The world’s largest liquor company, Diageo, best known for its Johnnie Walker and Smirnoff brands, plans to launch its high-end spirit brands in India.
This is seen as an attempt to counter Vijay Mallya’s United Spirits, which is reportedly close to acquiring Whyte & Mackay.
Diageo’s plan to launch its global brands here coincides with the government’s proposal to withdraw additional customs duty on foreign wine and liquor.
The duty cut is likely to lead to a 20-44% drop in retail prices of imported spirit and wine. With this, the company will be able to make its products more price competitive in India.
Currently, Indians who travel overseas prefer to shop at duty-free outlets for foreign liquor.
Asif Adil, managing director of Diageo India, says the reduction in import duty will boost the company’s margins as well.
The company will now introduce its premium malt whisky Talisker, high-end vodka Ciroc, and whisky brands Johnnie Walker Gold Label and Johnnie Walker Blue Label in India.
Talisker malts, which are aged between 10 and 25 years, will be priced close to international levels, said Adil. Currently, these are sold globally in the Rs500 to Rs2,500 range.
Diageo India, which plans to re-enter the Indian made foreign liquor (IMFL) segment through a joint venture with Radico Khaitan, is looking for more alliances in the wine and beer segments.
The company has budgeted about Rs35 crore for the purpose of promoting its products and campaigns this year.
“Our strategy for India includes substantial investments for market expansion in these segments. The company plans to spend 15% of its revenue this calendar year for this purpose,” Adil said.
Diageo India hopes that all these will help its revenue grow to Rs1,000 crore in the next four to five years. The company would not disclose its current revenue.