A home-grown liquor giant is making a bold pivot
The making of India's brandy boss
Live Events
You Might Also Like:
India-UK FTA will make Scotch whiskies more competitively priced: Pernod Ricard India
You Might Also Like:
Alcohol makers seek phased import duty cuts, strong safeguards to prevent EU FTA misuse
From brandy to whisky
You Might Also Like:
Amrut launches its ₹10 lakh marquee Indian single malt whisky
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
Amid a rapidly transforming market, one of India's home-grown liquor producer is taking a sharp turn. Premium brandy manufacturer Tilaknagar Industries Ltd, the owner of India's biggest and the world's second biggest brandy brand Mansion House , is reportedly eying a big foray into whisky business. ET has reported based on information from people familiar with the matter that Tilaknagar Industries is the frontrunner in the race for the Imperial Blue whisky brand being sold by the French alcobev major Pernod Ricard Imperial Blue, Pernod Ricard's largest brand by volume, has an estimated enterprise value of up to $600 million, as per the ET report, and a deal will mean the largest M&A in India's liquor industry in more than a decade after Diageo's buyout of United Spirits in 2013 for $1.9 billion. Chairman-cum-Managing Director Amit Dahanukar refused to comment on ET's query on the proposed deal.Tilaknagar has been asked to submit a binding bid by June 23, as per the ET report, while Inbrew Beverages , established by London-based serial entrepreneur Ravi Deol, is also in the reckoning.India is one of the biggest markets for brandy, accounting for nearly 40% of the overall consumption globally. In India, brandy is the second most consumed alcoholic beverage after whisky, but more than 98% is sold in southern India, especially Kerala and Tamil Nadu.Tilaknagar Industries, or TIL, India's fifth-largest alcoholic beverage firm by market cap, is the leader by far in India's brandy business. The company enjoys a leadership position in the segment with 94% of total volume) in the IMFL industry, with a market share of nearly 25%, excluding Tamil Nadu, as per a CRISIL analysis from December last year. Within the prestige and above segment, TIL has around 30% market share. Brandy is the second largest in the spirits category, forming over 20% volume share after whiskey (55%).Tilaknagar was founded in 1933, as The Maharashtra Sugar Mills Ltd by Mahadev L Dahanukar. In the 1970s, the company shifted its focus to alcohol production, and soon became a prominent manufacturer of alcoholic beverage (alcobev) brands in India. Tilaknagar is the maker of India's highest-selling premium brandy brands, Mansion House and Courrier Napoleon. The company offers over 15 different brands of brandy, whiskey, gin, rum and vodka, with a focus on the 'prestige-and-above' segments. Manufacturing operations span 19 units, including 4 owned units and 15 contract manufacturing units.The company has a strong distribution network of nearly 40,000 outlets across the country, and sells mainly through state corporations, direct sales, and distributors. It also exports to Africa, Middle East, East and South-East Asia and Europe, as per CRISIL. Tilaknagar is a major player in south India, which accounted for around 86% of total revenue. The promoters have experience of more than five decades and strong relationships with dealers/distributors. CMD Amit Dahanukar joined the board in 2001 and has been instrumental in guiding the company through its troubled phase and reviving the business prospects.Brandy forms nearly 20% of the overall IMFL market in India. Tilaknagar is the largest player in the brandy segment with nearly 25% market share excluding Tamil Nadu (market dominated by local players). Tilaknagar has a strong foothold and brand-recall in South Indian states (AP, Telangana, Karnataka, Kerala and Puducherry). In fiscal 2024, the company sold over 11.2 million cases (1 case = 9 litres), reflecting 16% increase compared to fiscal 2023, with southern states contributing 86% of the volume, as per CRISIL.For Tilaknagar, a successful acquisition of Imperial Blue would help expand its brand as well as non-brandy portfolio. While brandy is a dominant category in Tilaknagar's portfolio, the company forayed into whisky in 2012, leveraging flagship brand Mansion House. However, more than 90% of its sales still comes from brandy. During its earnings call on May 21, chairman and managing director Dahanukar said Tilaknagar will focus on enhancing its presence within brandy and other IMFL categories through its own brands and strategic investments. Tilaknagar had earlier acquired Round The Cocktails, Spaceman Spirits and Incredible Spirits. Tilaknagar has been in a long-drawn trademark dispute with Allied Blenders & Distillers (ABD) and Dutch distiller Herman Jansen Beverages (formerly UTO) over its Mansion House brand.Tilaknagar, if it indeed ends up buying Imperial Blue, will be making a big push into the whisky market when it is in ferment. After several years of growth, demand for spirits across categories slowed down to 1.6% in FY25, falling from 4.2% a year ago. Volume sales of whiskey, which accounts for roughly two-thirds of the market, saw a muted 1.5% increase in volume last fiscal while brandy and vodka sales were flat, according to excise department data reported by ET. Brandy grew less than 1%. Globally too, liquor sales fell 1% by volume in 2024, according to alcohol market researcher IWSR, which attributed this to large markets such as China and India failing to live up to growth projections. Spirits slowdown in India has been attributed mainly to distribution changes in a few states, higher taxes and tipplers cutting back on most discretionary spends including alcobev.Notwithstanding these disruptions, liquor industry in India holds immense potential. Despite being the world's most populous nation with more than 1.4 billion inhabitants, India's drinking consumer base is estimated at around 300 million-of whom nearly half rely on cheap, unbranded liquor.In 2024, India's alcohol industry is valued at approx. $64.19 billion with projections indicating it could reach $115.27 billion by 2034 at a CAGR of 6.7 per cent, as per an ET report. Spirits like whisky, vodka and rum are expected to dominate the market reaching USD 50.55 billion by 2034. India remains one of the world's largest consumers of whisky, accounting for over 48 per cent of global whisky consumption.India's liquor industry is transforming in response to consumer trends and policy shifts. Premiumization and innovation are driving growth, with consumers willing to pay more for craft breweries, premium whiskies and flavored spirits. Companies are adapting by launching unique offerings tailored to local tastes. Meanwhile, although e-commerce restrictions remain in place, some states are exploring online liquor delivery, which could unlock new growth opportunities. Policy reforms are also gaining momentum, with increasing pressure on state governments to streamline tax structures and modernize the industry. Progressive moves by states like reduced state duties by 10-15 per cent across various alcoholic beverage segments in Karnataka suggest a shift towards a more business-friendly environment.While the FTA with the UK, which includes deep cuts in import duties on several spirits, and a possible trade deal with the US can make make imported liquor more affordable in India which may challenge local liquor brands in the premium and luxury space, Imperial Blue whisky brand may not be impacted much as it straddles the space between mass and premium.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
40 minutes ago
- Hindustan Times
UK expresses support for India's fight against cross-border terrorism
New Delhi: Prime Minister Narendra Modi and external affairs minister S Jaishankar reiterated India's 'zero tolerance' policy for terrorism and the need for decisive international action against terror and those who support it during meetings with British foreign secretary David Lammy on Saturday. Modi said India valued Britain's backing for the fight against cross-border terrorism while Jaishankar said India's partners should understand the 'zero tolerance' policy for terrorism as the country will never accept the perpetrators of terrorism being treated at par with victims. The remarks by the top Indian leadership, made against the backdrop of several countries hyphenating India and Pakistan during last month's military clashes, reiterated to the world community New Delhi's new approach to fighting cross-border terrorism backed by Islamabad. Britain's foreign office had said before Lammy's meeting with Indian interlocutors that he would address how the current peace between India and Pakistan can be supported for regional stability. Modi said in a social media post after meeting Lammy that he values 'UK's support for India's fight against cross-border terrorism'. He also appreciated Lammy's 'substantive contribution to the remarkable progress in our Comprehensive Strategic Partnership, further strengthened by the recently concluded FTA'. A statement from the external affairs ministry said Modi had 'underscored the need for a decisive international action against terrorism and those who support it' - an apparent reference to Pakistan. The two leaders discussed regional and global issues and Lammy 'strongly condemned the Pahalgam terror attack and expressed support for India's fight against cross-border terrorism', the statement said. Modi also expressed satisfaction at the conclusion of the free trade agreement (FTA) and the double contribution convention and expressed satisfaction at the deepening of the bilateral comprehensive strategic partnership. He welcomed continued collaboration under the Technology Security Initiative (TSI), especially its potential to 'shape trusted and secure innovation ecosystems'. Modi also reiterated his invitation to British Prime Minister Keir Starmer to visit India. Lammy arrived in New Delhi on Saturday morning for meetings to review the bilateral partnership, especially trade and strategic ties, a month after India and the UK finalised the FTA. Lammy had visited Pakistan shortly after New Delhi and Islamabad reached an understanding on halting military actions on May 10. In his opening remarks at the meeting with Lammy, Jaishankar thanked the UK government for the strong condemnation of the 'barbaric terrorist attack' in Pahalgam and its support to India in the fight against terror. 'We practice a policy of zero tolerance against terrorism and expect our partners to understand it, and we will never countenance perpetrators of evil being put at par with its victims,' he said. Lammy responded by referring to the 'horrific terrorist attack' and said Prime Minister Starmer had asked him to convey the 'deep condolences of the UK and a hand of friendship with India and support as we deal with the terrorism threat in a comprehensive manner'. Jaishankar described the finalisation of the FTA and double contribution convention as a milestone that will boost two-way trade and investment and have a 'positive effect on other strategic aspects' of bilateral relations, besides strengthening supply and value chains. He also referred to other significant initiatives that have seen progress, such as the TSI for deeper collaboration in strategic sectors such as AI, semiconductors, telecom, quantum computing, health technology, critical minerals and advanced materials. The TSI, coordinated by the national security advisers of India and the UK, was launched during Lammy's last visit to New Delhi in July 2024. 'We have also launched the Strategic Exports and Technology Cooperation Dialogue, the first meeting of which was held…this week. This will enhance, among others. the TSI's effectiveness in promoting trade in critical and emerging technologies, including the resolution of relevant licencing or regulatory issues,' Jaishankar said. The India-UK infrastructure financial bridge can unlock quality long-term capital flows from Britain to India and contribute to infrastructure development, and there is also good collaboration in the education sector with many UK universities planning to establish campuses in India, he said. Lammy described the finalisation of the FTA as Britain winning a 'trophy' and the beginning of a new era in bilateral ties since it is expected to increase will trade by £25.5 billion. He also conveyed the UK's interest in enhancing cooperation in key sectors such as trade, investment, defence and security, technology, innovation and clean energy. Lammy also met commerce minister Piyush Goyal and National Security Adviser Ajit Doval. A readout from Britain's foreign office said bolstering economic and migration ties and delivering growth opportunities for British businesses topped the agenda for Lammy's visit. Lammy also focused on the migration partnership, including 'work on safeguarding citizens and securing borders in both countries'. The readout added, 'Addressing migration remains a top priority for the government - the Foreign Secretary is focused on working internationally with global partners to secure the UK's borders at home.' Lammy's visit would also prepare the grounds for a visit by Starmer to India for the formal signing of the FTA. Both countries are currently involved in the legal scrubbing of the FTA, a process expected to be completed in three months. During 2023-24, India was the UK's second largest source of investments in terms of number of projects for the fifth consecutive year. India was the UK's 11th largest trading partner in 2024, accounting for 2.4% of total British trade, and two-way trade in goods and services was worth nearly $57 billion in 2024. The FTA is expected to increase bilateral trade by $34 billion a year from 2040. Within a decade of the deal being implemented, 85% of British products will become tariff-free in India. Indian tariffs on alcohol will be cut from 150% to 75%, falling to 40% by the 10th year of the deal. India will also cut automotive tariffs from more than 100% to 10%. The UK too has agreed to cut its tariffs and 99% of India's exports to Britain will face no duties.
The Hindu
42 minutes ago
- The Hindu
German packaging ink major Siegwerk plans to double capacity in India as economy grows
With the demand of packaging ink growing in double digit in India in sync with the country's economic growth, Siegwerk Druckfarben AG & Co, a 200-year-old German company clocking an annual turnover of over ₹1,000 crore in India, is planning to double it's capacity in the country in 5 years as rising consumerism has given rise to growth in branded products needing safe packaging. To cater to the domestic demand and achieve it's target, the company has decided to add capacity at it's existing factory in Assam and plans a new factory in Western India to cater to the southern & western markets where packaging printing has picked up over the past years. 'In the last 5 years, we have grown at an annual compounded growth of more than 12% to 13 %. And we see the same continue in the future. We plan to double by 2030. In the next 5 years, we would cross ₹2,000 crore revenue,' said Ashish Pradhan, President, Asia, Siegwerk in an interview. 'The macroeconomics is helping us. The GDP growth in India which is one of the largest and fastest growing economy in the world and the demographic dividend is helping us,' he said. 'The capita consumption is a fraction of what we have in the developed world and there is still a lot of head room to grow here,' he added. Stating that the market economics were favorable, he said the company was hopeful of achieving upto 20% market share from about 12% now in India. On the capacity expansion he said, 'We have one large plant in Guwahati, which is the second-largest plant in the whole Siegwerk group. We are making it bigger now with more capacity, which will take us to 2027-28. And then, we will invest in a brand-new facility in the West either in Gujarat or Maharashtra.' 'We are also continuously looking for acquisitions in the Indian market. Over the next five years, in India, we will see at least 50% more investment than what we have already had so far,' he added. 'Our growth is linked to packaging. Typically packaging grows a little faster than GDP. So, if India's GDP is 6.5%, we can expect packaging to grow at about 8-9%. And we are growing at 12-15%,' said Mr. Pradhan. 'It indicates that there is a strong, robust consumption of consumers of all kinds of FMCG products. And the numbers tell us, that the market is becoming more brand-focused rather than an unbranded market. And that will aid packaging,' he said. The company with 800 employees accounts for about 13-14% of the Group's sales. It produces about 25-30,000 tons of ink a year. As far as sustainability & recycling is concerned coatings will be a very, very important for the company. 'Because globally, circular economy is a big topic. We have invested heavily into getting top-notch scientists to work on this in Germany and India,' he said 'So, that also tells you how much importance India has, not only just manufacturing and supplying, also in developing technology,' he pointed out. Mr. Pradhan said the company would contribute more for safe packaging as the awareness on health and nutrition has increased. 'In 2020, the government had banned the use of toluene as a chemical in inks used for food packaging. And that has really helped us grow because we were the pioneers to get toluene-free inks into the country,' he said. 'Today the generation Z is very very careful about these things, so that will be the other big driving factor that the industry has to take care of, and I think we are very well placed because we are the global leaders in safe packaging,' he added. On the policy related changes that could help the industry grow he said the biggest thing in everyone's mind is what is going to happen on the circularity and recycling front. 'Today paper cups has a PE coating and that PE coating on the paper prevents that paper to be recycled. So now we have come up with a coating to replace the PE and then we put it on the paper, and all this has to be driven by regulation,' he said. 'This whole regulation push in circularity and sustainability is what I would look for. That is for the future for packaging industry whether it is paperization, use more paper, less plastic' he emphasised.
India.com
42 minutes ago
- India.com
Meet Indian billionaire who plans to buy THIS major diamond company; not Mukesh Ambani, Gautam Adani, Kumar Mangalam Birla, the name is...
(File) Billionaire Anil Agarwal is reportedly eyeing to venture into the diamond business, and has expressed interest in acquiring diamond giant De Beers. As per a Reuters report, De Beers has drawn interest from at least six consortia, including Vedanta Group Chairman Anil Agarwal, Indian diamond firms and Qatari investment funds. Anglo American, which owns De Beers, is divesting the diamond firm, as it makes a push to focus on its core assets in copper and iron ore. The development comes amid a global decline in diamond prices. Indian diamond companies including KGK Group and Kapu Gems, which dominate the domestic cutting and polishing trade and are De Beers' biggest customers, have also expressed interest separately, as part of bigger groups, according to Reuters. Anil Agarwal to buy De Beers? Citing sources, the report said that Anil Agarwal, the chairman of Vedanta Resources, which owns mining operations in Zambia and South Africa, is among the interested parties as part of a bigger group. However, Anglo American and Anil Agarwal have declined to comment on the matter. Notably, Anil Agarwal became the largest shareholder in Anglo American in 2017 with 20% stake. But he exited the same two years later, citing his investment goals had been meet after the stock price doubled. Anglo American has valued De Beers at $4.9 billion after recording $3.5 billion in losses over the last two years. The company has retained its brokers Morgan Stanley, Goldman Sachs and Centerview as financial advisers to explore a potential sale, demerger, or public listing, according to the report. Who is Anil Agarwal? Known by his famous moniker the 'metal king', Anil Agarwal is the founder and chairman of Vedanta Resources Limited, and controls Vedanta Resources through Volcan Investments, a holding vehicle with a 100% stake in the business. Born and raised in a Marwadi family in Patna, Bihar, Anil's father, Dwarka Prasad Agarwal owned a small aluminum conductor business, which young Anil joined after completing his schooling at Patna's Miller High School. At 19, Anil Agarwal arrived in Mumbai (then Bombay), and began trading in scrap metal in the mid 1970s, collecting scrap metal from cable companies in other states and selling it in Mumbai. In April 2003, Anil Agarwal established the Vedanta Resources Limited, which is today the largest mining and non-ferrous metals company in India, with mining operations in Australia and Zambia and oil and gas operations in three countries. The firm is headquartered in London, UK.
