Diageo uncorks price war, cuts premium whisky brand rates

Diageo uncorks price war, cuts premium whisky brand rates
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First Published: Wed, Oct 31 2007. 11 29 PM IST

Updated: Wed, Oct 31 2007. 11 29 PM IST
Mumbai: Starting what seems like a price war in imported whisky sold within India, the world’s largest drinks company, Diageo Plc., set a major price cut across its premium whisky brands.
The Diageo move is likely to force the industry peers such as Pernod Ricard South Asia Ltd, Beam Global Spirits & Wines Inc., Glenmorangie Co. Ltd, among others, to revisit their own Indian pricing strategy. It also comes ahead of an expected launch of Whyte & Mackay Scotch whisky brands by UB Group, which acquired the firm.
The prices of Diageo’s luxury spirits (imported in bottles), including two variants of the best-selling Johnnie Walker whisky, have been slashed by 20-37%, depending on the state, with the exception of Maharashtra, said Diageo India’s marketing director Santosh Kanekar. “We will reduce prices of our vodka brands such as Ciroc and Smirnoff as well in almost the same rate.”
For instance, Johnnie Walker Black Label whisky will now sell for about Rs1,996 per bottle of 750 ml from about Rs3,168 in a state such as Haryana. It will go down in similar proportions in most states where regional duties on imported liquor are on a par with local brands.
While Kanekar attributes the price cut mainly due to the removal of additional customs duty by the Union government in July, industry watchers see it as the start of a price war in the imported spirit market just as the peak sales season gets under way.
Diageo said it is yet to decide on price cuts in Maharashtra where imported whiskies sell for between Rs3,000 and Rs4,000 a bottle.
Johnnie Walker is now available at Rs3,600 per bottle in Mumbai, which consumes the most whisky among Indian cities. The Maharashtra government has already said it is considering a revision in duty.
The industry expects the new rates may be pegged at Rs 250-300 per litre, a significant reduction in prices.
Prices of imported whiskies are up about 22% since July following the state’s decision to add 200% duty. Following this, “most retail outlets in the state are running dry on Scotch brands now,” claims Sunil Mehdiratta, secretary general of the International Spirits and Wines Association of India, an industry body.
Ashwin Deo, managing director, Moett Hennessy India Pvt. Ltd, the company which sells the Glenmorangie brand of Scotch whisky in India, says his company is all set to pass on the complete benefit of the duty waiver to consumers.
Moett recently unveiled three variants of Glenmorangie single malt Scotch whisky, which are currently priced between Rs3,500 and Rs4,500 in the city.
Beam Global, which launched its popular bourbon brand Maker’s Mark last month, sells its best-seller premium whisky brand Jim Beam at Rs1,725 per bottle here.
Meanwhile, the Vijay Mallya-led United Spirits Ltd, which acquired Glasgow-based Whyte & Mackay in June, is also awaiting the Maharashtra government’s new excise duty to launch imported brands such as Dalmore, Whyte & Mackay, Isle of Jura, Glayva and Vladivar vodka of Whyte & Mackay.
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First Published: Wed, Oct 31 2007. 11 29 PM IST