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Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

Australian Government - Department of Foreign Affairs and Trade

Advancing the interests of Australia and Australians internationally

India New Economy Old Economy

India New Economy Old Economy

Company: FOSTERS GROUP
State: VICTORIA
Sector: MANUFACTURING

Fosters was the first foreign brewer to establish operations in India. The Melbourne based company invested A$20 million into an 18 million litre brewery located in Aurangabad, about 400 kilometres from Mumbai. Production commenced in June 1998 and Fosterís Lager was an immediate hit with Mumbai consumers. Fosters Lager is now available in 80 per cent of Mumbaiís bars, clubs and restaurants and has the second largest market share in the city. The beer is also available in the Indian states of Maharashtra, Delhi, Andra Pradesh, Pondicherri, Goa and the territories of Daman and Diu.

Prior to July 1998, Fosters was one of very few foreign beers available in Mumbai. But market potential was very small, with 150 per cent tariffs restricting domestic consumption. Fosters first opportunity to locally produce beer came after the Indian government permitted foreign investment under the 1991 reforms. Fosters feels that major challenges have been in dealing with government processes at the central, state or local government levels. Government approvals are required at all stages of business, from connecting telephone lines to expansions plans. Fosters uses their local partner to help access government officials and recommends that other Australian businesses do likewise. When seeking government approvals, it is important to stress the projectís benefits to the wider community.

Fosters also feels potential investors should view the market realistically. While India does have a growing middle class and more than one billion people, most consumer goods are still luxuries and the consumer market for these products is limited. Foster believes a locally appointed marketing team that understands domestic consumer tastes and spending patterns is essential. Looking forward, as regulatory barriers decline, Fosters plans to expand sales to other states. The company goal of nationwide coverage in the next two years is not unrealistic given sales growth of 40 per cent in 2000.

Source: Fosters Group, 2001.

Department of Foreign Affairs and Trade