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John Distilleries, maker of leading whisky brand Original Choice, is in discussions with multinationals to explore merger and acquisition deals.
“I am open to discuss anything that makes economic sense,” Chairman Paul P John told Business Line .
Several key foreign liquor companies are keen to consolidate their businesses in India’s liquor industry, which has just a handful of national players, but a multitude of regional players, he said.
Small players With Pernod Ricard of France and Diageo of the UK strengthening their presence in the country, it is just a matter of time before the smaller players either merge each other or get acquired by multinationals, he added.
“Globally, India is perhaps one of the few growth markets for the liquor makers. Therefore, it makes sense for them to get a foothold through acquisitions.”
John, however, denied that his company had been approached by either Pernod Ricard, which owns Absolut vodka, or Diageo, makers of the iconic Johnnie Walker whisky. John Distilleries’ Original Choice is the seventh largest whisky brand globally and sells 7.8 million cases every year.
The chairman added his company is ready for talks with any potential buyer. “I will also discuss with my equity partners and they, too, are open about it. I am here for doing business.”
Gaja Capital Partners, an India-focused private equity firm, has invested ₹75 crore in John Distilleries and holds up to 40 per cent stake.
The company does not look for further infusion of funds as it has sufficient funding options, John said.
The company is also in talks with a few domestic liquor makers for acquiring some of their brands.
Incidentally, Tilaknagar Industries is reported to be in talks with several companies for sale of its popular brand, Mansion House brandy.
John Distilleries saw flat growth last fiscal because of certain changes being carried out at its production lines. It expects to grow 25 per cent this fiscal to 12.5 million cases. The company also has a stock of 12 million cases of malt spirit, which will take about 10 years to mature.
John added the company is entering the premium segment in a big way and has recently introduced a few brands in that category.
“Slowly, the number of economy brands in the country will get phased out as the income levels of consumers go up.”
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