E-Malt.com News article: India: Water pollution hits Andhra Pradesh division of United Breweries

Concerns over water pollution have hit one of the key plants of United Breweries (UB) in Andhra Pradesh, the biggest market accounting for 18-20% of India’s beer consumption. The state government has directed UB to significantly ramp down production at its brewery in Nacharam, near Hyderabad.

Beverage bottling plants have been increasingly coming under the scanner either on charges of pollution or groundwater depletion. The most famous instance is the troubled Coca-Cola plant near Palakkad in Kerala, which, despite a favourable court order, shut down after earning the wrath of the local community.

The UB plant has a monthly capacity of 5 lakh cases (7.8 litres each) of beer, which has now fallen to 1.5 lakh cases. This has prompted UB to consider shifting the brewery out of Nacharam Industrial Estate, which has attracted a public interest litigation on pollution. Nacharam is buzzing with activity, with several townships and residential pockets coming up in the vicinity, sources said.

AP Pollution Control Board confirmed that it had directed the UB unit to limit production from March. The move comes right in the middle of the peak consumption season for beer with Andhra Pradesh projected to guzzle a record 35 lakh cases in May.

“The discharge from our plant is well below the permissible levels. We have ramped down production pending a final decision. We will consider shifting the brewery in mutual consultation with the Andhra Pradesh government if we cannot take production back to normal level, as we don’t want our investments to be idle,” UB CEO Kalyan Ganguly told ET.

The brewery is critical to UB as the conglomerate is locked in a grim battle with rival SABMiller in Andhra Pradesh. UB has another plant with a monthly capacity of around 4 lakh cases at Srikakulam near coastal Andhra. But with the market growing in robust double-digits, UB said it has contracted about 1.75 lakh cases monthly capacity with Crown Beer near Hyderabad. Incidentally, American giant Anheuser-Busch holds 50% stake in Crown Beer.

Still, UB is expected face pressure on the supply side given the market growth and SABMiller’s 14-lakh case monthly capacity at Charminar Breweries. Andhra Pradesh has not been an easy market for industry leader UB, which saw rival Shaw Wallace Breweries gain an upper hand in the late 90s. SABMiller, which acquired Shaw Wallace, consolidated the leadership with over 60% share of beer sales in the state.


06 June, 2007