AB InBev — the world’s largest beer maker — is eyeing investment opportunities in Bengal after the state excise department relaxed rules last month permitting breweries to house facilities to produce non-alcoholic beer (NAB).

The company, which already has a brewery in the state, is hoping to take advantage of the change in rules in order to make NAB in India.

At present, AB InBev imports its NAB brands — Budweiser 0.0 and Hoegaarden 0.0 — to India.

Once the the premises here are upgraded, it could be the first in the country to make NAB. India could also become an alternative manufacturing location to China and South Korea in the Asia Pacific region if the market picks up in the country.

NAB now attracts a 30 per cent basic custom duty. Once made within the country, the lower duty would make the pricing more competitive.

Celebrity Breweries, which makes AB InBev brands at its unit in Hooghly district of Bengal, has made a presentation to the state excise department to upgrade the premises at an estimated investment of Rs 50 crore, including setting up a de-alcoholizer unit and other equipment. The brewery also plans to maintain separate batches of beer and NAB.

Vishal Kumar, chief operating officer of Celebrity Breweries, said the introduction of the new rule along with the changes in tax slabs last year and the permission to manufacture NAB in the state has enabled the company to invest more than Rs 100 crore in Bengal to attract global brands.

Bengal gains

For Bengal, the gains are two-fold, says industry sources. First, the change in policy will attract more investment with other breweries also considering upgrading their units.

Second, the state will garner revenue on various fronts, including ancillary. The state will also benefit from a share of the 18 per cent GST applicable on NAB.

Heineken with its brand Heineken 0.0 is also present in the NAB segment in India. The overall NAB market in the country was estimated at 15,000 hectolitres in 2019 and is estimated to grow to 4,45,000 hectolitres by 2025.

However, a section of the industry remains sceptical. “NAB is aimed at a target consumer base that has competing products in the energy drinks category such as Red Bull and Monster. Unless there is a significant price differential, there would not be a major change. The typical lager and ale consumers will continue with their preferred beer brands,” said an industry source.