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 Foster's Lager was an immediate
hit with Mumbai consumers. Fosters Lager is now available in 80 per cent
of Mumbai's 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 project's 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.