New India strategy for popular Diageo brands
THE Indian subsidiary of Diageo, United Spirits Limited (USL), is to sell or franchise some of its brands to Inbrew Beverages for `8.2 billion (£83.5 million).
However, the agreement, which follows a review of the business, does not include the McDowell’s or Director’s Special brands, which will be retained by USL.
The sale portfolio covers the entire business undertaking associated with 32 brands, including the related contracts, permits, intellectual property rights, associated employees, and a manufacturing facility.
In addition, USL and Inbrew have entered into a five-year franchise arrangement for 11 other brands, with the latter having the option to convert it into one with perpetual rights to use and/or acquire the brands.
“The transaction reflects the continued evolution of the management of the Popular portfolio since 2016, when the company moved to a franchise model in many states, to enable a sharpened focus on ‘Prestige & Above’,” Hina Nagarajan, managing director and chief executive of USL, said. “This is a significant move to reshape our portfolio in service of our publicly stated mission to deliver sustained double digit profitable top-line growth.”
Inbrew, owned by London-based Indian businessman Ravi Deol, has last year acquired Molson Coors’ beer business in India.
The latest deal makes the largely beer-focused company a diverse alcoholic beverages player in India, with popular brands like Haywards, Old Tavern, WhiteMischief, Honey Bee, Green Label and Romanov now in its stable.
Deol, the chairman of Inbrew, said: “The acquisition of these iconic brands provides Inbrew with a unique platform to extend its ambition of becoming India’s trusted household beverage company. These brands have delighted consumers over generations, and we are excited at the prospect of strengthening this legacy. Inbrew will revitalise these brands through expanded distribution, innovation and investments.”
Diageo said that it expects to complete the transaction by the end of the quarter ending September 30, 2022.