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United Spirits sales rise by 17.7% in Q2

Diageo’s Indian arm, United Spirits, saw net sales increase by double digits in the three months to 30 September 2022.

Diageo India brands
United Spirits’ portfolio includes Indian whiskies McDowell’s No. 1 and Royal Challenge

The firm’s net sales rose by 17.7% in the second quarter of fiscal 2023 due to ‘resilient consumer demand in the off-trade’ and a rebound in the on-trade.

Hina Nagarajan, CEO of Diageo India, said: “We have delivered a quarter of strong top-line growth and resilient bottom-line performance.

“The performance is underpinned by continued growth momentum and strong mix improvement from recent innovation and brand renovations.”

The firm’s ‘prestige and above’ portfolio increased net sales by 23.1%, boosted by ‘innovation and renovation’ from previous quarters.

The ‘popular’ division saw net sales rise by 1.7%, with priority states rising by 3.8% within the segment.

During the three-month period, United Spirits completed the sale of 32 brands within its ‘popular’ segment to Inbrew Beverages, said to reflect the firm’s ‘sharpened focus’ on its ‘prestige and above’ portfolio. The transaction included the sale of Indian whiskies Haywards and Old Tavern.

As part of the deal, the company also secured franchise agreements for 11 other ‘popular’ brands with Inbrew.

The company noted it had gained a profit of 381 crores (US$46 million) arising from the sale during the quarter.

In August, United Spirits temporarily suspended sales of several brands in certain Indian states amid ongoing price discussions with government authorities.

Nagarajan said the “external environment remained challenging with ongoing Scotch pricing negotiations in select states, route-to-market change in Delhi and unprecedented levels of input cost inflation”.

The CEO expects inflation challenges to continue, and noted Scotch price discussions have “successfully concluded” in several states.

She continued: “We are focused on maintaining the momentum while driving revenue growth management initiatives and ramping up productivity across the value chain.

“With the consumer at the heart of our business, the strength of our reshaped portfolio and the investment we are making to accelerate our strategic priorities, we are confident of growing the business in a consistent and sustainable way to create long-term value for all our stakeholders.”

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