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UDV goes slow on Smirnoff Ice launch

29-January-2004
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UDV goes slow on Smirnoff Ice launch

Guinness UDV, part of Diageo Plc, would prefer to wait longer before bringing Smirnoff Ice, a ready-to-drink (RTD) product, into India. This follows the rather lacklustre beginning made by the RTD segment in the domestic alcoholic beverage market.

A top company official told Business Line that there was no timeframe fixed for the introduction of Smirnoff Ice in the country. "We will wait a bit longer as there is no point in rushing and having a problem in our hands," the official said. It must be mentioned that UDV had talked about the launch of Smirnoff Ice after rival Bacardi Martini came in with Bacardi Breezer more than a year ago. The company had also notified FIPB early last year about its plans to bring in the RTD offering. The industry observers said the company was waiting for the RTD market to show up with reasonable volumes before embarking on it.

The early movers in the nascent Indian RTD market include Bacardi Martini and the domestic spirits major, UB Spirits Division. Besides Bacardi Breezer and UBSPD's Shotz and Cruiser brands, a few other players, including Triumph Distillers & Vintners and Balrampur Chini, had also scripted foray into the RTD market, which has been billed as the next big growth area for the Indian spirits business. However, the industry figures for the first six months of the current financial year pegged RTD sales at around 1.55 lakh cases with Mumbai and Delhi accounting for bulk of it.

A UB group official said the performance of RTDs till date has been "disappointing". Admitting that the figures did not tally with the hype, the official said players such as UB were not left with much option but to push ahead with efforts to expand the market. "The positive side of the story is that RTDs took nearly 10 to 12 years to explode and attain maturity in markets such as Australia and the UK. So we reckon there is time, and we don't want to be left out in this potential huge market," UB sources said. UBSPD has entered into a tie-up with Independent Liquor of New Zealand, a major player in the global RTD market, to bring in international products and for technical know-how.

Meanwhile, the most markets, including important ones such as Bangalore, still remain elusive for RTDs owing to a lack of policy framework on the part of the federal governments. Further, the debate on whether RTDs should be taxed on a par with beer or hard spirits remain inconclusive.

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