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Liquor giant Pernod Ricard expects India to be second-largest market by sales

By Anuradha Verma

  • 26 Nov 2015
Liquor giant Pernod Ricard expects India to be second-largest market by sales
Credit: Courtesy: Pernod Ricard

Pernod Ricard SA, Europe's second-biggest distiller, expects India to overtake China as its second-largest market by sales shortly as it expects its operations in India to post double-digit growth over the next five to 10 years, Reuters reported citing top executives of the group.

India currently contributes 9 per cent to the group's total sales and is being seen as key growth driver.

"Because of the growth in the middle class and the size of the whisky market in India, we are confident we can keep posting double-digit growth," Pernod Ricard finance chief Gilles Bogaert told Reuters in an interview, adding “It's a fair assumption, based on the growth pattern, that India will soon overtake China from a sales standpoint."

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Pernod Ricard, the owner of several brands including Chivas Regal whisky, Absolut vodka, Jameson whiskey and Martell cognac, is also looking to augment its imported brands portfolio in the country, said Guillaume Girard-Reydet, chief executive of its India business.

Meanwhile, the group is looking to launch new products and acquire some brands in its top two markets—the US and China—to perk up growth in these markets.

For the medium term, the group has set an annual sales growth target  of 4-5 per cent from 2 per cent in the previous financial year ended in June. 

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"To deliver that improvement, we count on several markets in particular (but) we want to improve our performance in the US and China," Bogaert added.

In India, the company sells brands such as, Blenders Pride, 100 Pipers, Fuel, Royal Stag and Imperial Blue, among others. 

However, the French major faces a tough competition in the country from Britain's Diageo, the world's-largest liquor producer by revenues, which owns and sells brands like Johnnie Walker, Smirnoff and Ciroc, among others.

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Diageo owns 54.78 per cent stake in India's largest liquor maker United Spirits Ltd, while Vijay Mallya owns 4.09 per cent equity stake, partly through public listed holding firm United Breweries (Holdings) Ltd. Over half of UB Group's stake is pledged with financial institutions. However, UB Group is still counted as a co-promoter of the firm.

In July this year, Diageo-controlled United Spirits sold its entire 3.21 per cent stake in beer maker United Breweries Ltd to Dutch brewer Heineken for Rs 872 crore ($137 million).  The move was part of the company's efforts to sell a few non-core assets of United Spirits to part-finance local capital expenditure. 

The UK parent is also looking to boost operations in the country through improving supply chain efficiency besides other moves

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