Diageo Enters Indian Joint Venture with Radico

23/08/06 Diageo, the world’s leading premium Drinks Company, and Radico Khaitan Ltd, the second largest drinks company in India have announced that the two companies have reached an agreement to form a 50:50 joint venture to exploit the large and developing Indian made foreign liquor (IMFL) segment. This is subject to obtaining the requisite regulatory approvals.

Radico has three brands in the Millionaire Club Survey of Drinks International (U.K based trade magazine).Old Admiral Brandy & 8 PM Whisky were adjudged as the fastest growing brands in the world in their respective segments (2005) by Drinks International. Radico has the most awarded brands for Quality in its portfolio (2006)- Magic Moments Vodka, Old Admiral Rum, 8 PM Bermuda Rum, Old Admiral Brandy, Contessa Rum,8 PM Excellency Brandy, Whytehall Whisky & 8 PM Whisky (Monde Selection –Brussels & International Spirits Challenge-U.K)

The proposed venture will bring together the strengths of the two companies in brand marketing & distribution to create innovative international quality products for the Modern Indian consumer.

Dr. Lalit Khaitan, the Chairman of Radico Khaitan Ltd., commenting on the proposed venture stated that Radico was privileged to partner with Diageo, which is the blue chip in the premium alcohol beverages business worldwide.

Mr. Asif Adil, Managing Director of Diageo India added that Diageo was excited at partnering with a successful player such as Radico to bring new innovative products to delight the Indian consumers in the IMFL market.

The two companies will continue to operate in their own independent businesses outside of the JV and will maintain their respective brand portfolios.

Diageo noted that the IMFL segment has grown at 9% over the past decade and had a growth of 10-12% in the last two fiscal years. Changing lifestylesin India have seen the number of Indians who drink rise from 1 in 300 two decades ago to 1 in 20 today. Meanwhile there is a market opportunity because of increasing consumer demand for aspirational products.