E-Malt.com News article: India: Cobra Beer to revive its operations under Molson Coors ownership

After floundering in the Indian marketplace for a few years, Karan Billimoria’s Cobra India has prepared a blueprint to revive its operations in the country. It will not only get its existing operations up and running, but plans to grow its business beyond the six states it is present in as North American brewing major Molson Coors had picked up a majority stake in the company last week, Business Standard communicated on June, 29.

“The immediate priority for us is to commence existing operations after almost a six-month standstill,” said Ravi Kaza, president, Molson Coors Cobra India, the newly-formed joint venture. The new entity has brewing rights for Cobra beer in India, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.

The $35 million (Rs 158 crore) pumped in by Molson Coors is expected to help Cobra tide over its fund requirements towards working capital and debt retirement. The privately-held Cobra has debt in excess of Rs 10 crore, which will now get cleared following the stake sale. “As a debt-free company we should be able to manoeuvre our efforts better towards market expansion,” said Kaza.

Full-year sales of Cobra were down to by a third for the year ended March 31, 2011 from 10.66 lakh cases a year ago. With operations back on track, Kaza said the company will be in a better position to push up sales.

Cobra has presence in Bihar, West Bengal, Orissa, Andhra Pradesh, Delhi and Haryana with two brands — Cobra Premium and King Cobra Superior. A third brand Iceberg 9000 is available in only in Bihar. It also has a brewery located in Bihar and three tie-ups with third-party manufacturers for the remaining states it operates in. Kaza said the firm will look at either acquiring local breweries or greenfield projects or tie-ups with third-party manufacturers in its drive to expand beyond the six states. “But that will come a bit later.”

The joint venture is not likely to hasten the introduction of Coors’ brands in India. “That will happen over a two to three year horizon. They will be positioned as premium brands.” The North American brewing major is the fifth-largest in the world. Its brands include Coors Light, Molson Canadian, Carling and Blue Moon, among others.

Cobra is a brand popular in the UK, especially at Indian curry restaurants. The brand was introduced in India in 2002, but soon found the going tough amid stiff competition from both national and regional players.

United Breweries has volume sales of 116 million cases, followed by SABMiller at 55 million cases and Punjab-based Mount Shivalik at eight million cases. The overall beer market in India stands at 250 million cases, growing at a rate of about 12 per cent per annum. Unlike other countries, the market in India is dominated by strong beer, which constitutes 80 per cent of the market. Mild beer makes up for the rest.


29 June, 2011