United Spirits Ltd, the Indian arm of British beverage giant Diageo, anticipates a significant drop in consumer prices and a corresponding increase in sales volumes following the implementation of the long-awaited free trade agreement (FTA) between India and the United Kingdom.

Speaking during an investor call on Friday, United Spirits’ Managing Director Praveen Someshwar and Chief Financial Officer Pradeep Jain said the company is prepared to pass on the benefits of reduced import duties directly to consumers. The FTA is expected to slash import duties on alcoholic beverages from the current 150% to 75%.

“Reduction of duties from 150 per cent to 75 per cent will typically lead to about a high single-digit reduction in consumer prices,” said Someshwar, highlighting the likely impact on retail pricing. He added that this move would not only make premium international spirits more affordable for Indian consumers but also spur demand across categories.

The India-UK FTA, which is nearing its final stages after several rounds of negotiations, is poised to create new trade avenues and bolster bilateral economic ties. For Diageo, which owns popular brands like Johnnie Walker, Guinness, and Tanqueray, this presents a significant opportunity to expand its market share in India, one of the world’s fastest-growing alcohol markets.

Industry experts believe that the duty reduction could make imported spirits more competitive against locally-produced alternatives, fueling premiumisation trends in the country’s beverage alcohol sector.

The company’s optimism also comes amid Diageo’s broader strategy to consolidate its premium portfolio and cater to evolving consumer preferences in India’s expanding middle and upper-middle class segments.

As the industry awaits official confirmation and a timeline for the FTA’s rollout, Diageo India remains bullish about the long-term gains from increased affordability and expanded consumer reach.

Diageo Expects High Single-Digit Price Cuts, Volume Boost with India-UK FTA

United Spirits Ltd, the Indian arm of British beverage giant Diageo, anticipates a significant drop in consumer prices and a corresponding increase in sales volumes following the implementation of the long-awaited free trade agreement (FTA) between India and the United Kingdom.

Speaking during an investor call on Friday, United Spirits’ Managing Director Praveen Someshwar and Chief Financial Officer Pradeep Jain said the company is prepared to pass on the benefits of reduced import duties directly to consumers. The FTA is expected to slash import duties on alcoholic beverages from the current 150% to 75%.

“Reduction of duties from 150 per cent to 75 per cent will typically lead to about a high single-digit reduction in consumer prices,” said Someshwar, highlighting the likely impact on retail pricing. He added that this move would not only make premium international spirits more affordable for Indian consumers but also spur demand across categories.

The India-UK FTA, which is nearing its final stages after several rounds of negotiations, is poised to create new trade avenues and bolster bilateral economic ties. For Diageo, which owns popular brands like Johnnie Walker, Guinness, and Tanqueray, this presents a significant opportunity to expand its market share in India, one of the world’s fastest-growing alcohol markets.

Industry experts believe that the duty reduction could make imported spirits more competitive against locally-produced alternatives, fueling premiumisation trends in the country’s beverage alcohol sector.

The company’s optimism also comes amid Diageo’s broader strategy to consolidate its premium portfolio and cater to evolving consumer preferences in India’s expanding middle and upper-middle class segments.

As the industry awaits official confirmation and a timeline for the FTA’s rollout, Diageo India remains bullish about the long-term gains from increased affordability and expanded consumer reach.