News

India hiccups pull on United Spirits sales in FY fiscal-2017 - results

Most popular

Another drinks CEO steps down - But, why?

Pernod Ricard Performance Trends 2014-2018 - data

What's coming up in soft drinks in 2019?

Bar Nøne launch proves Coca-Cola is faster

MORE
  • Full-year sales rise by 4% to INR85.8bn (US$1.3bn)
  • Net profits in 12 months to end of March jump 39% to INR1.7bn
  • Operating profits (EBITDA) lift by 11% to INR9.8bn
  • Sales in Q4 dip by 1%, rising 7% on underlying basis

United Spirits has posted a slight lift in sales from fiscal-2017, despite a dip in volumes due to some exceptional challenges in India during the period.

United Spirits accounts for around 44% of Indias spirits market

United Spirits accounts for around 44% of India's spirits market

Net sales in the 12 months to the end of March were up by 4% year-year. Stripping out the effect of the introduction of prohibition in Bihar state last April, and sales on an underlying basis increased 8% in the year.

However, in the final three months of the fiscal year - the first three months of 2017 - group sales dipped by 1%.

Total volumes slipped by 3%, United Spirits said, with an 8% increase in "Prestige and Above" being more than offset by a 10% drop in volumes from the "Popular" spirits portfolio.

The company, which is majority-controlled by Diageo, flagged a range of macro-economic issues that hampered performance in the year, from the demonetisation policy introduced in November and the ban on alcohol outlets within 500m of state highways, which was imposed throughout the country in April this year.

"We have delivered a strong set of results ... despite a subdued economic environment due to de-monetisation as well as the run up to the highway ban," said CEO Anand Kripalu. "We have faced challenges in the regulatory environment in certain states. Tax and excise levies in Maharashtra and West Bengal have led to sharp consumer price increases, and the route to market in Punjab continues to impact performance."

Kripalu maintained an optimistic stance on the future potential for spirits in India. "While the longer-term consumer opportunity remains strong for spirits, we expect that the highway ban will continue to impact performance in the short term," he said.

Speaking in London last month, Kripalu warned of a future issue for alcohol in India, in the form of the Goods & Services Tax, which is expected to be introduced nation-wide later this year. 

Providing an update in this week's results statement, Kripalu said: "While alcohol for human consumption has been excluded from GST, the additional tax on input materials and services will result in stranded taxes, and impact margins. We shall, of course, continue to work with the Central Government to minimise this impact, and approach the state governments for appropriate price increases.

"We also recognise that the GST rates may undergo further changes, and we await formal notification of the rates and rules."

To access United Spirits' official statement, click here.


Related Content

Drinks companies braced for next Indian regulatory headache - Diageo Capital Markets Day 2017

Drinks companies braced for next Indian regulatory headache - Diageo Capital Markets Day 2017...

Indian woes hammer United Breweries in FY 2017 - results

Indian woes hammer United Breweries in FY 2017 - results...

Sales slow in Q3 for United Spirits as demonetisation drags - results

Sales slow in Q3 for United Spirits as demonetisation drags - results...

Pernod Ricard fiscal-2017 by brand and region - results data

Pernod Ricard fiscal-2017 by brand and region - results data...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?