The company this week completed the sale of its Imperial Blue whisky, among India’s largest-selling mass brands, to Tilaknagar Industries. The move, chief executive Jean Touboul said, frees resources for higher-margin categories and accelerates Pernod Ricard’s decade-long shift toward premiumization.
“The disposal (of Imperial Blue) and launch of Exclamation! form part of the same strategy—which is about premiumization; we want to drive consumers up the ladder of pricing,” Touboul said in an interview with Mint on Tuesday, as the company announced the debut of its India-made spirits brand ‘Exclamation!’.
Imperial Blue sold nearly 20 million cases annually and contributed about 20% of India net sales, but delivered lower profitability at its roughly ₹400 price point. It was sold for a lump-sum consideration of ₹3,442 crore. By comparison, Royal Stag, the company’s largest brand, sells 32 million cases a year, while Blenders Pride does 10 million; a regular case contains 12 bottles of 750 ml.
With the exit, Pernod Ricard removes the lower rung of its portfolio and clears the way for growth in the mid-premium tier, especially brands priced around ₹700 to ₹1,100 per 750 ml where the company has been seeing faster consumer trade-up.
Exclamation!, priced at ₹700 in Haryana and ₹940 in Rajasthan, will span whisky, brandy, rum, vodka and gin variants, and will sit between Royal Stag and Blenders Pride from a pricing perspective. It will launch in five markets by December and expand to 14 states by June next year. Pernod Ricard plans to scale the brand to one million cases in its first 12 months.
“Introducing new brands is beneficial—it will increase competitive intensity for incumbents. Secondly, the chosen category is ideal: the mid- to upper-prestige segment, where growth rates are at the higher end for the industry. Volume growth is also strong, ranging from high single digits to low double digits, and margins are better. It’s an apt strategy to target this segment, which offers strong growth potential and room for meaningful innovation,” said Karan Taurani, EVP, Elara Capital.
Growth levers and hurdles
Pernod Ricard’s strategic shift comes as India cements its position among the world’s fastest-growing alcohol markets.
India’s alcohol industry grew 9% by value in 2024 to just under $40 billion, according to London-based consultant IWSR, an increase of more than $3 billion in 12 months that propelled the country into the global top five by value. Volume growth touched 6%, placing India eighth worldwide by size, just ahead of the UK and Spain, Mint reported in June.
But the industry is also navigating volatile regulation. Earlier this year, India and the UK finalized a free-trade agreement (FTA) that will cut import duties on Scotch whisky and gin from 150% to 75% initially, with a further reduction to 40% over a decade.
Touboul said the FTA will lower retail prices of bottled-in-origin Scotch brands such as Chivas Regal, Ballantine’s and The Glenlivet by 10-15%, depending on state taxes. “More people will be able to access these products, and we expect higher growth.”
Following the Imperial Blue sale, imported brands make up about 20% of Pernod Ricard India’s business, with Scotch accounting for 12-15%. Brands such as Jameson, imported from Ireland, and Absolut, made in Sweden, fall outside the UK-origin categories and will not benefit from the duty cut.
India is the company’s second-largest market after the US, having surpassed China by net sales in fiscal 2023. Pernod Ricard sells mass-market labels such as Royal Stag, Blenders Pride and 100 Pipers, along with premium brands including Chivas Regal, Ballantine’s, The Glenlivet and Jameson Irish Whiskey.
Even as premium consumption rises, state tax regimes remain a challenge. In June, Maharashtra, a key alcohol-consuming market, raised excise duties on Indian Made Foreign Liquor by more than 50%, with duties on country liquor and imported premium spirits also climbing. Pernod Ricard has taken a 35-40% price increase in the state.
“More than 10% of our net sales come from Maharashtra—it used to be the most important market but because of the tax increase, it has gone down in our state rankings,” Touboul said. “The retail price increase that would have resulted from the excise revision was 65-70%. We absorbed part of it. Even after mitigating it, consumers still saw a 35-40% retail price increase. Naturally, most of them traded down because they simply cannot afford that jump.”
Rival United Spirits Ltd, the Indian arm of Diageo, has also raised prices in the state by 30-35%.
Pernod Ricard largest liquor company by sales in India and competes with United Spirits Ltd.
Outlook
Pernod Ricard India posted consolidated revenue from operations of ₹26,773.23 crore in FY24, up 7% year-on-year, according to Tofler. The company operates 24 manufacturing units across 18 states. FY25 numbers were not available.
Despite regulatory churn and price pressure in key markets, Touboul remains optimistic about the medium term. Pernod Ricard expects low double-digit growth in India over the next five to ten years. “If you grow at low double digits for 10 years, you triple the business,” he said.
Consumer demand, he added, remains “okay,” with early festive-season indicators turning positive. “Usage of credit cards and macro indicators point to stronger consumption compared to previous years,” he said.
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