Cobra Beer looks for tie-ups to expand India business

By Gyanendra Kumar Keshri, IANS,

New Delhi: Cobra Beer, which has invested over $30 million in India so far, plans to double the production capacity of its Bihar unit within two years and expand business in other states through tie-ups, says the company’s India-born, London-based founder and chairman Karan Bilimoria.

Support TwoCircles

“Our Patna brewery can currently produce nearly 2.5 million cases a year. We are about to expand it. In a year or two, we plan to increase its capacity to five million cases a year,” Bilimoria told IANS in an interview.

He said the company planned to expand its business in other states in India through tie-ups and joint ventures.

“We started our business in India in 2002. Over the past eight years, we have invested over $30 million here. I am looking for more tie-ups in other states. Our aim is to have pan-India presence,” said Bilimoria.

Cobra owns a brewery in Bihar. It also brews beer in partnership with local companies in several other states like Andhra Pradesh, Orissa, Madhya Pradesh, Rajasthan and Goa.

Urging the government to rationalise duties and provide a level playing field, Bilimoria said the Indian beer market should be 25 to 30 times bigger than the current size.

“Today, beer production in India is barely one litre per person per year while in China it is 30 litres per person per year. In advanced countries like the UK and the US, it is even more,” he said.

Lord Bilimoria, a member of the Indian Prime Minister’s Global Advisory Council, said beer was not affordable to a majority of people in India because of stringent policies and irrational duty structure.

“There is no level-playing field. Every state has its own policy. India also has the lowest per capita outlet in the world – just 100,000 outlets. Countries like Britain have well over 100,000 outlets for a population of 60 million. Shanghai alone has more outlets than the whole of India,” he said.

“These things should be liberalised,” he said.

On expansion of its Bihar brewery, Bilimoria said: “It is the only brewery in Bihar. We supply to Delhi and West Bengal from there. The Bihar economy has started growing very rapidly and so is the beer market.”

Bilimoria said he was initially apprehensive about his company’s business in Bihar given the unfriendly business environment and poor law and order situation in the state.

“When I decided to buy the brewery, everybody asked me – are you sure you are going to do this? To be frank, Bihar had a very poor reputation. But I took the risk and luckily it is working,” he said, praising Chief Minister Nitish Kumar for improving infrastructure and the law and order situation.

“Things are turning around in Bihar very fast. As Nitish Kumar is re-elected, I am confident of our business growth in the state,” he added.

Speaking about his global operations, Bilimoria said Cobra Beer’s joint venture with US brewer Molson Coors had helped the company consolidate its position in the European market.

“In just 19 months, there is a marked difference. The businesses have integrated smoothly and become profitable. Now, we will be focussing on growth, especially expanding production capacities and exports,” he said.

(Gyanendra Kumar Keshri can be reached at [email protected])