Mike Southgate, the director of developing markets (India, Australia, New Zealand, Africa, Middle East & CIS countries) at the UK-based premium whisky maker Whyte & Mackay, expressed that the free trade agreement (FTA) between the UK and India would streamline cross trade “in both directions.”
“FTA is a very live topic right now; where that is going to land, I don’t know. I would hope that the agreement is reached and hope that it makes cross trade easier both ways,” Southgate said on an India market visit.
For the past year and a half, discussions surrounding the FTA between the UK and India have remained inconclusive due to diverging interests. The UK seeks reduced tariffs on its Scotch whisky to facilitate trade, but this proposition raises concerns among Indian whisky makers who fear it could negatively impact their business. Mike Southgate highlighted that Whyte & Mackay, renowned for selling Dalmore and Jura whisky in India, has been experiencing significant benefits in the Indian market.
According to him, India holds a position of utmost importance as a priority market for Whyte & Mackay, second only to Australia in terms of its rapid growth rate among the developing markets the company is targeting.
“The growth potential is enormous and the outlook for the future is significant in India, driven by a younger population, a lot more premiumisation of retail spaces, a more balanced shopper profile and people looking to trade-up,” he said.
He mentioned that although inflation continues to pose a challenge, certain changes in taxes within some states have had a positive impact on the market, making premium luxury brands more accessible and affordable to consumers.
According to a report by IWSR Drinks Market Analysis, India is projected to emerge as a significant volume growth market for the entire alcohol beverages industry from 2022 to 2027, primarily driven by brown spirits. The report highlights that Indian consumers are consistently upgrading their preferences within whisky, brandy, rum, vodka, and gin categories, encouraged by the rise in disposable incomes among the middle-class, the easing of pandemic-related restrictions, and the enhanced quality, diversity, and accessibility of products in the retail sector.
Southgate said single malt whisky, which is Whyte & Mackay’s core focus category, “is one of the driving forces” within spirits. “We will be introducing additional variants of single malts in India this year,” he said. On the company’s relatively smaller portfolio so far in India, he said “We’re new in the market; it takes time to seed and grow.”
He added, “Each state is like dealing with a new country; it is very complex. Yet, the growth outlook for the next five years for India is very positive.”