MUMBAI: Shares in India's United Breweries Ltd fell as much as 3 percent on Friday, a day after a report said the brewer and two global rivals had been raided in India as part of an investigation into price-fixing allegations.
Reuters reported on Thursday that the Competition Commission of India (CCI) conducted search and seizure operations at the offices of India's United Breweries (UB), Denmark's Carlsberg and the world's largest brewer Anheuser-Busch InBev (AB InBev) in at least two Indian cities.
Shares in United Breweries' (UB), known for its Kingfisher brand, closed down 1.3 percent in Mumbai, as the broader market rose 2.3 percent on Friday.
Investors and analysts said UB shares were hit by fears that the CCI raids could result in penalties and potentially dent profits in future.
"This is a highly regulated market and these are global players. So, allegations of price-fixing are extremely worrying for us," said the head of a fund that owns UB shares, who asked not to be named due to company policies.
United Breweries did not respond to requests for comment.
The beer market in India is estimated to be worth nearly $6.85 billion in 2018, according to research firm Euromonitor International, and is expected to grow to $7.39 billion by 2022.
In comparison, the United States, the world's biggest beer market, is expected to generate sales of about $77 billion this year, according to statistics firm Statista.
UB holds more than half the market share in India followed by AB InBev with 22 percent and Carlsberg with 17 percent of the market.
Experts say, historically, growth in demand for beer in India has been lacklustre due to a preference for local alcohol. But that has risen in recent years with changing demographics and a growing pub culture in the country.
Increasing disposable income has also boosted demand for both premium and foreign brands, making it a lucrative bet for companies such as AB InBev and Carlsberg.
Shares in Carlsberg were up 0.3 percent at 1250 GMT on the Copenhagen Stock Exchange, while AB InBev shares were trading down 0.5 percent in Brussels.