Pernod Ricard India eyes market expansion, inks MoU for malt spirit distillery venture

Pernod Ricard India, a leading multinational in the alcohol-beverage industry, is strategically targeting growth opportunities in India, says CFO Richa Singh.

Singh emphasized the company's focus on expansion, highlighting its exploration of investments through acquisitions, partnerships and new product ventures.

"We are actively seeking opportunities to invest in the Indian market, either through acquisitions, partnerships, or by entering new product categories. The company's focus is on identifying and capitalizing on growth opportunities in the rapidly evolving Indian spirits market," Singh told ETCFO.

Building upon statements made by the CFO in January, Pernod Ricard India has recently signed a Memorandum of Understanding with the Government of Maharashtra to establish malt spirit distilleries in Nagpur.

Singh reiterated the company's commitment to growth amidst a positive outlook for the Indian market, citing the increasing demand for premium spirits and rising disposable incomes among the population. "We are actively seeking avenues to invest in India, leveraging its evolving spirits market," the CFO said.

Furthermore, the CFO emphasized the company's efforts to enhance margins through premiumization, cost optimization, and efficient supply chain management. "We are dedicated to improving both gross and operating margins by emphasizing cost management and operational efficiency," Singh stated.

Challenges in Indian Spirits Market

Acknowledging industry challenges, Singh highlighted navigating complex regulations and managing economic uncertainties as significant hurdles.

"One of the main challenges of working in the alcohol-beverage industry is navigating the complex regulatory environment, including changes in taxation, licensing, and advertising restrictions, which could pose significant challenges," the CFO said.

She added that managing the impact of economic uncertainties, such as currency fluctuations, inflation, and changes in consumer spending patterns, on the company's performance is another risk that we usually plan and strategize for on an annual basis.

However, she also noted opportunities in emerging markets, underscoring the importance of organic growth due to limited merger and acquisition prospects. Singh emphasized the need for agility in responding to industry dynamics.

FTA with UK: Potential Boost for Indian Alcohol-Beverage Industry, says CFO

Regarding the potential Free Trade Agreement (FTA) with the United Kingdom, Singh sees promising prospects for the industry. Anticipating a boost to various sectors, including alcohol-beverages, Singh highlighted the potential tariff liberalization, particularly beneficial for scotch whisky. This could significantly reduce prices and boost exports, offering consumers a wider range of choices. "With the Indian alcohol-beverage industry poised to reach $64 billion by 2030, Pernod Ricard India is strategically positioned for growth, leveraging market opportunities and potential trade advantages," she added.