A recent report from Reuters states that India has asked its Canteen Stores Department (CSD) to stop procuring imported Scotch for its 4,000 military stores. Signalling that it could be a challenge for international companies like Diageo and Pernod Ricard. Reports indicate that imported liquor sales at defence stores generate only about $17 million in annual sales, which isn’t a lot, but would still act as a dampener for international brands.
The report states that an internal order was issued on October 19th of this year by the defence ministry, stating that in future, ‘procurement of direct imported items shall not be undertaken’. The order also said that the issue had been discussed with the Army, Air Force and the Navy in May and July, and was aimed at supporting Prime Minister Narendra Modi’s campaign to promote domestic goods. Although the order did not specify which products would be targeted, it is believed that imported liquor could be on the list.
Reuters had earlier reported in June that Pernod and Diageo had briefly stopped receiving orders for their imported brands from such government stores. Although that could be part of the challenge due to the pandemic and SOPs at that time.
The defence canteens of India sell liquor, electronics and other goods at discounted prices to soldiers, ex-servicemen and their families. The annual estimated sales of this canteen/shops is over $2 billion making it one the largest retail chains in India. Although liquor makes a small portion of these sales, according to Defence Studies and Analyses (IDSA) imports make up around 6-7% of total sales value in the defence shops for all consumer products.