India is 5th largest mkt for Pernod Ricard

MUMBAI: The world's second-largest spirits maker Pernod Ricard's chief executive officer Pierre Pringuet said India has now emerged as the fifth-largest market for his company by value and profit. The country could soon move past Spain to become the fourth-largest after the US, China and France, he told TOI during his India visit last week.

"India is now at number five among Pernod's global markets. There's a tussle between India and Spain for the fourth slot, and it would be moving past Spain where the economy is not strong at the moment," Pringuet, who leads the $11-billion alcoholic beverage business, said in an interview. Pernod Ricard's India CEO Param Uberoi said the local unit would be poised for doubling volume sales to 40 million cases (of 9 litre each) within the next five years.

Pernod Ricard's India unit could be targeting annualized revenue of $1 billion in the next two years, analysts opined, citing the firm's strong over-25% growth in recent past. India's most profitable spirits company, and the country's most successful MNC in the sector, is tracking around $750 million revenue in the current financial year (the Paris-based firm follows a July-to-June fiscal). The operating profit is estimated at above $200 million.

Pernod Ricard does not comment on specific numbers of its unlisted Indian subsidiary.

The French giant's domestic operation, which had volume sales of just 1.5 million cases in 2001, is reporting annual volume sales of over 20 million cases almost a decade after starting operations in India. The robust growth of Pernod Ricard in the past one decade has boosted the confidence of international spirits firms that have struggled to shake off Vijay Mallya-led United Spirits' dominance in the domestic market.

Three local whiskies- Royal Stag (10.6), Imperial Blue (7) and Blender's Pride (2.6)-are Pernod Ricard's mainstay. International blended scotch whiskies Chivas Regal 12-Year-Old, Ballantine's and Absolut Vodka, besides locally bottled scotch whisky 100 Pipers, are the other key products for Pernod Ricard India.

"We have a strong blend of local and international brands leading growth globally," Pringuet said, while explaining that he would not look for acquisitions in markets like India that are reporting such strong numbers. "The market for global brands are getting broad-based as more aspirational Indians are trading up to these brands," Uberoi added.

With 20 million cases now, Pernod Ricard is just one-sixth of its domestic leader United Spirits by volume but reported a higher profit before tax in FY10. The local unit's operating margin, estimated at 24%, is way ahead of its domestic rivals USL and Radico Khaitan, as it continues to build distribution clout focused on the profitable segments of India's spirits market.