INDIA: Diageo avoids 30 years of work with United Spirits deal - report
The deal is expected to complete by March
Diageo has circumnavigated many years of work building up a spirits distribution network in India by buying a majority stake in United Spirits, according to a senior executive from one of the Indian group’s sister companies.
In an interview with the Economic Times, Samar Singh Sheikhawat, senior marketing VP at United Breweries, said that, for Diageo to accumulate the distribution network that United Spirits has in India “would take 30 years”. The UK firm is due to complete on its INR111.7bn (US$2.05bn) deal to take a 53.4% controlling stake in United Spirits by March, subject to regulatory approval.
Sheikhawat also said that Diageo’s Johhnie Walker brand could halve in price in India, if the Scotch whisky is produced and bottled in the country.
He added: “Say, the prices of its brands like J&B or Smirnoff and Baileys fall and distribution is increased 10-fold, can you imagine what happens to bootleggers?”
Meanwhile, Sheikhawat appeared to dismiss the idea of the UK firm bringing Guinness to India. “My theory is that it will not work in India,” he said. “First, it is served at room temperature. Second, it is black. Third, it has a fruity coffee kind of taste. Indians like their beer cold.”
Since the great recession of 2008/2009 Diageo has transformed itself, primarily through acquisition, from being overly focused on mature markets to a more balanced geographic split and if, as seems li...
The drinks sector is particularly fertile ground for mergers and acquisition activity, with a number of big businesses accustomed to making acquisitions to spur growth, new players popping up all over...
In a recently-published global briefing 'Diageo in Spirits', Euromonitor International's senior alcoholic drinks analyst Jeremy Cunnington takes a look at what are the challenges facing Diageo in spi...
- Pernod's Portman Group penalty - a coincidence?
- A tobacco analogy soft drinks will want to embrace
- Cognac plays the waiting game in China
- Comment - Coke Life: Hit or Miss?
- just The Preview - SABMiller's Q1
- Pernod Ricard swings at Portman Group
- Remy posts Q1 sales drop as Edrington loss bites
- C&C Group steps down as Portman Group funder
- Bacardi to fight US football team legal action
- Distell to take 26% stake in spirits firm KHEAL