INDIA/UK: Diageo open to M&A opportunities in India
India remains a land of opportunity for international spirits producers like Diageo
Diageo has not ruled out future partnerships in India, but has professed to being “happy” with its presence in the burgeoning spirits market.
Speaking to media at the firm's H1 results presentation today (9 February), CEO Paul Walsh suggested that Diageo has an eye on potential M&A opportunities in India. In 2009, the company walked away from talks with The UB Group over a possible tie-up with its United Spirits division. However, UB Group's current battles with debt could make an alliance more attractive now.
“Clearly, United Spirits has got a great footprint,” Walsh said today. “But, equally, the strategy that we're deploying is very successful from our perspective. Therefore, we don't see any need to rush in any particular acquisition direction in India.
Since the breakdown of the talks with UB, Diageo has set up its own operations in the country, which include 350 dedicated sales people. “We're happy with what we've got,” Walsh added, “but we'll always be alert to opportunity.”
The president of Diageo's Asia Pacific unit, Gilbert Ghostine, echoed Walsh's satisfaction with the company's presence in India. “In the first half,” Ghostine said, “super-deluxe (spirits) brands have grown by over 50% in India. Because of our confidence in our route-to-market, we have ventured into the IMFL (Indian-Made Foreign Liquor) whiskey category with Rowson's Reserve (launched in September).”
When asked about the demise of Diageo's IMFL joint-venture with Radico Khaitan, reported exclusively by just-drinks in September, Ghostine said that the closure has “almost” been completed. “We own 100% of the Radico Khaitan JV now and we are in the process of winding down the operation,” he said.
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