GRIN AND BEER IT
Global biggies queue up to start breweries in Bihar, spurred by rising local demand and future prospects
Bihar’s growth fizz is extending to breweries too. Biggies, including Carlsberg, NRI beer baron Karan Bilimoria as well as embattled liquor king Vijay Mallya, are lining up to enter the state and start beer units. They are eyeing Bihar as a base for the eastern region.
On February 15, Molson Coors Cobra India, a joint venture between Bilimoria’s Cobra Beer and Molson Coors, started production at their unit in Bihita, 40 km from Patna, after taking over a local brewery. The company plans to ramp up production capacity from 3,00,000 beer cases a month to 5,00,000 cases. The United Breweries ( UB) Group promoted by Mallya, which has more than 50 per cent share in the Indian beer market, is also in the process of setting up a unit in Naubatpur, says C.K. Mishra, Bihar’s principal secretary, industries. Carlsberg India, a unit of the Danish Carlsberg Group, has also started the process of setting up a production unit in Bihar, its sixth in the country. “They are looking for a suitable location,” says Mishra. “This is neither sudden nor surprising,” adds the IAS officer. “Reasonable labour rates, easy availability of raw materials, improved law and order and investment-friendly policies are key drivers that have brought these big names to Bihar.”
Smaller players are also getting into the act. “In March-end, we approved three proposals from smaller groups to set up breweries,” says
THE INCREASE IN BEER BREWERIES IS LIKELY TO GIVE A FILLIP TO BARLEY CULTIVATION IN THE STATE.
Mishra. The State Investment Promotion Board has already approved 28 proposals for setting up distilleries, 25 of them part of proposed sugar mills and three standalone ones.
There is a growing local demand for beer within the state although the consumer has shown a marked preference for Indian Made Foreign Liquor ( IMFL). Beer sales in Bihar have risen tenfold over the last six years, touching a high of nearly 60 million litres in 2010-2011. The strong beer segment dominates beer consumption with a 76 per cent market share. While beer sales, according to Bihar State Beverages Corporation figures, have dipped this fiscal to 37 million litres till February end, the state’s earnings from country liquor and IMFL have risen from Rs 249.67 crore in 2001-02 to Rs 1,542.25 crore in 2010-11. Bihar has five liquor outlets per 1,00,000 people compared to Delhi’s 300. Per capita liquor consumption in Bihar is five cartons per 1,00,000 people, while it is 111 for Delhi. But with growing urbanisation—currently at 11 per cent of the population of roughly 82 million— and rising per capita income, from Rs 10,055 in 2006-07 to Rs 16,119 in 2009-10, the consumer base for beer is on an upswing.
The potential expansion in beer units is also likely to give a fillip to cultivation of barley in the state. Though Bihar’s climate suits barley cultivation, farmers have slowly turned away from the crop in the absence of takers. This has resulted in a shrinking of area under barley cultivation to 1,15,000 hectares in 2009-2010 from 2,15,000 hectares in 2000-2001, according to the Bihar Economic Survey
2011-12. Barley productivity, however, has increased from 1,186 kg/hectare in 2000-2003 to 1,189 kg/hectare in 2007-2010. Bilimoria, who plans to set up at least 10 breweries in the state, currently uses barley from Haryana at his Bihita unit but says he would prefer to source it from the local market in order to cut production and shipment costs. Bilimoria, and Bihar, can hope for better days.