INDIA – Dutch multinational brewing company Heineken has added India’s United Breweries Limited (UBL) to its expansive portfolio of brewing companies.
The announcement by Heineken follows a recent annual general meeting where the company notified shareholders that it had obtained control of UBL after taking its shareholding from 46.5% to 61.5%.
UBL has a proud history dating back more than a century in India’s beer industry and is currently the undisputed market leader in the country with a population of more than 1 billion people.
The company has a strong network of breweries across the country and a fantastic portfolio led by its iconic Kingfisher brand family, complemented more recently by a strong HEINEKEN international brand portfolio.
“We are honoured to build on this legacy and look forward to working with our colleagues at UBL to continue to win in the market, delight consumers and customers and unlock future growth,” said Dolf Van Den Brink, Heineken Chairman and CEO.
India offers an exciting long-term growth opportunity as per capita beer consumption is low at 2 litres per annum.
Research and Markets notes that in terms of volume, the beer market was valued at 5,533.73 Mn litres in 2020 and is expected to expand at a (CAGR) of ~10.89% during the 2021 – 2025 period to reach 9,004.74 Mn litres by 2025.
The market research firm notes that urbanization and change in societal perspectives, along with the launch of new low- and no-alcohol variant beer, technological advancements are a few of the significant factors that propel market growth.
Heineken notes that the country’s growing population of nearly 1.4 billion people includes a strong emerging middle class, enabling further premiumisation.
However, there are some challenges also as the distribution of beer in India is still largely controlled by the state or state-owned corporations, resulting in stricter regulations across various states so as to have better control over prices, consumption and excise duty.
Following the acquisition, UBL will be a top HEINEKEN operating company and Kingfisher a top 5 global brand.
HEINEKEN expects the consolidation of UBL will have a small accretive effect on EPS (beia) and a dilutive effect on operating profit margin (beia).
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