In less than a decade of its entry, Danish brewer Carlsberg has turned profitable in the Indian beer market, posting its first profit in the October-December quarter on the back of rising demand for its strong beer brands.
“Our Indian business grew 42% in a slightly growing market. The business also delivered a significant earnings improvement, and for the first time turned profitable,” Carlsberg CEO Cees’t Hart said in an investors call on Thursday. “This was driven by a combination of volume growth and tight cost control,” he said.
Unlike most global markets where its top seller is the milder version of the eponymous lager, Carlsberg’s Indian unit has been focusing more on strong beer such as Tuborg Strong and Elephant because strong beer accounts for 80% of overall beer volume sales in the country.
The company also claimed that it is now the second largest beer maker in the country.
“Tuborg has higher volume than Carlsberg. Carlsberg generally is higher priced than Tuborg, so in terms of value the difference between Tuborg and Carlsberg is relatively modest,” Hart said. “As the positive result of the strong Tuborg growth, we are now the number two player in the country both as a company and for the Tuborg brand.”
Until a year ago, United Breweries controlled 51% share in the market, followed by SabMiller at 23% and Carlsberg with 15% share.
Carlsberg, which entered the country in 2006, invested Rs 200 crore in the market two years ago in a bid to ecome a big player in the India’s increasingly competitive beer market.