UK: Pernod Ricard “in a good position” in India, as Diageo readies United Spirits buy
The likes of Pernod Ricard and Diageo will be keen for the EU and India to secure a fair trade agreement soon
The head of Pernod Ricard has proclaimed his confidence in the company's position in the spirits market in India, despite Diageo's recently-announced tie-up with United Spirits in the country.
Late last year, Pernod's international spirits rival, Diageo, confirmed that it will buy a 53.4% controlling stake in The UB Group's United Spirits (USL) division for US$2.05bn. The news comes as multi-national spirits producers await an agreement between the European Union and India over a free trade agreement, which would see the export duty on international spirits fall from the current level of 150%.
Speaking to journalists in London today (19 February), Pernod CEO Pierre Pringuet said that the firm remains “in a good position” in India's premium spirits segment.
“We have full control of Pernod Ricard India and we know the market very well,” Pringuet said. “I think we are in a good position, definitely.”
Pringuet did not comment further on the perceived distribution advantage Diageo will secure once its USL transaction completes. The UB Group is by far the largest beer and spirits producer and distributor in India. Pernod owns its operations outright in the country - Seagram India became Pernod Ricard India in 2007 and employs around 1,000 staff.
“All players will be placed in the same position (once the trade agreement is signed),” said Pringuet. “That's a a normal situation to be in.”
On the negotiations between the European Union and India over a trade agreement, Pringuet said: “We are hearing very positive noises; there is an anticipation that it should be signed soon. I am conscious, though, that this is not the first time that we have heard positive noises about negotiations.
“The free trade agreement would obviously be good news for us. But, at the same time, we have a local business that is developing extremely fast - strong double-digit growth. This will continue anyway.”
Pernod is the market leader in India's premium spirits sector, defined as a retail price of EUR5 (US$6.67) and above. The firm accounts for around 49% share of the segment.
As SPI Group looks to weather a boycott of Stolichnaya in the US, Chris Mercer considers what steps a drinks company should take if - or when - a crisis hits....
Wuliangye Yibin has warned China's spirits market is going though an adjustment after it posted a slowdown in profits growth in first-half results, according to local reports. ...
- Focus - Pernod's YTD Performance by Region
- just On Call - Pernod shifts Scotch focus in China
- Focus - Heineken's Q1 Performance by Region
- Focus - Coca-Cola's Q1 Performance by Region
- Diet Coke "a work in progress" in US - Coca-Cola
- CFO of Diageo's United Spirits stands down
- Pernod Ricard sees YTD recover as sales increase
- BrewDog launches GBP25m crowd-funding attempt
- Africa "subdued" but Heineken sees Q1 rises
- Elements 8 revamps rum packaging
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Global rum insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- ALDI 2015: Radically transforming Anglo Saxon grocery markets
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research