Significant Market Share Gain Unlikely This Year, Says United Breweries
Bengaluru-based United Breweries Ltd. said there would be no significant change in its market share this year as it recovers from the twin blow of demonetisation and a ban on sale of liquor on highways.
The country’s largest beer maker, however, said not price hikes but an increase in competition would have an impact on market share. The company’s market share increased 200 basis points in the previous financial year.
“We will introduce more brands,” Managing Director Shekhar Ramamurthy told BloombergQuint. “People no longer consume only one brand, they want to experiment.”
Ramamurthy said aggressive price hikes impact market share as well as industry volumes. But the companies need to pass on some of the cost to consumers. Alcohol makers, he said, have not been able to pass on the price hikes as liquor is a state-controlled subject.
United Breweries had increased product prices in Telangana in 2017, nearly four years later. “So, there’s not going to be significant price hikes, but modest,” Ramamurthy said.
Shares of United Breweries fell over 3 percent intra-day to Rs 1,178.50 apiece. The scrip has gained 51 percent so far in the year so far compared to a 14 percent rise in the benchmark S&P BSE Sensex.
Key highlights from the conversation:
- World Cup unlikely to have an impact on company’s business.
- Industry likely to grow 5-6 percent in 2018-19.
- Expects to grow faster than the industry in this financial year.
- Steep hike in duties in Maharashtra, West Bengal impacted sales.
- Have plans to mitigate accelerating inflation.