UK & India: BrewDog closes two flagship bars in Mumbai in a blow to India expansion

BrewDog, the UK’s biggest craft beer brand, has closed its two flagship Mumbai bars, in a blow to its plans to scale up in the country and tap the growing number of drinkers, the Financial Times reported on November 19.

The BrewDog bar in Bandra West, a suburb that is home to many Bollywood stars and is known for its liberal nightlife, as well as its bar in the office district of Lower Parel, have been closed since the summer.

The company’s logos have also been taken down from the locked-up properties, according to checks by the Financial Times. BrewDog now has only two bars open in India, having first set up there in 2021.

Pratekk Chturvedi, a director of Aloha International Brewpub which operates the BrewDog India franchise, told the FT that the landlords had wanted the bars to close and that the franchise operator had filed legal cases to reclaim “business losses that we are facing”. BrewDog declined to comment.

Even before the closures, BrewDog had struggled with obtaining consistent beer supplies in India’s financial capital. Chturvedi, who is also chief operating officer of BrewDog India, said that the brewer had also faced issues with the department that regulates and taxes alcohol in Mumbai’s home state of Maharashtra.

“Mumbai was an extremely important market for us, it is ground zero, it is where we began,” Chturvedi said. “I am fairly certain that in the coming time, maybe in the next, say, three to four quarters, we will find a new location and start up in [Mumbai] again.”

BrewDog’s Mumbai setback illustrates the difficulties faced by alcoholic drinks companies in India, even as drinking has become more acceptable in a country where it has typically been frowned upon and consumption heavily regulated.

In April, a brewery owned by Heineken’s Indian business, United Breweries — which is the country’s biggest beermaker and the producer of Kingfisher lager — was raided by authorities in the southern state of Karnataka.

United Breweries’ chief executive Vivek Gupta told the FT that “excessive” regulatory action and the patchwork of different rules across India’s states and territories, some of which prohibit the sale of alcohol, were hurting sales in a “priority market”.

The closures are also a setback to BrewDog’s plans for overseas expansion. Only last year, it announced plans to open 100 bars in India over the next decade.

Chturvedi said the Mumbai closures were only a blip in BrewDog’s India plans. He added that the local franchise was operationally profitable and would focus on the country’s north where it had two bars in the cities of Gurugram and Amritsar.

“We are looking at aggressive expansion in the coming year . . . we are looking at one opening every quarter,” Chturvedi said, adding that a new bar would open in Chandigarh in the coming weeks.

“India is a booming craft beer market,” he said. “It is a very lucrative, very profitable market.”

James Watt, BrewDog’s founder, stepped down as chief executive in May after he was accused of overseeing a “toxic” workplace culture. In its most recent results, the company reported an almost doubling of losses to £59.2mn in 2023.

19 November, 2024