You are here: Home » Companies » News
Business Standard

Diageo aims for 10% revenue from India

Wants to replicate scale and agility of United Spirits' operations in other markets as well

Raghuvir Badrinath & Antonita Madonna  |  Bangalore 

Diageo, maker of Johnnie Walker and Smirnoff, is aiming to derive about 10 per cent of its business from India after buying a controlling stake in United Spirits, the country’s largest liquor company.

Most countries yield 3 per cent or less to Diageo's worldwide sales, but India’s contribution could climb to 10 per cent, Chief Executive Ivan Menezes told investors.

“North America is the powerhouse. Business there delivers about a third of our net sales and about 40 per cent of our operating profit,” he added.

Sales in India grew 35 per cent in the first half of this financial year, the company said, against a 1.3 per cent growth in all emerging markets combined.

Diageo attributed the spectacular growth in India to gains after United Spirits, in which it has a a 26.37 per cent stake, began selling the London based-distiller’s brands through 65,000 outlets.

“The biggest transformation is in India and our investment in United Spirits,” Menezes said. “The strength of United Spirits’ route to market is offering a benchmark to many of our other markets.”

According to its India-born chief, Diageo is trying to replicate in other markets the combination of scale and agility in the operations of United Spirits, earlier controlled by Vijay Mallya.

“It is my ambition that in all our markets we have the capability which United Spirits has: to launch an innovation into 95 per cent of outlets in five days,” he explained.

Reaching across 90 per cent of the country, United Spirits’ distribution network was keenly sought by Diageo, which initially sought to buy 53.4 per cent of the company, but settled for 25.02 per cent last July after hitting legal hurdles.

Diageo started selling its liquor through United Spirits outlets since October 2013. “We have our sales promotion agreement in place and it contributed to the very strong growth we delivered in the first half in India,” Menezes added.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, March 29 2014. 22:39 IST
RECOMMENDED FOR YOU
.