Asia Pacific Breweries plan contract farming

Speaking to Business Standard, APBL South Asia regional director and group business development director Vivek Chhabra said APBL was exploring the possibilities of contract farming in north India, particularly in Rajasthan, to reduce the imports. "We will provide quality seed and technology for barley farming,'' he said.

APBL currently imports yeast that is cultured in Holland, hops from Europe and malt from Australia. The company rejected Indian barley as it did not meet the international manufacturing standards that are followed at other breweries of the APBL abroad.

He said APBL would continue to source yeast, which gives beer its character, and hops, the female flower cones used for flavouring and as a stability agent in beer, to maintain the taste for a particular brand of beer across the countries.

The rise in prices of agri-products has resulted in beer production costs going up by 20 per cent in recent years. While malt price went up 60 per cent, hops price increased seven times, he informed.

APBL, formerly Malayan Breweries, aims to capture the nascent premium beer segment through its Tiger beer. Earlier, Tiger beer was imported and sold at exclusive outlets but now it is being produced at its Auranagabad and Sangareddy (Medak district in Andhra) breweries for supply in India. APBL has about 40 beer brands and intends to bring them all in the Indian market depending on the demand.

The beer market is estimated to be 175 million cases in India of which premium beer contributes to less than one per cent (about 1 million) of the total demand. "India, in about five years, would be the third largest market for beer after China and Japan,'' he said, adding Andhra Pradesh, despite high taxes and high prices, would be an important market accounting for about 15 per cent of the total sales.