India: AB InBev launches India’s highest-priced strong beer Budweiser Magnum

The world's largest brewer AB InBev has uncorked Budweiser Magnum, positioning it as the highest-priced strong beer in India, The Economic Times reported on June, 4.

An India-specific innovation, Budweiser Magnum is priced at Rs 150 for a 650 ml bottle in Maharashtra. Its launch comes a year after Carlsberg's super-premium strong beer Elephant, priced at Rs 135 for a 650 ml bottle in the same market.

Magnum has been launched to appeal to strong beer guzzlers who want to trade up, industry insiders say. AB InBev India confirmed the launch but was denied comment.

The premium strong beer segment has seen several new entrants in Carlsberg's Tuborg Strong and SABMiller's Foster's Strong.

India, unlike other beer markets, is unique because strong beer (with alcohol content higher than 5%) dominates consumption. Carlsberg's MD Soren Lauridsen says between January and April 2012, strong beer's contribution expanded from 80% of the market to 85%.

"Mild beer is stagnating and much of the growth is coming from the strong beer segment," Lauridsen says.

But some rivals are not convinced by Budweiser Magnum's price positioning. "If it does well, however, it would open a whole new price category for Indian beer," a senior executive at a rival firm, says.

Anheuser-Busch pitched its presence in one of the fastest-growing beer markets in the world by launching Budweiser in Andhra Pradesh in 2007. The following year, InBev launched Tennet's beer in a joint venture with PepsiCo's bottler Ravi Jaipuria.

When the two giants merged globally in 2009, AB InBev became a 49:51 joint venture with Jaipuria's RJ Corp. The joint venture operates two breweries in India, across Hyderabad and Pune.

The $39-billion AB InBev also makes brands such as Stella Artois, Hoegaarden and Leffe, which are currently imported by the Indian arm.

United Breweries' Kingfisher is the market leader in the Indian beer market, which has been growing at around 13% in recent years. Last fiscal it slumped to 3-4% growth, its slowest in the past eight years, hurt by high taxation in several large markets.

06 June, 2012