In a country where alcohol is banned, Pakistan’s top brewery is betting on soft drinks

A pungent fog of malt and yeastiness hangs over Murree Brewery, Pakistan’s biggest and oldest producer of alcoholic drinks. The company is an outlier in a country where alcohol is outlawed for everyone except non-Muslims, who make up some 9 million people out of 241 million. Pakistan, an Islamic republic, banned booze for Muslims in the 1970s. But Murree Brewery has strong financials despite the prohibition, thanks to its history, scant competition, and a small, thirsty and predominantly elite consumer base. But the government exerts significant control over the sale and marketing of alcoholic beverages through red tape and high taxes, pushing the brewery's chairman, Isphanyar Bandhara, to expand the company's footprint in Pakistan's non-alcoholic drinks industry, which, although bigger, is more crowded and less lucrative. “Even I tell my staff of about 2,200 that we cannot sit on our laurels by selling alcohol,” said Bandhara, the third generation of his family to run the 165-year-old business that was founded by the British. “It’s a restricted market, so we have to rely and focus more on the non-alcoholic side. That’s where I think I would like to flex my muscles and take credit, rather than being a liquor baron.” The brewery already manufactures energy drinks, juices and malted beverages, but they are not as well-known as products from big international brands. However, this part of the business is registering double-digit growth, and Bandhara wants to cash in on Pakistan's youth bulge. Around 64 percent of the population is under 30. Pakistan’s government determines the brewery’s alcohol prices, points of sale and customer base. Last year, it took $35 million from the brewery's revenue in taxes. The company cannot advertise its alcoholic beverages or expand that part of the business inside Pakistan. Online shopping is unavailable. The brewery is permitted to export beer to countries outside the Organization of Islamic Cooperation, a 57-member bloc, even though there is a “big demand for liquor and beer” in Muslim-majority countries, Bandhara said. Meanwhile, more Pakistanis drink far more sodas and juices, with billions of dollars in sales every year. PepsiCo and Coca-Cola dominate, but there are also homegrown brands. This article was provided by The Associated Press.