Brewers expect a long, dry summer

United Breweries, Anheuser-Busch InBev and Carlsberg said they are staring at an unpredictable demand situation during India's crucial summer season that accounts for nearly 45% of their annual sales, as Covid-19 cases continue to surge and states impose lockdowns and other restrictions.“India is in a very difficult spot from a health perspective. It is difficult to predict what the future course will look like. It remains very fluid, depending on the Covid situation we will hope it's going to improve quickly,” Budweiser Brewing Co APAC chief executive Jan Craps said in an investor call.These companies that control 90% of the country's beer consumption posted their first sales growth in a year during the January-March quarter, partly due to lower excise taxes in some states, trade loading in other states ahead of price adjustments and a low base from last year to compare with.AB InBev and Carlsberg posted double-digit volume growth while UB, which makes Heineken and Kingfisher, grew 9% during the quarter.“If you are realistic, we see some risk for India. You saw a very good quarter. But at this moment of time, the volumes, of course, are a bit lower due to the situation there,” Carlsberg global chief executive Cees ’t Hart said.Brewers in India have been facing low demand for almost two summers now. In 2019, the Indian Premier League cricket tournament and summer months, which have both historically boosted demand for beer, failed to revive the segment which was hurt by the general elections and consequent dry days.Last year, the segment was declared non-essential amid lockdowns to contain the spread of Covid-19, forcing them to shut brewing and retail operations for nearly six weeks.“Due to the second wave of Covid-19, the industry outlook is very volatile. The impact will depend, of course, on the magnitude and duration of lockdowns, including any partial or full trade restrictions, whereas you can imagine the situation is now changing daily,” Berend Odink, UB’s chief financial officer, told analysts last week.

from Economic Times https://ift.tt/3etkkHJ