The Hindu Business Line : Diageo may brew Guinness beer locally

“We are talking to various breweries. We could manufacture it (Guinness beer) locally,” Diageo India Managing Director, Mr Asif Adil, told Business Line. He said, currently Guinness stout beer sells at Rs 450 per can of 330 ml . Once the company starts manufacturing the beer, the price could come down to Rs 80-Rs 100 for a 750 ml bottle.

Diageo is looking at a share of between 5 and 7 per cent of the total beer market, whose size in volume terms currently is around 120 million cases (consisting of twelve 750 ml bottle each). Guinness now sells about two containers (of 2,400 cases) every month in India.

Prospects bright

“Initially we had a toehold approach for the market. But because of the staggering response we have received for the beer, we find a great future for the brand in India,” Mr Adil said.

Mr Adil said with the reduction of additional customs duty, most of the company’s brands have become extremely competitive in the market.

Hence, Diageo wants to push sales of some of its marquee brands aggressively. First of these would be Johnny Walker Red Label, which now sells at Rs 950 for a 750 ml bottle in markets such as Punjab. The company wants to go in for mass distribution of the brand and also wants to activate the Baileys liqueur brand in India, Mr Adil said.

He said the company wants to position itself as a ‘jewel in the crown’ of Diageo Asia-Pacific region.

“We may not be big but we want to be the best in the region,” Mr Adil said. He said the company wants to bring in fresh talent to drive its growth and is also setting up its own sales team to consolidate operations in the country.

Diageo is also planning to set up a bottling plant in Eastern India to expand its market there. It already has four bottling plants, which are in Aurangabad, Indore, Ambala and near Bangalore.

It also has an arrangement with a local winery in Nashik to manufacture its wine brands.

Scouting for winery

There is a possibility of the company scouting for a winery in Karnataka as well.

Mr Adil said Diageo’s operations in India have recorded a growth of about 35 per cent last year.

He said the company’s product Shark Tooth sold about 8 lakh cases during 2006 and during the first 100 days of its launch, Master Stroke sold about 1 lakh cases.