India: United Spirits to close its 160-year-old manufacturing facility in Hyderabad

The Indian arm of Diageo, United Spirits, will close its 160-year-old manufacturing facility in Hyderabad, Telangana, due to ‘evolving market dynamics and ageing infrastructure’, The Spirits Business reported.

On 5 February, the company revealed its plan to close the factory, located in the Industrial Development Area of Nacharam in Hyderabad.

The company set 31 July 2025 as its estimated date of closure for the facility, subject to statutory approvals.

Headquartered in Bangalore, United Spirits said the Nacharam facility had contributed 1.5% to the company’s revenue from operations during the 2023-24 financial year.

Explaining its reason to cease operations of the plant, the company said it was part of a multi-year supply chain agility programme that was approved by the board of directors at the start of 2023.

On 8 February, United Spirits released another statement to address the media reports surrounding the closure of the plant.

The company clarified that the facility has been operational for approximately 160 years, claiming it plays a ‘crucial role in the region’s industrial landscape’.

The statement said: “Over the years, the unit has experienced significant challenges including evolving market dynamics and ageing infrastructure.

“In light of these challenges, the company is currently reviewing its internal business strategies, and no decisions have been made as of now.

“As part of this process, although there is currently no production activity, other essential activities including regular maintenance of plant and machinery and housekeeping of the entire unit, are being carried out in compliance with applicable regulatory requirements.

“Furthermore, the company wants to emphasise that it remains committed to the welfare of its workers and continues to provide wages during this period.

“Any decisions regarding the future of the unit will be made in compliance with legal obligations, with careful consideration of the best interests and wellbeing of its workforce.”

United Spirits also operates another site in Malkajgiri, Hyderabad, alongside facilities in Goa, Maharashtra, Bangalore, Rajasthan, Odisha and West Bengal.

Last month, United Spirits made a change at the top of its leadership, naming a new CEO in Praveen Someshwar.

For the nine months ending 31 December 2024, United Spirits sales increased by 7.5% with its prestige-and-above segment growing by 8.8%.

Meanwhile, last week London-headquartered Diageo reported an organic sales rise of 1% for the last six months of 2024, with revenue in India up by 6%.

Diageo noted ‘strong growth’ in Indian-made foreign liquor (IMFL), driven by its prestige-and-above segment.

Whisky growth in India was led by McDowell’s, Signature and Royal Challenge, while Scotch sales were boosted by Black & White.

In addition, Diageo noted that its business had restarted in the state of Andhra Pradesh in the second half of September 2024 after a period of almost five years.

The move came after the state’s government introduced a new excise policy last year, which transitioned alcohol sales back to private retailers.

11 February, 2025