INDIA: Diageo calls time on Radico Khaitan JV
Diageo's IMFL JV with Radico Khaitan will come to an end in the coming months
The company, which has been working alone to increase its distribution in the country after talks broke down with The UB Group, will “wrap … up” the JV in the coming months. Speaking exclusively to just-drinks earlier today (21 September), the president of Diageo's Asia Pacific unit, Gilbert Ghostine, confirmed the move, but reiterated that the firm would be open to future partnerships in the country.
Formed in 2006, Diageo Radico Distilleries was formed to “bring together the strengths of the two companies in brand marketing and distribution”, according to Diageo.
“The JV enabled us to understand better the dynamics of the Indian-Made Foreign Liquor (IMFL) category, and to be able to make choices about whether we want to participate and at what scale,” Ghostine said.
“It has not been a big success, and is in the process of being wound down.”
When asked for a timescale for the dissolution, Ghostine said: “This is progressing fast, so I'm assuming it will not take long for us to wrap this up." just-drinks understands that the "fast" progress means the JV will come to a close in a matter of months.
Two years ago, talks about a possible distribution deal in India between Diageo and The UB Group came to nought. Since then, Diageo has been beefing up its distribution presence, but is still prepared to consider future tie-ups.
“I think we are very well placed to go it alone in India,” Ghostine continued. “At the same time, we will keep looking at opportunities to expand our footprint in the country. We will be looking at partnerships, successful brands and brands that could generate growth that can be accretive to our performance today in India.”
As long ago as 2008, Radico Khaitan was moved to quell speculation that the JV was in trouble. The firm was also thought to be troubled by Diageo's talks with UB.
A full interview with Ghostine will run on just-drinks next week.
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