Franchise News India: Pakistani retailers expanding to India is no big news these days. But, when its a Pakistan-based brewery that is about to “taste” Indian waters, that does turn many heads. The Indian media reported last week that Pakistans “Murree Brewery Company Limited” was planning to sell its beer in India.
Now, Murree Brewery has a historic element to add to its beer. The company is the oldest Pakistani firm alive. Its an enterprise that has accumulated more than 150 years of brewing experience, a timeline during which it survived the Indo-Pak partition, witnessed so many regime changes and braved politico-religious whirlwinds.
The British–which had established this brewery in 1860 in Ghora Gali, Murree–sold its majority shares to the renowned Bhandara family, whose third generation is now running the firm. The brewery is listed on the KSE under the moniker MUREB, and has a market capitalization of Rs7.6 billion.
Facing the liquor export ban since 1977, Murree Brewerys alcoholic beverage sales–which include a range of beers, whiskeys, rum and vodkas–are restricted to a tightly-regulated domestic clientele (hotels and wine shops). Over the years, it has diversified into non-alcoholic beverages like synthetic drinks and mineral water. Its subsidiary, Top Foods, makes jams, marmalades, vinegar, juices and squashes.
Talking to BR Research, the companys CEO Isphanyar Bhandara explained that the brewerys outreach to India was at a preliminary stage, and, therefore, one can put a number as to how much MUREB will earn from franchising in India. “To get over the exporting handicap, we are deploying the franchise model to make our beer products accessible in India. The formulaic composition and brand name will be ours, and bottling and distribution will be done by our franchisee in India.”
Indias rapidly growing beer market is bound to spark brewers interest. A Reuters report in September noted that one-third of Indias 1.1 billions population was regular drinkers, and this number is expected to grow due to urbanisation, youth bulge and expanding middle class. Mintel, a London-based research firm has estimated that Indias retail beer market will double in size to 430 billion Indian rupees by 2017.
Similarly, the UBS Globals 2013 “Beeronomics” report placed India among top 25 beer markets in the world, with its per capita beer consumption set to grow 13 percent annually–from 2 liters in 2012 to 3 liters in 2016. The report highlighted that Indias beer consumption per capita was way lower than its BRIC counterparts because of low affordability of this drink among the masses.
After Austria and the Czech Republic, India would be Murree Brewerys third international franchising venture. Bhandara mentioned that the Indian franchise would be based out of Bangalore, which is Indias third-most populous city with nearly 10 million inhabitants. The Indian Punjab is also a potential market, he informed, “thanks to high consumption of beer among the Sikh community living there”.
Besides the business proposition, he stressed that this venture represented an opportunity to project a soft, benign image of Pakistan abroad. At the same time, he asked the government to remove the policy dichotomy vis-à-vis liquor exports. “On one hand, Pakistan is exporting thousands of tons of ethanol, which is 99 percent alcohol. But exporting it in the form of an alcoholic beverage is a taboo.”
If all goes well, Bhandara said that Indian beer lovers should expect to taste Murree beer from next year. One hopes that Murree beer is able to differentiate itself in a market that is dominated by beer barons such as Indian-origin Kingfisher and the multinational SAB Miller. Towards that end, this franchise operation would do well to take into account Indians thirst for strong beer at an affordable price.
Source: brecorder
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