India: Diageo’s United Spirits to cut down around 150 of its brands and focus on better performing products

Diageo’s Indian unit United Spirits is planning to cut down around 150 of its brands to focus on better performing brands and strengthen its business in a market that is seemingly dominated by local, cheaper brands, Drinks Business Review reported on October 30.

The British drinks company intends to place its focus on promotion and marketing of its top 15 brands, while consolidating or downplaying other brands.

India is lately being seen as an emerging market for global drinks makers as business in the developed part of the world is seen becoming sluggish. The country is now considered to be Diageo's second-largest market in terms of sales, reported The Financial Express.

Diageo chief executive of UK unit Anand Kripalu was quoted by the publication as saying: "We are focussing on select brands, which we believe are the critical ones, big drivers of growth." He said that the top brands would receive special importance with strategic investments.

Anand Kripalu said that over the next few years Diageo expects growth in the top-end spirits business outdoing the mass market with the young professional class demanding better quality of liquor.

Compared with other large economies such as the US and China, India remains a small market but drink makers are hopeful of growth in this emerging market with rapid urbanization, fast-growing middle class and young population.

According to Anand Kripalu, the share of higher-end spirits in total volume is likely to rise to 60% from 40%.

The Indian portfolio of Diageo includes Ciroc vodka, while United Spirits owns whisky brands namely McDowell's No. 1 and Bagpiper.

Recently, Diageo had stated that its Indian arm United Spirits, which is embroiled in controversy due to its chairman Vijay Mallya, may lose more than 10 million shares of United Spirits Ltd (USL) worth over Rs 32.35 bln ($487 mln) at current market price, in case of an unfavorable ruling on the several petitions filed against United Breweries Holdings Ltd (UBHL), from which it had acquired these shares.

30 October, 2015