Diageo plans India spread as UB goes global

The world's largest spirits company Diageo is upping its play in India, even as the home-grown UB Group sets out to conquer mature global markets.

Diageo, which owns legendary brands such as Johnnie Walker scotch whiskey, Guinness stout beer and Smirnoff vodka, is expanding its India operations in an effort to cross the growth rate mark of 40 per cent, clocked in FY07.

Diageo has a cumulative capacity of 2,00,000 cases across three plants and is adding a plant at Haryana with an output of 50,000 cases by the end of next quarter.

The recently launched Bangalore plant has a capacity to bottle 20,000 cases a month and has a tie-up with Chamundi Winery and Distillery.

Diageo will be bottling Shark Tooth, Smirnoff, Hague, VAT 69 and Captain Morgan at the plant. The company's two other bottling plants are located in Aurangabad and Madhya Pradesh.

"The plant (in Haryana) will help us cater to the needs of the southern markets. We have already covered central and western parts of the country with our other plants and we will be starting operations at our plant in Haryana in the next two months," Diageo India MD Asif Adil said.

Talking about increasing the sales of the recently launched Guinness stout beer in India, Adil said they were targeting close to 50,000 cases in the next year and would look at bottling this iconic brand locally, if they meet this target.

The company is also likely to launch two new Indian Made Foreign Liquor (IMFL) whiskey labels in the price range of Rs 300-500 per 750 ml, as a part of its equal joint venture with Radico Khaitan. It recently launched Masterstroke as a part of the JV.

"We are also mulling the introduction of our top-end portfolio in single-malts such as Johnnie Walker Gold Label. We have set up a separate strategic business unit to deal with these reserved brands. We will look at bringing in all our six classic malts into India," Adil said.

Diageo India will launch its domestic wines in the next two months. It will launch one brand in the near future and introduce the variants later.

"All the work on our wine foray has been done and we are in the process of registering the brand. The product will be priced between Rs 300 and Rs 600," Adil said. "We will initially target markets in Mumbai, Delhi and Hyderabad," he added.

Diageo has already launched three foreign wines in India, Blossoms, B&Gs and Piat d'Or. It is likely to launch its domestic wine in a tie-up with the Nashik-based Mountain View and Renaissance Wineries.

The company will then compete with United Breweries, which is also  major player in the wine market. India consumed an estimated 9.25 lakh cases of wine in FY07.