Pernod Ricard India looking to increase its share of nation's liquor sales to 50% by value from 47%, company's management tells analysts

Nevin Barich

BANGALORE, India , April 15, 2014 (Mint) – Pernod Ricard India Pvt. Ltd, owner of Royal Stag and Imperial Blue whiskeys, is looking to boost its share of the country's liquor sales to 50% by value from 47%, the France-based company's management told analysts.Pernod Ricard will launch products and expand into new areas to meet its market share target in two years, according a report by analysts Gautam Duggad and Manish Poddar at brokerage Motilal Oswal Financial Services Ltd. The analysts met Pernod Ricard's global management recently.

Pernod Ricard sells only so-called premium alcohol products in India and has avoided the higher volume cheap liquor category. The company claims a 47% market share of India's liquor sales by value though it accounts for less than 15% of volumes sold.

Pernod Ricard said in February that its India revenue rose over 17% in the first half of the year ended June.

Like most other companies, Pernod Ricard's volume growth slowed last year to 8-9% from more than 10% in previous years. India's liquor companies reported the worst volume growth last year-less than 2%, according to industry executives-in more than a decade as rising alcohol prices and slowing economic growth hurt demand.

Still, Pernod, Allied Blenders and Distillers Pvt. Ltd and Radico Khaitan Ltd have all gained market share from the market leader United Spirits Ltd.

To claw back lost volumes, United Spirits cut prices of its McDowell's No. 1 and Royal Challenge whiskeys.

"Despite price cuts by United Spirits in Royal Challenge, Pernod has not reciprocated. Price cuts in premium brands impair the brand equity, which is difficult to recoup, as per Pernod Ricard," the Motilal Oswal report said.

The cut in prices of Royal Challenge by United Spirits resulted in a "minuscule" loss of share for Pernod's competing brand Royal Stag, the report said. Published by HT Syndication with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

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