Diageo India Sees Strong Premium Alcohol Demand Amid Rising Costs
Diageo India bets big on premium demand
Image: The Economic Times
Diageo India managing director Praveen Someshwar reported robust demand for premium alcohol in India, despite inflation and geopolitical tensions. The company anticipates strong double-digit growth in its prestige portfolio by fiscal 2027, although rising packaging and energy costs are squeezing margins.
- 01Diageo's prestige-and-above business, excluding Maharashtra and Andhra Pradesh, grew by 11.3% in fiscal 2026.
- 02The mid-prestige-and-above brands expanded by 17.1% during the same period.
- 03Packaging inflation is expected to reduce gross margins by 1.25 to 1.5 percentage points in the current quarter.
- 04The company anticipates a potential financial impact of up to ₹40 crore (approximately $4.8 million USD) due to rising costs.
- 05Someshwar highlighted the addition of around 100 million legal-drinking-age consumers in India over the next five years.
Advertisement
In-Article Ad
Diageo India, led by managing director Praveen Someshwar, remains optimistic about the demand for premium alcohol in India, which continues to thrive despite inflation and geopolitical challenges. The company, which controls United Spirits (USL), expects strong double-digit growth in its prestige-and-above portfolio by fiscal 2027, fueled by a young consumer base and rising incomes. In fiscal 2026, the prestige-and-above segment, excluding Maharashtra and Andhra Pradesh, recorded an 11.3% growth, while mid-prestige brands saw a 17.1% increase. However, the alcobev industry faces challenges as crude-linked inflation drives up costs for packaging materials, which could reduce gross margins by 1.25 to 1.5 percentage points in the current quarter, potentially costing the company up to ₹40 crore (approximately $4.8 million USD). To mitigate these pressures, Diageo plans to implement productivity gains and selective price increases, although prolonged geopolitical tensions may exacerbate margin challenges in the future.
Advertisement
In-Article Ad
Consumers may see price increases on premium alcoholic beverages as companies adjust to rising costs, affecting overall spending in the alcobev sector.
Advertisement
In-Article Ad
Reader Poll
Do you think premium alcohol demand will continue to grow in India?
Connecting to poll...
More about Diageo
Read the original article
Visit the source for the complete story.






