UB to stir up the barrels to get its 'premium' back
United Breweries, which controls half the country's beer market, said it is trying to regain market share, especially in the premium segment, and fix the company's fundamentals amid intensifying competition and state-specific regulatory issues.
«We have a very strong innovation portfolio, but at the same time, there is enough work to be done on fixing our fundamentals and continuing to grow the business,» UB managing director Vivek Gupta said during his first earnings call after he joined the maker of Kingfisher and Heineken last month. «We are humble that we have a lot of ground to cover and put fundamentals in place.»
Gupta said company executives are meeting key stakeholders in the government and state governments to understand «how the company can ease some of the barriers in the business...»
In the July quarter, most companies in the sector, including UB and Carlsberg, blamed supply-chain issues and route to market changes for their low growth.
For instance, UB said Telangana cancelled permissions for Sunday shifts in plants, leading to capacity constraints, while inter-state sales were affected as it was not profitable to sell, given the impact of import duties.
Also, April and May volumes were impacted by administrative supply-chain issues in Karnataka which led to loss of market share. However, UB claimed it is now gradually regaining market share and will invest ₹350 crore in the current fiscal as capital expenditure.
The company has secured permission from the Haryana government to export to Delhi, and this could help exports of premium brands such as Kingfisher Ultra.
UB accounts for about half the segment followed by AB InBev, which controls nearly a fourth, while Carlsberg is the third largest player
