Anheuser-Busch, Shaw Wallace, sign Budweiser agreement in India.

ST. LOUIS--(BUSINESS WIRE)--Jan. 4, 1995--Anheuser-Busch of St. Louis, brewer of Budweiser, the world's largest-selling beer, announced Wednesday it has agreed in principle to key business terms to form a partnership with Shaw Wallace and Company Limited of Bombay that gives the Indian brewer rights to license brew, package, market and distribute Budweiser throughout India.

The agreement would introduce Budweiser to the Indian beer market, which is growing at a rapid rate as government regulation of foreign investment and of the Indian beer industry change. Budweiser's roll out in India would be prior to the peak summer-selling season.

The Indian beer industry, which currently produces 3.68 million barrels (4.32 million hectoliters) of beer annually, is growing at a rate of approximately 17 percent annually, a trend that is expected to continue for the foreseeable future.

"We are eager to give Budweiser a strong foothold in the Indian market," said Ray Goff, president and managing director of Anheuser- Busch Asia, Inc. "Shaw Wallace is an ideal partner for us with its aggressive posture in the marketplace and its commitment to developing Budweiser in India."

India's population is 874 million, growing approximately 2 percent annually. This population growth, combined with the growing economy and increasing disposable income, contribute to the fast growth rate and the current attractiveness of the Indian beer market.

Shaw Wallace is the third-largest brewer in India, holding a 14 percent share of the market with its Haywards and Royal Challenge beer brands. Having reached its brewing capacity, Shaw Wallace is expanding its brewing operations significantly over the next two years through acquisitions and new brewery construction.

Shaw Wallace is planning a re-organization that gives sharper focus to its beer business and better positions the brewer to challenge market leaders. Its main beer export product is the Lal Toofan brand, which is sold in the United Kingdom.

"As our beer business continues to expand in India, our production, marketing and distribution strengths offer a strong base for a world-famous brand like Budweiser," said Ravi Jain, president of Shaw Wallace and Company, Limited, Shaw Wallace's beer division. "We want to make Budweiser the number one international beer brand in India in the coming years."

Budweiser is now sold in more than 60 countries around the world. Its distinctive taste, plus its American roots have helped Budweiser gain an increasingly broad acceptance in foreign markets. In markets such as Canada, Budweiser is sold as a mainstream brand, holding a 6 percent share of Canada's total beer market. In other countries such as Japan, Ireland and Korea, Budweiser is the market leader in the international beer category.

The licensing agreement for Budweiser would give Shaw Wallace exclusive rights to brew Budweiser according to the high standards and ingredient specifications set by Anheuser-Busch to assure that Budweiser sold in India is the same as the Budweiser sold elsewhere around the world. Anheuser-Busch would maintain control over key marketing and business decisions and would have an Anheuser-Busch brewmaster available for quality assurance.

Anheuser-Busch will be the exclusive foreign beer partner for Shaw Wallace in India. The two brewers expect to negotiate and execute a definitive contract on the agreement before March 1995 and intend to explore additional forms of joint opportunities in the future as a result of the licensing partnership.

Shaw Wallace, founded in 1886, is comprised of 20 businesses and 129 leading brands. Its business is concentrated in the beer, spirits and wine industries, but also has business in agriculture, rubber, soaps, toiletries, electronics, detergents, pesticides and other industries.

The proposed agreement with Shaw Wallace follows several other international business ventures by Anheuser-Busch recently. In June, the company announced its intention to form a joint venture in which it would hold an 80 percent ownership interest in the Zhongde brewery in Wuhan, China.

In 1993, Anheuser-Busch purchased a 17.7 percent investment in Grupo Modelo, the leading brewer in Mexico, a 5 percent investment in Tsingtao, the leading brewer in China and formed a marketing, sales and distribution joint venture with the Kirin Brewery, the largest brewer in Japan.

Anheuser-Busch, based in St. Louis, sold a record 87.3 million barrels (102.4 million hectoliters) of beer in 1993, giving it a leading 44.3 percent share of the U.S. beer market and a leading 9 percent share of the world beer market.

Anheuser-Busch International, Inc. is a subsidiary of Anheuser- Busch Companies, Inc., and is responsible for the company's foreign beer operation and for exploring and developing beer markets outside of the United States. Its activities include contract and license brewing, exports, sales, marketing and distribution of the company's beers in foreign markets, as well as equity partnerships with leading foreign brewers.

With beer sales in more than 65 countries, Anheuser-Busch International is the leading exporter of beer from the United States, accounting for about 45 percent of all beer exports. The subsidiary's volume is expected to top 4.4 million barrels (5 million hectoliters) in 1994, the 10th consecutive year in which it achieved record volume.

CONTACT: Anheuser-Busch, St. Louis

U.S.: Terri Vogt, 314/982-1771

Hong Kong: Christopher Homfray, 852/877-3939