Varun Beverages to foray into alcohol biz, set up subsidiary

New Delhi: Varun Beverages (VBL), PepsiCo's second-largest bottler globally, is set to enter the alcohol business, and has named former Diageo executive Prathmesh Mishra as chief executive officer and managing director of its proposed new subsidiary.

VBL will "incorporate a wholly-owned subsidiary company in India for ready-to-drink (RTD) alcoholic beverages and allied products, subject to requisite approvals," the company owned by Ravi Jaipuria's RJ Corp said in a stock exchange filing on Tuesday.

ET first reported in its July 25 edition that RJ Corp has tapped Mishra to steer the group's foray in alcoholic drinks. The company board has approved incorporation of the proposed entity, KIVA Spirits and Company, "with an authorised share capital of ₹10 crore and a paid-up equity share capital of ₹9 crore, with Varun Beverages holding the entire stake," the filing noted.


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VBL will also incorporate a joint venture company in Tunisia for the production and distribution of beverages including carbonated soft drinks, juices, water and dairy, subject to receipt of applicable requisite approvals.

The venture, to be named Varun Beverages Tunisia SA or another name approved by regulators, will be owned 75% by VBL and 25% by Bevanda Tunisia. The proposed share capital of the venture is Tunisian dinar 9 million, or about ₹29 crore, the company said. VBL, PepsiCo's exclusive bottling partner for nearly three decades, recently entered into a fresh agreement with the soft drinks company, removing restrictions to diversify into other drinks businesses.

Late last year, VBL had announced a distribution partnership with beer maker Carlsberg Breweries in Africa, a development which was widely seen as a precursor to a similar tie-up in India over time. Shares of VBL closed at ₹438 per script on the BSE on Tuesday, up 2.58% from the previous close.

India's alcoholic beverages market has regained momentum as well as higher competitive intensity in recent months, fuelled by rising demand for premium spirits. Spirits volumes increased nearly 4% in FY26 to 440 million cases, compared with 1.6% growth a year earlier.

Mishra, former managing director of Diageo Japan and Korea, has also held leadership roles at spirits makers Mohan Meakins and Pernod Ricard previously. He was part of Diageo's leadership team that oversaw the integration of United Spirits following its acquisition by the global liquor maker.