How AB InBev Circumvents New Delhi Ban
New Delhi city government has very recently banned AB InBev from selling its beer for three years. But now, AB InBev has quickly launched a non-alcoholic beer which is going to be available in Delhi markets despite the ongoing ban.
AB InBev – the world’s largest beer producer – is the second biggest alcohol industry actor in India’s $7 billion beer market, accounting for a 17.5% market share, according to research firm IWSR Drinks Market Analysis.
The company has expanded their profile with the launch of Budweiser 0.0, a non-alcoholic beer.
Recently, AB InBev was barred from selling its products in the critical New Delhi market for the alleged tax evasion.
A random inspection of a high-end bar in New Delhi led to a three year investigation uncovering that SABMiller – later purchased by and merged with AB InBev in 2016 for around $100 billion – used duplicate barcodes on beer bottles supplied to retailers that year, allowing it to evade alcohol taxation.
AB InBev appealed against the ban to the Commissioner of Excise in the Delhi city government. While the company’s appeal is still under consideration, AB InBev also filed a separate plea with the Commissioner for putting the ban order on hold pending appeal, but that request was turned down. Authorities in New Delhi have rejected the plea to temporarily lift the 3-year ban while the city government hears the global beer giant’s appeal against the tax evasion charges.
Bringing an alcohol brand to alcohol abstainers
As the city government upheld the ban while hearing the case, AB InBev is obviously severely affected in a key market, where it now cannot continue its aggressive push to hook new customers on their alcohol beer. Most people in India are living free from alcohol. As per the sentence, AB InBev is prohibited to add any fresh stock of beer in the New Delhi market.
However, it looks like AB InBev has found a way to circumvent the ban on selling their products.
Tasting and looking very similar to its alcohol beer, the new non-alcoholic product is not only introduced in New Delhi but also in the state of Gujarat, where any alcohol consumption is prohibited.
This new alcohol-free beer is AB InBev’s way of staying in the New Delhi market with its brand Budweiser (even though it also says “0.0 non-alcoholic” on the labels) and to continue to build brand relations with customers that currently are abstainers and have no taste for beer.
World Health Organization data from the 2018 Global Alcohol Status report shows that more than 60% of Indians in the age of 15 and above were alcohol abstainers in the past twelve months. Despite the ban in New Delhi and alcohol prohibition in Gujarat, AB InBev is targeting these abstainers as potential new customers with the alcohol-free beer – trying to train them to like the taste of beer.
A quote of Ben Verhaert, President – South Asia, AB InBev, gives their tactics away, as reported by Business Insider:
Budweiser is the fastest growing premium brand in the country and the launch of Budweiser 0.0 will further enable the brand to be inclusive, as many people today do not drink alcohol.”
The non-alcoholic beer is a placeholder for the premium brand Budweiser in AB InBev’s own telling. Introducing such a product into a market where it has recently been banned from for illegal business conduct is another highly controversial move.