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Murree Brewery – still brewing strong

Murree Brewery – still brewing strong

Established in 1860, the Murree Brewery is Pakistan’s oldest institution. At the time of its creation, the brewery in Ghora Gali in Murree was one of Asia’s first modern beer breweries. Having undergone many changes in management and location due to both natural calamities and bureaucratic interference, the Murree Brewery managed to overcome all such challenges and emerged stronger under the late Minoo Bhandara’s masterful leadership.

After Mr. Bhandara’s unexpected and tragic demise, the onus of running the brewery lay with his son, Isphanyar Bhandara, who had been working at the brewery for almost a decade before his father’s untimely death and was thus familiar with the operations and intricacies involved in running a brewery in an otherwise officially-declared dry country like Pakistan.

Apart from the alcohol division, Murree Brewery has two other subsidiaries: Tops Food and Beverages, and Murree Glass; both of which function independently and as successfully as the brewery itself.

Given Pakistan’s current situation, running any business in these trying times – where the economy and policies are both volatile – is not easy, let alone a business that has alcohol as its mainstay. Isphanyar Bhandara talks to Blue Chip about the challenges he faces running a brewery in a country where the open sale of alcohol is prohibited, his plans for the future and his father’s great legacy.

What are your plans for Murree Brewery for 2010? 
Isphanyar Bhandara: “Just about a week ago, we celebrated 150 years of existence. We are a group of three companies: Murree Brewery, Tops Food and Beverages and Murree Glass. We have a turnover of around Rs. 3.5-4 billion per annum and we are growing. As far as your question for the plan of 2010 is concerned, the liquor and beer trade is 100% controlled by the government. The more permits they issue, the more we can sell. So, less permits, less sales. But over the last decade, from 2000-2010, we have seen a 10% growth in the alcoholic sector and more so in juices.”

Why do you think that is the case?
IB: “There are multiple reasons for it. Firstly, of course, we have got a huge population. Having a pint of beer or having a glass of whisky is far better than doing dangerous drugs. Beer is very healthy, in fact!  So number one, we’ve got a large, healthy population and secondly, the awareness has grown in choosing to have a beer over drugs. And number three, of course, we have been here for 150 years so word gets around that we provide quality to our customers. All of these are reasons for the increase in sales and as I said, the more permits the government issues, the more sales there are. Without that permit, I can’t sell even one bottle to anyone. So, the more permits there are, the more money the government is making, the more sales I’m having – so, it’s a win-win situation for everybody.”

Will the government issue more permits?
IB: “Right now, there is a steady growing demand. Of course, you’ve got to remember that our borders are porous.  Chinese beer and liquor is coming into Pakistan from the Gilgit-Baltistan side. Indian beer is pouring in from Tharparkar into Sindh. So, a lot of liquor is being smuggled into Pakistan. We’ve got small competition in the form of bootleggers and the government does not earn a penny from that. The government only earns from Murree Brewery. Whatever imported liquor that you see in people’s houses –Foster’s and the Carlsberg – all of that is illegitimate.”

What other challenges do you face?
IB: “The challenge is that since the imported beer/liquor trade is illegal, it does not attract any duties. I’m not afraid of that competition but it does hurt us when more and more Heinekens get smuggled into Pakistan – which is coming in a huge way. So, ultimately what happens is that the affluent consumer who is having a party… if he wants to buy 20 cases of beer – Murree Beer is slightly cheaper, if almost the same, as a Corona – the natural tendency would be to go for the imported beer. That’s the mindset of our nation. So, illegal imports should be completely banned. If you want to import it, then put a duty on it and regularise it.

If I want to import a Mercedes, I have to pay 250% duty. That protects the local industry also. If Mercedes cars were as cheap as they are abroad, who in their right mind would be buying Corollas? So, that’s why the import of alcoholic beverages should either be banned completely or there should be a heavy duty on imported liquor so that local suppliers can maintain an edge.

Another unfortunate thing that is happening is the availability of illicit, spurious, home-made liquor. Every Eid, Christmas, New Years’ or Holi, if you pick up the newspaper, you’ll read that 30 people have died from alcohol that is unfit for human consumption. It is poisonous liquor because it is under fermented.

If  people want to drink, the government should allow small outlets – like they have in Sindh and Balochistan, called ‘wine shops’. This should be allowed in the Punjab also. We have told the government many times to allow wine shops in small cities — Bahawalpur, Gujranwala, Sialkot are all dry, Multan is close to being dry as well. There is a huge non-Muslim population in all these cities and they get their quotas from Lahore at high prices. Who is benefiting from all of this? The bootlegger, or the middle guy who is selling it. Individuals are making money — not the government.”

But why is there this disparity between Sindh, Balochistan, and Punjab? Why aren’t there any wine shops in Punjab? 
IB: “Punjab is a more conservative province whereas Balochistan and Sindh are more business-minded and liberal. Traditionally, the concept of wine shops has existed there. Punjab also had wine shops years ago, but during Bhutto’s time when the ban was put into action, people in Sindh and Balochistan must have made a hue and cry and the government must have said that okay, fine, open the wine shops. Punjab must have said no. So, till today, in Punjab, we sell through hotels – all the PSL hotels are our customers. Then, we have the other hotels like Avari, Ambassador, etc. We don’t have guest houses as our customers, although a lot of foreigners stay in guest houses, because the government is very stingy in giving the permission to guest houses, or to anyone else. For example, in Islamabad, we have Marriott, Serena and Best Western as our customers. Legit sale is only taking place at these three places. So, if the guest house is serving Murree Beer, then they have also bought it from these three. In Rawalpindi, we used to have two customers: Pearl Continental and Flashmans. But the latter put a stop to sale of liquor, terming it ‘un-Islamic’. They were doing sales of about Rs. 10 million because of Murree Brewery and now their employees are complaining that they haven’t even been paid. So, they lost a lot of business because of that but the sales at PC Pindi have gone up and the sales for us remain the same overall for Pindi because of that.”

Do you export non-alcoholic beverages?
IB: “We are exporting to the UK, China and Afghanistan.  However, because Pakistan has a population of 180 million, it’s a huge market which I haven’t fully tapped into. So whatever export I’m doing is just a bonus for me. Our management’s focus is more on the non-alcoholic beverages rather than the alcoholic beverages because that is what we need to push. As far as competition is concerned, there are two other distilleries but they are very small, 5% of our size: Indus in Karachi and Quetta Distillery Limited (QDL), which is a very old distillery.


Is the beer your best selling product?
IB: “We produce whisky, gin, vodka, rum and brandy. We have also introduced a new whisky and we have started selling the Millenium beer in cans also – so, I would not point out at one product only. I don’t want to make one product strong; I want to take them all along together. I don’t want to just emphasise on beer, but yes, in Pakistan, we are the monopoly in beer but we don’t take any undue advantage of that because we don’t need to and that’s not how we work. Of course, the brandies and the rum are niche products.”
Your father’s death was not just a huge loss for your family and Murree Brewery but also for Pakistan as he was one of our finest writers, speakers and social activists…
IB: “He was a household name in Islamabad and everybody knew him. People still condole with me, even after two years. He went to Harvard and Oxford and he was friends with all the political leaders. He was a patriot to the core. He never opted for dual nationality, though he could have got it with his eyes closed. He never had the urge to live anywhere else except Pakistan.”

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