The European arm of United Breweries in September has tied up with Sri Lanka’s Lion Brewery, in which Carlsberg holds a stake, to launch two of its beer brands across Europe.
Kingfisher, bought by Heineken is now carrying out distributing and marketing duties for Lion Lager and Lion Stout in the UK, Ireland, Germany, Switzerland, Sweden, Norway and Denmark. “Kingfisher spotted an opportunity with Lion Brewery for customers interested in ‘discovery beers’,” Sharlene Adams, Lion Brewery Head of Experts and New Product Development told the Business Times.
The unit wants to capitalise on the popularity of Lion, the beer market leader in Sri Lanka, with European tourists returning from the country who have acquired a taste for exotic beers, she said. “Consumers now want premium beer.” She noted that Lion Lager is served at 6,000 premium top end restaurants in the UK. “So far the progress during the past two months has been excellent,” Ms. Adams said noting that Lion Brewery’s export business is its growth engine.
Carlsberg owns a 25 per cent stake in Lion Brewery. Lion has a leading market position in the domestic beer industry. Its market share is supported by its entrenched brand and widespread retail coverage, with access to more than 2,250 outlets around Sri Lanka.
The Sri Lankan government has consistently used excise taxes as a tool to boost revenue to bridge budget deficits; consequently, from October 2015 to November 2016, the industry – especially the beer makers – was taxed from multiple fronts through higher excise duties, introduction of beer can taxes and reinstatement of VAT, dampening the competitiveness of beer, according to a Fitch Ratings report in August.