Bihar is emerging as a brewery hub with major domestic and foreign firms setting up production units in the state due to availability of cheap labour and raw materials coupled with improved law and order and investment-friendly government policies.

"Big investments are coming up in this sector. In the coming years we will emerge as a big player in brewery business," said C.K. Mishra, principal secretary, department of industries, Bihar.

He said major domestic and foreign brewery firms are in the process to set up new production units in the state.

"Three major firms - United Breweries, Danish brewery company Carlsberg Group and Cobra Beer - are in the process to set up new units and will start production this year," Mishra told IANS. Mishra was in Jaipur to attend the three-day Pravasi Bharatiya Divas, the annual congregation of the Indian diaspora.

Vijay Mallya-promoted United Breweries (UB), which controls nearly half of India's beer market, is setting up a new unit near Bihar capital Patna. "Construction on the new unit has already started," said Mishra.

United Breweries is also setting up a production unit to make litchi-flavoured wine. The company has leased litchi gardens and is setting up processing units in Muzaffarpur district of Bihar.

Almost 70 percent of litchis produced in India come from Muzaffarpur and neighbouring districts. Litchi is a sweet, pulpy and juicy fruit. The most popular variety of the fruit called "shahi litchi" is largely grown in the Muzaffarpur area.

The company plans to produce litchi-flavoured wine by mixing pulpy extracts of the fruit with various types of spirits.

Cobra Beer, a company run by London-based NRI Lord Karan Bilimoria, is in an advanced state of setting up a new unit and targets more than tripling its production capacity in the state by next year.

"We are upgrading and expanding our brewery in Bihar. We are increasing the capacity to four million cases by February from two million now. By the same time next year the capacity will more than triple to seven million cases," Bilimoria told IANS.

Danish brewing company Carlsberg Group also plans to set up a production unit in the state.

"Carlsberg is looking for land near Hajipur in Vaishali district," said Mishra, adding the government was helping the company in getting land and setting up the unit.

On proposed investments by these companies, Mishra said, "Normally Rs.300 crore to Rs.400 crore investment is required for setting up a brewery plant in the state. In each of these plants, the investment will be in this range."

Brewery companies are investing heavily in Bihar because of abundance of grains and cheap labour available in the state. Grains like barley and wheat, largely used in brewing beer, is produced in abundance in the state.

Chief Minister Nitish Kumar's effort to improve law and order in the state has sent a positive signal to investors.

Companies like Cobra Beer plan to make Bihar its production hub and supply the produce in other states.

Beer consumption in domestic markets in Bihar has increased sharply in the last few years. Beer consumption in the state has risen 10 times in the past seven years.

As per industry estimates, annual consumption is 700,000 cases.