Denmark & India: Carlsberg to set a joint venture with leading business conglomerate Khetan Group

Carlsberg A/S, which makes the Tuborg and Baltika brands of beer, is considering setting up a unit in India to sell its brew in the world's second-most populous nation, a market vacated by Foster's Group Ltd. last week, Bloomberg reported August 07.

Carlsberg is evaluating the market, spokesman Jens Peter Skaarup said. Nepal's Khetan Group, which has a joint venture with Carlsberg, may provide management help to the Indian unit, Khetan Executive Director Rajendra Kumar Khetan said August 07. Khetan won't have a stake in the India venture.

Valby, Denmark-based Carlsberg, which produced its first beer in 1847, is seeking to enter developing countries as sales in its key markets slow. The company's volume of beer sold in Western Europe, which generates about 70 percent of its revenue, fell 4 percent in the first quarter and may continue to stagnate, according to Chief Executive Officer Nils Smedegaard Andersen.

“Carlsberg considers the Indian market very interesting and with very significant growth potential,'' Skaarup said. “The evaluation includes market research, general economical analyses, meetings. No final conclusions have been made yet.''

Carlsberg's shares fell 5 kroner, or 1.1 percent, to 439 kroner at 11:25 a.m. local time in Copenhagen. The stock has risen 30 percent this year.

Carlsberg is considering setting up a joint venture in India with the Khetan Group, the Economic Times newspaper reported August 07, citing people it didn't identify. Carlsberg may consider expanding into India, Andersen said in June, without giving more details.

Restrictions

The Khetan Group won't take a stake in the India venture as the Nepal government doesn't allow its entrepreneurs to invest overseas, Khetan said. He didn't elaborate on the role the Nepal group will play in Carlsberg's India operations.

“We are in the process of consultation,'' Khetan said. “We know the South Asian market, we know the culture here and we know how to do it.''

Melbourne-based Foster's Group, the world's second-largest winemaker, sold its beer units in India and Vietnam for $225 million on Aug. 4. London-based SABMiller Plc, the brewer of Pilsner Urquell, is buying the Indian unit for $120 million and will gain ownership of the local brew Amberro and the Foster's brand in India.

Carlsberg will compete with United Breweries Ltd., which owns India's biggest beer brand Kingfisher. Beer accounts for about 10 percent of alcohol sales in the nation, Asia's fourth- biggest economy.

Shares of United Breweries fell 2.15 rupees, or 2 percent, to 99.9 rupees at 12:18 p.m. local time on the Bombay Stock Exchange. They declined as much as 3 percent earlier August 07.

Bangalore-based UB Group and Edinburgh-based Scottish & Newcastle Plc, the U.K.'s largest brewer, each own 37.5 percent of United Breweries.

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