Ahead of the India-UK FTA discussions seeking to bring down import duty from 150% to 75% on alcohol, Radico Khaitan, one of the largest exporters of IMFL, said UK should also remove non-tariff barriers and provide a level-playing field to Indian players.
These non-tariff barriers include clauses such as minimum maturation condition for Indian whisky. Indian whiskies mature faster as compared to the three-year maturation period in colder regions.
“Indian whiskies have a different aging process, owing to the hot weather, with maturation in cask faster as compared to a colder region. The loss due to evaporation is higher here as compared to say Scotland, which may lead to loss of content. This leads to loss of revenue for manufacturers,” Sanjeev Banga, President, International Business, Radico Khaitan Ltd, told FE.
The UK side has been seeking import duty cut and also asking for maturity age of three years for the spirit to be classified as whisky by the European side.
Radico, which manufactures and retails Rampur Indian Single Malt whisky, said its products are available in over 100 countries.
On its expansion plans in the international market, Banga said it is planning to take India to the world in the beverage alcohol space by showcasing regional spirits to the global audiences.
“India is a diverse country and there is so much to offer from the regional alcoholic range, which so far have been confined to small pockets. Consumers are willing to experiment and try out new blends. A lot is happening in the background and we hope to share some of them in 2024,” Banga said.
He said with travel retail bouncing back, the company was witnessing good sales momentum.
“Our products are sold at a premium and are sought after by both Indian and international buyers. Indian single malts are at par with global brands. The demand is far more than we can produce. Currently, our brands are available in 22 airports around the globe,” he said.
Radico Khaitan has a malt distillation capacity of 3 million litres per annum to meet the demand for single malt.
Last month, the company set up a greenfield grain distillery in Sitapur in Uttar Pradesh. The 350 kilo litres per day distillery was set up with an investment of Rs 700 crore.
In addition to an annual ENA/absolute alcohol production capacity of over 100 million litres, the facility also has a bottling capacity of over 15 million cases. The company has also set up a malt maturation capacity of 10,000 barrels at the Sitapur campus.
“The full financial benefit of the Sitapur manufacturing facility is expected to be realised from Q3 FY24,” he added.
On the potential of the craft spirits business, Banga said that the company does small batches of 500 litres for Jaisalmer Indian Craft Gin.
The company has recently introduced two whiskies for the international market under Rampur Jugalbandi series – a series of eight expression. Rampur Jugalbandi series are being rolled out in the UK, USA, EU, Singapore. Earlier this year, Radico Khaitan had launched Sangam World Malt Whiskey.
In 2022-23, sale of IMFL products stood at 282million cases up by 7% compared to the period a year ago. Whisky remained the largest category with a sales volume of 243 cases, as per data by Confederation of Indian Alcoholic Beverage Companies (CIABC).
Radico Khaitan Ltd. had reported consolidated net profit at Rs 62.80 crore for the June quarter of FY24, registering a growth of 8.4 percent from Rs 58.00 crore in the same quarter of the previous financial year. Total revenue of the company stood at Rs 4,023.31 crore, rising 26.4 percent from Rs 3,183.80 crore in the year-ago quarter.