India-UK FTA will make Scotch whiskies more competitively priced: Pernod Ricard India
HighlightsPernod Ricard India announced that the implementation of the India-UK free trade agreement will reduce import duties on UK whisky and gin, leading to lower retail prices for premium Scotch whiskies in India. Under the trade agreement, India will reduce duties on UK whisky and gin from 150 percent to 75 percent, and further to 40 percent by the tenth year, benefiting Indian consumers. Pernod Ricard India stated that while the FTA will positively impact the pricing of imported liquor, it will have minimal effect on Indian Made Foreign Liquor, which remains at a significantly lower price point.
Alcoholic beverage company
Pernod Ricard India
on Wednesday said a reduction in prices of imported liquor following the implementation of the
India-UK free trade agreement
(FTA) will lead to lower retail prices across most states. Terming the UK-India FTA as "a positive step forward for both the industry and consumers", Pernod Ricard India (PRI) said it will improve access to premium Scotch whiskies in the country.
"Notably, the FTA is expected to improve access to premium Scotch whiskies by making them more competitively priced, as reductions in import duties on Bottled-in Origin products will translate into lower retail prices across most states," a PRI spokesperson told PTI.
Under the trade pact, announced earlier this month, India will reduce duties on UK whisky and gin from 150 per cent to 75 per cent, and further to 40 per cent by the tenth year.
PRI is the subsidiary of the French spirits maker Pernod Ricard. It leads the Indian market in terms of sales, followed by Diageo, which owns United Spirits Ltd.
The company owns Chivas Regal and other Scotch whisky brands such as The Glenlivet, Royal Salute, Ballantine's etc.
According to PRI, while the formal details of the UK-India FTA are still awaited, the agreement in principle marks a positive step forward for both the industry and consumers.
However, PRI also added that it will have a minimum impact on the prices of IMFL (India Made Foreign Liquor).
"These price reductions will benefit Indian consumers, while having minimal impact on Indian Made Foreign Liquor, which remains at a significantly lower price point," the spokesperson said.
PRI also owns IMFL brands such as Blenders Pride, Imperial Blue, and Royal Stag through Seagram's.
The Indian alchoBev (alcoholic beverage) industry players blend imported bulk scotch whisky with IMFL. Some home-grown players expect a decline in IMFL prices also.
However, PRI said these price reductions will benefit Indian consumers, while having minimal impact on IMFL, which remains at a significantly lower price point.
In India, retail prices of liquor are controlled by policies of respective state governments. They identify the import duty as a separate component of the retail selling price in their respective areas.
"Once the final terms are officially announced, we will continue to assess the implications of the FTA as they come into effect," said PRI.
Earlier British spirits makr Diageo, which owns brands such as Johnny Waker had said it expects a reduction of "high single digit" in consumer prices along with additional volume growth after implementation of the India-UK free trade agreement
Pernod Ricard's global portfolio comprises over 200 premium brands, including 100 Pipers, Chivas Regal, The Glenlivet, Absolut, Havana Club and Jacob's Creek.
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