India are more suited to drinking beer, which is seen as a healthier alternative, than other alcoholic beverages. While the Indian beer market has been growing at 6 to 7% annually, SABMiller's brewing operations in the country have recorded a much higher growth rate of 12% in the last year. With the further investment we are able to upgrade and expand existing breweries, develop our brands and increase the standard of the barley farming industry through co-operative initiatives."

During a visit to group operations in India this week, Mackay will meet with government officials and industry leaders to discuss SABMiller's involvement in India. He will also inaugurate the completion of a US$14m upgrade programme at the state-of-the-art brewery in Hyderabad as well as visit local communities.

SABMiller has operated in India since October 2000, when it bought the Narang Breweries, located near Lucknow, in the state of Uttar Pradesh. In June 2001, SABMiller acquired a controlling interest in Mysore Breweries Limited. Subsequently, Mysore has made other acquisitions in other brewing operations in India and later in May 2003, Mysore entered into a strategic 50:50 joint venture with the Shaw Wallace Group.

The Indian brewing industry is highly regulated and beer is categorised with other alcoholic products for licensing and taxation purposes.