Military stores orders for Pernod, Diageo liquor brands dry up

Three Chinese firms are among the 12 companies with which the Maharashtra government has signed MoUs on Monday, collectively worth Rs 16,000 crore. The Chinese investments are worth over Rs 5,000 crore, an official statement said. All the three Chinese companies— Hengli Engineering, PMI Electro Mobility Solutions JV with Photon and Great Wall Motors—will invest in Talegaon in Pune district, the statement said.

Pernod Ricard and Diageo, two of the world's biggest spirit makers, have stopped receiving orders for their imported brands from India's defence canteen stores where they were sold at concessional prices, industry sources told Reuters.

Defence canteens provide access to both local and imported products such as liquor and electronics at less-than-market rates to soldiers, ex-servicemen and their families.

But Pernod Ricard India, whose brands include Chivas and Glenlivet scotch whisky, received no orders in May for imported spirits, compared with average monthly orders of 4,5005,000 cases by defence stores, one source said. One case typically holds six, nine or 12 bottles of liquor.

Diageo

India too has not received any orders since May for its imported brands such as the popular Johnnie Walker Black Label whisky and Talisker single malt, a second source said.

Pernod Ricard declined to comment and Diageo did not respond to queries. The defence ministry did not respond. While no written order has been issued, a senior government official said a formal decision in the matter was imminent.

"We want to encourage indigenous products ... with the PM's campaign, it gets more priority," said the official.

A bottle of Johnnie Walker Black Label costs Rs 3,600 in Maharashtra's defence canteens, a third lower than the Rs 5,500 retail customers pay there.

"Drinking scotch has become a habit, this move is going to hurt our pockets," said a retired Indian army official who said he purchases five scotch bottles each month for himself and his family.

While imported liquor sales at defence stores generate only about $17 million in annual sales, the channel generates regular demand for top foreign brands. The canteens sell about $450 million worth of liquor each year, mostly Indian-made beer, whisky, rum and other spirits, industry sources said.

A formal order to restrict purchases of imported liquor by defence stores will signal an unfriendly business environment, and will be "protectionism when there is nothing to protect," said an executive working at a foreign liquor company in India.

"You can't make scotch India," said the executive.

In May and June, the defence ministry asked liquor firms to provide details of their brands and details of imported ingredients used. in