India: Carlsberg’s Indian business enjoys 19% volume growth last year

Danish brewer Carlsberg said Indian business grew 19% by volume due to lower base and strong demand for the eponymous brand, the Economic Times reported on February 7.

"Our Indian business had an excellent year following a challenging 2017 that was impacted by the highway ban, GST and tax increases. Our volumes grew by 19% and price mix was 7% due to the strong growth of the Carlsberg brand and improved pricing," Cees ’t Hart, global chief executive officer at Carlsberg said on an investors call.

Over the past two years, there has been policy changes in West Bengal, Chhattisgarh and Jharkhand to allow liquor sales only through government-owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu. Supreme Court restrictions on the sale of alcohol near state and national highways led to the closure of about a third or about 30,000 of the country’s liquor vends, causing a drop in demand for beer and spirits. The court subsequently clarified its ruling, easing conditions for liquor sales and allowing many outlets to reopen.

The company said profitability improved considerably due to the volume growth, positive price mix and supply chain efficiencies following the opening of the Karnataka brewery. Carlsberg, the world's third largest brewer, became profitable three years ago in India and expects profits to grow further.

"At the moment the price mix is good. As we get the throughput of the volumes around breweries, the profitability improves. So where we were breakeven three years ago, we really now are in double digit EBIT margin position in India," Hart told analysts.

The brewer has about 18% market share in India backed by Carlsberg Elephant and Tuborg in a market skewed towards strong beer segment that accounts for about 80% of the market. In India, Tuborg accounts for more than two-thirds of the company's annual sales.