Inebriated on free publicity, Murree Brewery publicises expansion plans

Liquor company’s products may hit US, Europe and Dubai next year.

RAWALPINDI: It was the arrest of the daughter of two famous Hollywood stars’ in New York that propelled Murree Brewery out of obscurity and into the spotlight. The woman was arrested with a can of Murree Brewery’s beer last June. Murree Brewery, seizing on the free publicity, has now publicised its expansion plans outside Pakistan, where alcohol is banned.

Five months since the arrest, the 150-year-old company says it has lined up distributors that could see its flagship beer arrive on liquor store shelves in the United States and Dubai as early as the first quarter of next year.

Murree Brewery, established in 1860 by British colonial rulers to supply beer to their troops, is desperately looking for business overseas to hedge against its uncertain domestic market. Prohibition was imposed in Pakistan in 1977, and non-Muslims and foreigners must obtain a government permit to purchase alcohol at designated retailers, mainly upscale hotels.

It also produces a line of juices and non-alcoholic drinks, but is prohibited from advertising its beer, whisky, gin and other liquor products.

Relying on word of mouth and an influx of thirsty diplomats and foreign investors, annual alcohol sales have grown an average of 20% over the past five years, reaching $26.8 million in fiscal 2012. The company’s stock is up 175% so far this year, trading at Rs160 on November 13, far outpacing the 42% rise in the Karachi Stock Exchange benchmark 100-share index.

Despite its strong sales, the company’s net profit after taxes rose a mere 1% year-on-year to Rs525 million for the year ended June 30, due to an increase in alcohol taxes and rising labour costs.

To ensure its survival, the company has turned to a European brewery to produce its beer for overseas consumption due to a government ban on alcohol exports, which was eased just recently.

Murree Brewery said it has lined up distributors in Texas in the US, Dubai and Denmark to market and sell its lager under franchise agreements, and is looking for partners in Britain and other European countries.

But Murree beer faces a difficult road as a new player in the crowded US and European markets, dominated by the industry’s “big four” – Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg.

The company’s last attempt to break into Western markets failed after it was forced to end its partnership with an Austrian brewery due to high costs and logistical problems.

Analysts say a few tabloid headlines will not be enough to be successful and Murree will also need a multi-million-dollar promotional campaign. It is also unclear the type of consumer they are trying to sell their beer to, since most Pakistanis living abroad are Muslim and unlikely to drink alcohol.

Published in The Express Tribune, November 17^th, 2012.