Glen­fid­dich Could be Made in In­dia

Whisky maker Wil­liam Grant’s CEO says co is ex­plor­ing lo­cal pro­duc­tion and has promis­ing long-term out­look on coun­try Bring Your Own Bot­tle

The Economic Times - - Brands: Creating Desire - Ra­sul.Bailay@ times­ Global Sales

New Delhi: Wil­liam Grant, the world’s third largest Scotch whisky maker, is look­ing at lo­cal pro­duc­tion in In­dia to cater to in­creas­ing de­mand for pre­mium liquor in the coun­try, its CEO Si­mon Hunt has said.

Hunt, how­ever, de­clined to clar­ify if the Scot­tish dis­tiller of Glen­fid­dich single malt and Grant’s blended Scotch plans to launch In­dian made for­eign liquor brands or only to bot­tle some of its in­ter­na­tional brands lo­cally.

“In terms of lo­cal pro­duc­tion the com­pany takes a long term view and it is ab­so­lutely one of the things we are look­ing at,” he told ET in an ex­clu­sive in­ter­view. “At this stage I can only say we are ex­plor­ing it,” Hunt said, de­clin­ing to share any other de­tail.

At present Wil­liam Grant im­ports its brands — which in­clude Bal­ve­nie single malt Scotch, Tul­lam­ore Dew Ir­ish whisky, Hen­drick’s gin and Dram­buie liqueur — into the coun­try, at­tract­ing high taxes. Its brands are priced be­tween ₹ 1,300 and ₹ 32,000 per bot­tle, higher than com­pa­ra­ble brands of ri­vals Di­a­geo and Pernod Ri­card that bot­tle their more pop­u­lar Scotch and other pre­mium brands in the coun­try.

Di­a­geo and Pernod Ri­card also have in­dige­nous brands in their port­fo­lio that strad­dle across price points in In­dia, one of the big­gest spi- rits mar­ket in the world. Un­like the big­ger ri­vals that en­tered In­dia more than a decade ago, Wil­liam Grant was en­tirely de­pen­dent on lo­cal dis­trib­u­tors un­til four years ago. But the com­pany has man­aged to triple its sales since it took di­rect con­trol of its In­dia opera- tions. The com­pany now ex­pects In­dia to be its big­gest global mar­ket in the com­ing decades.

“We take a very long term view,” Hunt said. “When we look at In­dia we look at the growth trends, its de­mo­graph­ics, earn­ing po­ten­tials, the pen­e­tra­tion of con­sumer goods. We see a re­ally promis­ing long term out­look.”

He said In­dian con­sumers are “mak­ing a state­ment on how they are pro­gress­ing in the so­cial hi­er­ar­chy” through liquor brands with single malts and blended Scotch.

The liquor in­dus­try in In­dia, a young coun­try with a bil­lion-plus pop­u­la­tion, in­creas­ing dis­pos­able in­come and low per capita con­sump­tion of al­co­hol, has been ex­pand­ing at a com­pounded an­nual growth rate (CAGR) of over 12% in the decade to 2011.

But there are newer reg­u­la­tory chal­lenges now. High cus­tom du­ties of 150% on liquors and lack of “har­monised” poli­cies and taxes in dif­fer­ent states have been im­pact­ing prof­itabil­ity and even con­sumer de­mand in re­cent years.

Last fis­cal, the over­all mar­ket de­clined 2% in the in­dus­try’s worst per­for­mance in more than a decade, even as com­pa­nies bat­tled pro­hi­bi­tion in a few states and reg­u­la­tory hur­dles. In­dia is among the most im­por­tant top-line growth driver for both Di­a­geo and Pernod Ri­card, and is ex­pected to con­trib­ute 25-35% of these firms’ to­tal growth in the next three years.

all its brands like Glen­fid­dich, Bal­ve­nie single malt Scotch and Hen­drick’s gin from

Wil­liam Grant are priced to per bot­tle

en­tirely de­pen­dent on lo­cal dis­trib­u­tors un­til four years ago

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