Liquor demand still dull, could pick up soon: United Spirits
United Spirits, India's biggest liquor firm, said there is a slowdown in liquor demand because tipplers are limiting social occasions although they are still not downgrading to lower-priced products.
The Diageo-controlled company expects the pace of growth to recover in the second half of the year due to a lower base, although it will still be slower compared with the demand surge seen after the pandemic.
«On the demand front, the growth has moderated from two years ago. And at the lower end, we continue to see some pressure. Moderation was there during the wedding season, and so growth is continuing to be slower,» the company's managing director and chief executive Hina Nagarajan told analysts during an earnings call.
«The last couple of quarters look slightly better, but not back on track,» she added.
This moderation in liquor demand comes amid a slowdown in discretionary spending.
Nagarajan said consumers were not downgrading, but were managing their spending and number of social outings.
The maker of McDowell's, Johnnie Walker and Smirnoff posted net sales growth of 10.5% in fiscal 2024, compared with 19.5% the previous year. The company's prestige-and-above portfolio, which accounts for 90% of the sales, posted growth of 11.9%, nearly half of 22.8% it had reported in FY23.
The strong growth in FY23 had resulted in an unfavourable base effect, she said. «The next couple of quarters, that is going to continue and then by the time we reach October, December, this base effect will start normalising,» she
