Anheuser-Busch enters India with joint venture

Thursday, February 22, 2007; 7:58 AM

NEW YORK (Reuters) - Anheuser-Busch Cos. Inc. (BUD.N), the largest U.S. brewer, said on Thursday it formed an equally owned joint venture with India's Crown Beers to brew, market and sell Budweiser and other beer brands in India, where incomes and the market for alcoholic drinks are growing.

The joint venture will be called Crown Beers India Ltd. and will employ more than 150 people with one brewery in Hyderabad, the company said. The brewery will be completed in March.

In October, India's Economic Times broke news of the deal, citing unidentified sources, who said then that Anheuser-Busch was expected to invest 1 billion Indian rupees ($22.7 million by today's conversion) in the venture.

Anheuser-Busch on Thursday did not disclose terms of the deal.

Earlier this month a Brazilian newspaper reported that Anheuser, which has seen its dominance at home challenged by imports like Grupo Modelo's (GMODELOC.MX) Corona, was in merger talks with Belgium-based InBev (INTB.BR).

Several beer, wine and spirits makers are jostling for space in the India, where more than half of the 1.1 billion population is below the age of 25.

India's United Breweries Ltd. (UBBW.BO), with joint venture partner Scottish & Newcastle Plc (SCTN.L), dominates the beer market with well-known brands such as Kingfisher.

SABMiller Plc (SAB.L), the world's second-biggest brewer, controls about a third of the market, having bought the Indian business of Australia's Foster's Group Ltd. (FGL.AX), including the Foster's brand, last August.

Annual beer consumption in India is estimated at only about one liter per person a year, compared with about 84 liters a person in the United States.

Even though many in the country still frown on drinking alcohol, about 220 million cases of beer and branded liquor were sold there last year and annual sales of alcoholic beverages are growing by about 20 percent annually.

($1= 44.14 rupees)

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