International cigarette brand, Cigaronne from Armania and two international beer giants, San Miguel of Philippines and Jenlain beer from the France-based Duieck stable, are gearing up for a launch in the Indian market. Anchor Beverages, part of the Calcutta based Anchor Group, has bagged the exclusive rights to market these in India.
After snapping its ties with Vijay Mallaya’s UB Group, San Miguel is again finding its way back into the Indian market. P N Das, managing director, Anchor Beverages, says, “We have entered into a exclusive distribution and marketing tie-up for selling the San Miguel and Jenlain beer brands in the country.”
Explaining the exclusive arrangement Das says that Anchor Beverages has bagged the rights after paying a royalty to the tune of Rs 4 crore for each of these brands. “In lieu of this, they are providing us with complete marketing, advertising and promotional support. The import and distribution arrangement with San Miguel and Jenlein is for a period of seven years,” he says.
Under the open general license, Anchor will import and sell these brands in India. They will be priced at Rs 35 for a 330 ml can and Rs 50 for a 500 ml can. Industry experts and analysts opine that the entry of foreign brands is due to the attractive growth rates and margins in the Indian beer industry.
Other global brands present in India, apart from Australia’s Fosters through distribution tie-ups, are Heineken, Oranjeboom and Corona. According to Das, the beer market in India is worth Rs 1200 crore. It is estimated to be over 6.7 million hecto litres and is growing at about 7 per cent annually.
On launching the Cigaronne brand of cigarettes, Das says, “We are entering the Rs 8700 crore tobacco industry in India with this unique brand of cigarettes. They are unique because in these cigarettes the length of the filter is seven times more than the length of the tobacco, thereby making it less hazardous.
Anchor is launching 8 variants of Cigaronne in India. International cigarette brands have a 12-13 per cent market share of the total tobacco industry. Anchor Beverages is looking to capture 20 per cent of this share.
As for promotions and marketing, Das explains that today there is no focused marketing initiatives undertaken for beer. Anchor will use the FMCG pattern of marketing these brands. The complete marketing activity will be undertaken by the marketing team of Anchor Group across the country.
“We will have consignee agents in every state and the consignees will have district wise distributors. Through them, the products will be available in the retail outlets across the country. We are using the concept of network marketing. Post WTO in 2005, I am hoping beer will be available off the shelf at retail stores like any other FMCG product. We are building ground for that day,” he states.
The company’s advertising and media spend ranges 4-5 per cent of the turnover of each brand. The company is also launching processed foods exclusively sourced from Gama Foods of Italy and Autralian Wine, Angove Wines.
On the financial front, Anchor Beverages, which has a turnover of Rs 20 crore, is expecting to clock Rs 300 crore by the financial year end March 2005.