India: Carlsberg reports 2% volume decline in India due to taxes and highway sales ban

Danish brewer Carlsberg said the new goods and services tax and highway ban resulted in a 2% decline in volume in India, the Economic Times reported on February 7.

"2017 was a very volatile year for our Indian business due to the highway ban and the introduction of GST. Consequently, our volumes declined by 2%," Carlsberg said in a statement adding that the decline was still less than the overall market.

The maker of Tuborg beer had posted 16% volume growth in India in 2016, a year that also had regulatory issues including alcohol ban in the state of Bihar. In April last year, a Supreme Court order forced nearly a third of all outlets to shut shop last month and a significant portion hasn't re-opened or relocated yet.

However, Carlsberg, the world's third largest brewer, said it grew its share during the year. "We further strengthened our market position, reaching an estimated 17% market share for the year. In spite of the volume decline, our profitability strengthened," said the statement announcing its annual financial performance of a 2% volume decline despite revenue increase by 1%.

In 2016, the brewer had 16% market share in India backed by Carlsberg Elephant and Tuborg in a market skewed towards strong beer. Just last month, it set up its eight brewery in the country.

Last year, the company also named Nilesh Patel as new managing director for India, replacing Michael Jensen who was at the helm since 2012.

Heineken, Anheuser-Busch InBev, and Carlsberg - which together control about 90% of India's beer market - introduced about a dozen new beer brands to fend off sales bans in a few states, shrinking store networks and stagnant demand in a warm, tropical country with promising demographics and increasing affluence. India is largely a whiskey and spirits dominated market and per capita consumption of beer in India is about 2 litres per person a year, which is little compared with the global average of about 30 litres. And strong beer segment accounts for about 80% of the market.

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