The year 2007 witnessed the global expansion of Indian liquor firms as well as a flood of global brands into the country. The $2-billion Indian market consumes over 120 million cases of spirits each year, where the locally made ones holds lion?s share. Out of the country?s total spirit market, whisky comprises 58%, rum 21% and brandy 17%, while white spirits hold a mere 4%.
The government?s withdrawal of the additional customs duty on imported spirits in July gave an added boost to the industry. The impact reflected in the sales of imported scotch whisky. Later, the Maharashtra government also reduced the additional excise duty on imported spirits. The duty cut opened the window for global brands to enter India. Kyndal India, the distributor of Absolut Vodka, will launch global vodka brands from Russia and Nordic region in India next year. It has entered into a JV with with Amsterdam-based Lucas Bols to manufacture and market its Bols and other liquor brands in India. The vodka segment in the country is becoming prominent, as 2,269 cases were sold in 2005-06 against 1,694 cases in 2004-05. Unconfirmed reports say Diageo will brew its Guinness beer locally.
Wine sector is becoming more competitive as a number of domestic brands as well as imported brands have found their place in the market. Spirits major, UB has entered into the wine sector by launching a number of global wine brands from New Zealand and Australia. UB Wines is launching its own domestic brand by the end of this year, under the brand name Fourseasons Wines. UB Wines will invest upto Rs 80-85 crore within the next five months, while Diageo India has launched its first-ever domestic wines, Nilaya, last month. Another wine player, Chateau d?Ori, is launching five varieties of its own brands. The Rs 150-crore Indian wine market produces about 13 million bottles of wines per year. Meanwhile, the Maharashtra government?s move to increase the excise duty on imported wines to 200% from 150% came as a shock to the wine industry. According to experts, the move will result in a flood of cheaper imported wines into the state.
On the M&A front, the UB group?s buyout of Whyte & Mackay for ? 595 million (about Rs 4,783 crore) has hogged the limelight. The deal gave UB a good product portfolio and a strong presence in the scotch whiskey market. Its acquisition of French wine-maker Bouvet-Ladubay for nearly $18 million has brought it a good portfolio of wine brands. Mumbai-based wine maker Champagne Indage?s buyout of Australia?s Tandou Ltd. was yet another development in the sector.