Scottish & Newcastle eyes rapid growth in Asia
Brewer Scottish & Newcastle Plc expects quick growth in India, China and Vietnam, with its ventures in these markets contributing a larger share of its overall revenue, a senior company official said.
S&N, the biggest brewer in Britain, France and Russia, also expects rising incomes and changing consumer behaviour will spark demand for premium international beer in the Asian markets, John Hunt, S&N's managing director for Asia, said late on Thursday.
S&N holds 37.5 percent in India's top brewer United Breweries Ltd and has a venture with China's Chongqing Brewery Co.
In Asia, our focus markets are China, India and Vietnam, and they are all important and relevant to our business, Hunt said on the sidelines of a UB news conference.
They are similar in that they have strong GDP growth, greater purchasing power, a young demographic and a change in social attitudes toward drinking, he said.
In contrast to slowing growth in several western markets, UB expects India growth in excess of 20 percent annually.
Local brands dominate in the Asian markets that S&N is present in, so the brewer has chosen to do ventures with local partners and will introduce its own premium brands later.
Look at Russia, a massive market... it has evolved from being a market of local brands to one that has many foreign brands, Hunt said.
S&N jointly owns Russia's leading brewer Baltika with Danish brewer Carlsberg, where it has forecast growth to be in the range of 11-13 percent in 2007.
In China, international beer brands have only a small part of the premium market, but in Vietnam they have about 15-20 percent of the premium market, he said.
Consumption of beer per person in India, where production, sale and advertising are tightly regulated, is just 1 litre, compared with an estimated 24 litres in China.
UB has more than half the Indian market, with SAB Miller controlling a third. Anheuser-Busch Cos and Diageo Plc have also entered the market where imported beer brands have less than 0.5 percent.
S&N's revenue from Asia makes up just under 10 percent of its overall revenue, Hunt estimates, but it will climb quickly.
Our ambition is to make Asia a material part of our business, he said.
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