Angostura in 50:50 JV talks with John Distillers

BANGALORE: Caribbean spirits giant Angostura, makers of eponymous rums and bitters, has initiated talks for a joint venture with Bangalore-based Rs 600 crore John Distillers (JDL), one of the fastest growing IMFL companies.

Sources said talks centered around a 50:50 JV involved in manufacturing, distribution and marketing of the Angostura and the associate group company brands. Trinidad & Tobago based Angostura’s parent CL Financial has scotch and cognac interests in UK and France.

When contacted, JDL, makers of Original Choice Whisky, confirmed talks with Angostura but added negotiations were in early stages. In context, it must be mentioned that Angostura has had talks with another IMFL player Tilaknagar Industries Ltd for a JV in the past.

Florida based NRI Paul John led JDL is expected to close FY’07 with volume sales of 6.5 million cases (of 9 litre each) reporting 25/30% growth. The company has 14 bottling facilities including own plants in Goa, Karnataka, Chhatisgarh and Andhra Pradesh.

Industry observers are tracking Angostura’s efforts to break into the fast growing India spirits market given that the presence of international brands in domestic consumption is largely restricted to Bacardi, a white rum from the Bermuda based namesake spirits giant.

India’s rum consumption - accounting for 18/19% of the overall IMFL market estimated at around 130 million cases annually - is mostly in the regular priced category.

However, changing lifestyles on the back of a booming economy is expected benefit the premium drinks market in the country. In fact, drinks behemoth Diageo Plc is in the midst of launching one of its key brands Captain Morgan in the local market.

Angostura would also bring in locally bottled rum brands at competitive prices besides importing the flagship portfolio at the top end of the market, sources added.

Further, Angostura could also uncork the scotch whiskies from the stable of its associate company Burn Stewart in the UK. It must be mentioned that India and China have provided the impetus to the scotch whisky industry.

India is a strong whisky market - the flavour dominates with above 60% share of domestic consumption - providing significant growth opportunity for scotch whiskies going forward, observers added.