India: SABMiller India introduces a new managing director

Beer giant SABMiller has named Paolo Lanzarotti to head its Indian operations as managing director, at a time when the world’s most ‘aggressive brewer’ deals with a critical phase in its local operations, The Economic Times posted on October, 9.

Mr Lanzarotti moves into the fastest-growing and possibly the most difficult beer market, after spearheading the brewer’s operations in Slovakia.

Mr Lanzarotti replaces Jean Marc Delphon de Vaux, who left SABMiller a few months back, even as the brewing giant’s market share suffered sharply due to a combination of factors. India’s second largest brewer after United Breweries (UB) will now also have to reckon with global peers like Carlsberg and Budweiser who have gradually begun making inroads into the domestic market.

SABMiller’s fourth MD in a little over ten years will take on the reigns when the world’s second largest brewer, after the two global rivals Anheuser-Busch and InBev merged, needs proactive leadership in India.

A top honcho at a rival beer firm said that SABMiller’s greatest need was a visible face at the lead to battle complexities of the Indian market. Barring Richard Rushton, during whose tenure the company effected significant buyouts to emerge as number two, no other managing director has held a high-profile stint in this latent beer market, he added.

Industry estimates suggest that SABMiller, which held over 36% of national beer volumes, has seen its market share slump below 30% following a deadlock with state authorities in Andhra Pradesh and Uttar Pradesh. It had also exited a contract-bottling arrangement with an associate of Mohan Meakin in Tamil Nadu, another key market.

SABMiller emerged as India’s second largest brewer after snapping up Shaw Wallace Breweries, the makers of Haywards 5000 strong beer and Royal Challenge premium lager, in 2003. Subsequently, it went on to acquire Foster’s India operations to bolster its portfolio, in effect raising a challenge to UB’s stronghold.

At this point, Mr Lanzarotti’s immediate concern would be to regain momentum and prevent ceding of ground to new rivals such as Carlsberg. India’s beer consumption was estimated at 174 million cases (of 7.8 litre each), or 13.75 million hectolitres, making it possibly the eighth largest market in Asia in FY09.

However, the domestic per capita consumption of the beverage is only at 1.3 litre compared to 78 litre in Slovakia, which has a population significantly lower than Bangalore metro.

09 October, 2009