![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: India: Pernod Ricard considering adding more types of Scotch to its offer in India
French drinks giant Pernod Ricard is considering introducing more types of Scotch in India to tap the growing thirst for top-tier whiskey in the world’s most populous nation, the Straits Times reported on October 17.
Pernod’s Chivas Brothers, the world’s second-biggest producer of the Scottish spirit including namesake blend Chivas Regal, may add some of its smaller brands to an existing range of single malts, such as The Glenlivet, currently sold in India.
“We have a number of single malts in Scotland, but not all of them are present for the time being in India,” Mr Jean-Etienne Gourgues, Chivas’ chairman and chief executive officer, said in an interview from the sand-fringed Indian state of Goa, which has become a hub for local distillers.
“We are looking at everything,” he added.
The company’s Secret Speyside single malts, for instance, are not sold in India. Mr Gourgues, however, declined to share details on brands that might be introduced in the country.
Pernod’s push in India – which accounts for 10 per cent of its group sales and where it faces competition from rival booze titan Diageo and flourishing local craft producers – is part of a wider strategy to get Asian drinkers to spend more on high-end premium spirits.
Last year, the Asia-Pacific region overtook the European Union to become the biggest buyer of exported Scotch.
In the first half of 2023, six of the 10 largest export destinations for the vaunted spirit – which must be distilled for a minimum three years in oak casks in Scotland – were in Asia.
While Scotch only accounts for 2 per cent of India’s whiskey market, the South Asian nation is the spirit’s largest export destination by volume with 219 million bottles shipped last year, according to the Edinburgh-based Scotch Whisky Association.
The volume of Scottish single malt sold in India jumped 70 per cent last year to 5.21 million litres, while blended Scotch volumes grew 11 per cent to 27.9 million litres, data provided by market researcher Euromonitor International show.
Sales have been buoyed by changing consumer habits in a country where whiskey is enormously popular despite booze being a taboo for many.
Written into India’s constitution is an “endeavor” to prohibit alcohol, which some states enforce, including Gujarat, the home of teetotal Prime Minister Narendra Modi.
Mr Gourgues said the Covid-19 pandemic spurred more intergenerational, family-based whiskey consumption, with uptake rising among women.
Fundamentally, the 25 million new Indian consumers reaching drinking age each year is “really a blessing,” he said, while acknowledged that Chivas’ pricier drinks remain out-of-reach for many.
That is in part because Scotch is subject to import tariffs of 150 per cent. Local taxes on alcohol are also devolved to the country’s states, creating a complex, often changing regulatory and pricing web nationwide.
Mr Gourgues said he was “cautiously optimistic” that a free trade deal currently being negotiated between India and the UK may be signed before national elections in India next year. It will help make Scotch more affordable and potentially boosting sales in the country by 50 per cent.
Earlier this month, a team of 30 UK officials visited India to thrash out remaining issues after missing an earlier deadline to get a deal inked late last year.
The two nations have softened positions, with Indian officials saying they had agreed to slash tariffs on British cars and Scottish whiskey, while the United Kingdom is prepared to relax some visa rules for professionals.
Despite Pernod’s optimism over India, it is contesting tax disputes with the country’s authorities. It also had its Delhi sales license renewal rejected after the distiller was investigated by India’s federal financial crime agency over allegations, including that it financially supported city retailers in exchange for stocking more of its brands. Pernod denies any wrongdoing.
The capital region accounts for about 5 per cent of Pernod’s net sales in India and the company is “working hard” to get it renewed, chief financial officer Hélène de Tissot said on an earnings call in April.
Mr Gourgues declined to comment on the matters facing the parent group.
17 October, 2023
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