Pakistan's Lone Brewery Sets Sights On India

By Lauren Frayer

Published August 30, 2012 at 3:29 PM EDT

Isphanyar Bhandara, the head of Pakistan's only brewery, Murree Brewery, sits at his grandfather's desk at the headquarters in Rawalpindi, near Islamabad. Bhandara's grandfather was a director at the brewery when Pakistan gained independence in 1947, and he bought a controlling stake in the company. The brewery has been run by the Bhandara family ever since.

Islamic Pakistan has just one brewery, but it has a rich history.

Bottles of beer have been rolling off Murree Brewery's assembly line since 1860, when the company was founded outside the capital Islamabad — making it Pakistan's oldest private company.

"The brewery was here before Pakistan was here," says CEO Isphanyar Bhandara.

Sitting at his grandfather's desk, he tastes new samples and describes how he ended up running a brewery in a Muslim country, where alcohol is virtually banned.

"At the time of partition, my folks decided to stay on this side of the line," says Bhandara, referring to the 1947 division that ended British colonial rule and created the separate states of India and Pakistan.

"My grandfather, who was working as a director at that time in that company, bought the controlling interest. That's how, in 1947, it came into the family, the Bhandara family," he says.

Back then, Murree Brewery sold beer and whiskey across India, even as far away as Europe and America. But as Pakistan has embraced its Muslim identity over the years, alcohol has become scarce. Exports were banned in the 1970s.

A Limited Market

Bhandara's business survives by selling to five-star hotels and Pakistani Christians, who make up about 3 percent of the population and are issued government permits to buy alcohol.

"The government decides who I sell to. I don't choose my customers," says Bhandara. "If the government gives a license to a hotel or a wine shop, I can supply that particular wine shop. Simple as that."

But a huge potential market may soon open up. The Pakistani government is lifting restrictions on alcohol exports to non-Muslim countries — the biggest and closest of which is India.

"You might see Murree beer in India, hopefully by December. I'm just keeping my fingers crossed," says Bhandara.

So beer, of all things, could be the trailblazing export from this Muslim country to its longtime rival next door.

"There's so many ironic situations in Pakistan. I can give you a huge list," says Muhammad Ziauddin, executive editor of Pakistan's Express Tribune newspaper.

A Symbolic Step

He says beer exports would be a small but symbolic step toward normalized trade with India. At present, trade between them is extremely limited, amounting to about $1 billion a year, mostly in textiles.

While India's economy has been expanding for much of the past two decades, Pakistan's economy has continued to struggle. And the longtime rivalry, which dates back to partition and includes three wars between them, has always been an impediment to trade.

While people on both sides might not always admit it, Indians and Pakistanis share a lot, Ziauddin says.

"The tastes are almost the same," he says. "People like the same consumer items, and the middle class in India is supposed to be 300 million. So if we could get even a fraction of that market, the Pakistani economy would be booming."

Back at the brewery, the second in command is Sabih Rehman, a Pakistani army veteran who once led soldiers into battle against India in the disputed territory of Kashmir.

He brings the same patriotism that took him to war to his new job — marketing beer in his home country, where alcohol ads are not permitted.

"The thing is, this is my country. Murree Brewery is my country. Murree Brewery is Pakistan," says Rehman.

Watching hundreds of beer bottles moving past on a conveyor belt, Rehman formulates a new attack plan for India. It involves reaching across that same troubled border, but this time, with an icy cold one in hand.