How do you have the beer and drink it too? That’s a problem that United Breweries, the maker of the leading beer brand Kingfisher, was left facing.
In an unexpected development, the Bihar government had announced total prohibition in the State.
This came in the most unexpected manner.
Only last year, UB had set up a greenfield production facility in the Naubatpur region of Bihar at an investment of over ₹100 crore.
The facility was set up to enhance the company’s competitive position in the region, according to comments made by senior company executives at that time.
Another development was that only a few days before the prohibition order, there were 600 new licences issued to retail partners to sell spirits in the State, Samar Singh Sheikhawat, Senior Vice-President, Marketing, United Breweries, told a gathering of advertising professionals at the opening session of Goafest 2016, the Indian advertising and marketing fraternity’s largest annual gathering.
However, there was a silver lining.
Despite prohibiting sales of liquor in the State, the government had not stopped production within Bihar.
To make the most of the situation, the United Breweries team is now putting into action a plan where they can source from production facilities in Bihar and supply to States like Uttar Pradesh, Jharkhand and other parts of the country.
In order to keep pace with the regulatory developments, the company is also reallocating its sales force from Bihar into the neighbouring States and so on.
In the last financial year, United Breweries sold volumes of 147 million cases (12 mio HL), accounting for 51 per cent of the total market, according to the company’s internal estimates.
In the premium beer segment, despite the aggressive presence of all the major international brewers in the country, the company claims to have increased its share year-on-year and says that its size is more than double of the nearest competitor.