After a decade of off-and-on availability in Thailand as a partner of Chang beer, Carlsberg has re-entered the local market under a deal with Chang's arch-rival Singha.
The Danish beer brand formerly did business in Thailand in a partnership with the Chang beer group owned by whisky tycoon Charoen Sirivadhanabhakdi.
Singha Corporation, distributor of the Singha and Leo brands, will now distribute Carlsberg, a premium beer, in Asia through its networks.
Singha will also be allowed to use any of eight Carlsberg plants in Asia to make Singha products to sell in the region.
Beer brands under the Singha group have a total production capacity of 1.68 billion litres a year, while Carlsberg can handle 1.25 billion litres in Asean from two factories in Laos, one in Cambodia, four in Vietnam and one in Malaysia.
Singha wants to realise its goal of becoming a top-three beer brand in Asia in terms of sales value in the next five years, up from fifth. Now No.4, Carlsberg maintains the same goal.
In its latest move, Singha will use a Carlsberg factory in Russia to produce Singha beer for the European market starting next month.
Using Carlsberg's production base in Russia and exporting to Europe will cost less than using Singha's production base in Thailand.
Director Piti Bhirombhakdi said Singha will distribute Carlsberg beer in Thailand for five years and has the right to renew the contract. Carlsberg will be distributed through Singha's agents in 21 cities across the country.
Mr Piti said the market for premium beer in Thailand was about 100 million litres a year in the past but has declined to 70 million litres or 630 million baht.
More people shifted to drinking imported super premium brands, and with fewer players in the sector the market stagnated.
Under the partnership with Carlsberg, Singha is hopeful the overall beer market will grow by 8% in each of the next three years, while the premium beer market resumes growth of 10-12% on average.
"We are the challenger of Heineken," said Mr Piti.
"The re-entry of Carlsberg in Thailand not only serves to increase sales and profit but also builds up the customer base in the region and capitalises on when Asean becomes a single market under the AEC."
Apart from Carlsberg, the company has been contacted by at least six global companies from Asia and Europe that are interested in partnerships in other business areas such as farming, property and food.
The company expects to seal business deals with these firms in the coming years.
About the author
- Writer: Pitsinee Jitpleecheep
Position: Business Reporter