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Informist, Friday, May 23, 2025

By Avishek Rakshit and Madhu Kumar

KOLKATA/MUMBAI – United Spirits Ltd. is expected to reduce prices of imported Scotch whiskey by high single digits in the coming days, which will lead to an additional sales volume growth of the imported spirit, Managing Director and Chief Executive Officer Praveen Someshwar said Friday.

In a post-earnings call with sector analysts, Someshwar reasoned that following the India-UK Free Trade Agreement, the duty on imported Scotch has reduced from 150% to 75%, and the Indian government may expect the benefit of such duty reduction to be passed on to consumers.

"My sense is that the government will also insist that we pass on the pricing benefit to the consumer. And we are absolutely of the same view, that we would want to pass on this benefit completely to the consumer," Someshwar said.

Considering the market and demand trends the company has been witnessing in the recent past, and the opening up of new markets, price reduction of Scotch whiskey is also expected to increase sales volume for the company. United Spirits' Scotch portfolio in India primarily comprises Johnnie Walker and Black Dog brands of blended Scotch whiskey. The company's total sales volume for FY25 rose 4.1% on year to 63.94 million cases. 

"Keeping the consumer spend content, it is reasonable to assume that in this part of the portfolio a high single-digit additional volume growth should occur," he said.

During the year ended March, United Spirits' premium portfolio, which is termed as 'prestige & above' in the alcoholic beverages industry, grew by 5.4% on year to 52.9 million cases. As a result of the volume growth and increased consumer spend on the upper end of the premium products, the revenue also increased by around 10% on year to INR 102.7 billion in 2024-25 (Apr-Mar).

Prices of spirits bottled in India is also expected to reduce by 4-5% going forward. "The price reduction might be slightly lesser than high single-digit. My sense is that it means a range of four to five (percent)," Someshwar said.

Bottled in India spirits, commonly referred to as India-made foreign liquor, are those that are produced in foreign countries but imported to India in bulk quantities and bottled in an excise bonded warehouse by importers. Thus, since these spirits are packaged in India, these will not directly receive the high benefits which Scotch will have. It is mandatory for Scotch whiskey to be produced in Scotland to be termed as Scotch.

Someshwar said following the trade agreement with the UK, United Spirits, which is the Indian division of the world's fourth largest alcoholic beverage company by market capitalisation, Diageo Plc., will also receive some benefits over raw material procurement.

"There is still some amount of work to happen before this actually becomes legislation. So, probably the benefit will start coming only financially during (FY) 26-27," he said.

The UK-India trade deal has also opened up opportunities to further increase sales and penetration of Diageo's global portfolio in India, the top official said.

United Spirits is working towards premiumising its portfolio further by launching new products under the existing brands and offering brand extensions suited to Indian taste and preferences. For instance, the company launched three Indian fruit-flavoured vodka like jamun, mango, and lime under the global Smirnoff brand.

The company is also optimist of its future growth potential in Andhra Pradesh and Uttar Pradesh after these states rolled out their new liquor policies. While the policy in Andhra Pradesh led to opening of new liquor stores including mega stores like the ones in Gurugram, in Uttar Pradesh, shops selling beer were allowed to sell spirits. Under the previous policy in Uttar Pradesh, shops had to either sell beer or spirits.

On Friday, shares of United Spirits closed 0.67% higher at INR 1,578.90 on the National Stock Exchange.  End

Edited by Tanima Banerjee

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