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ISWAI Takes Maharashtra to Court Over Policy Discrimination and Tax Hike

The tax rate for MML is 270 per cent with zero foreign investment/ownership, while IMFL and other premium brands ranges from 300% to 450%
Sales of impacted brands have fallen by 35-40% since the hike in excise duty
Beer hit harder with ₹20–30 jump in per-bottle MRP

The International Spirits and Wines Association of India (ISWAI) has filed a lawsuit in the Bombay High Court against the Maharashtra government, challenging a sharp hike in excise duty on premium affordable liquor brands and also for exclusion of brands of major players such as Diageo India and Pernod Ricard India from a newly-created lower tax category – Maharashtra Made Liquor (MML).

The petition was filed on November 14 and the court is slated to hear the matter on December 9.

In mid 2025, the Maharashtra government introduced policy changes to incentivise local investment. It brought in the MML category, to include grain-based spirits produced exclusively by local manufacturers. The tax rate for MML is 270 per cent with zero foreign investment/ownership. The government believes that this will spur the local industry.

Parallelly, the government increased taxes on premium brands with production costs below ₹260 per litre from 300% to 450% and this is a big pain point. Several brands have been hit by this hike and they include Diageo’s McDowell’s No.1 and Pernod Ricard’s Royal Stag, among others. In the lawsuit, ISWAI mentions that the state sought to grant an artificial competitive advantage to the preferred class.

Not just brands from international companies are affected. Indian companies such as Allied Blenders and Tilaknagar Industries are also impacted. According to the Confederation of Indian Alcoholic Beverage Companies (CIABC), the affordable segment affected by the tax hike contributes 70% of Maharashtra’s premium spirit sales. It is estimated that sales of impacted brands have fallen by 35-40% since the hike in excise duty.

Maharashtra’s liquor market, one of India’s largest and most premium-heavy, is now navigating its sharpest disruption in recent years. The excise changes have triggered a noticeable drop in demand and widened price gaps with neighbouring states. The State government, however, is insisting that the policy changes will fetch in more revenue, encourage local industry and create new jobs.

As the liquor industry is a soft target, the government recently increased excise duties across IMFL, beer, and imported spirits. IMFL duties were increased by 15–20%, depending on category; beer saw a cumulative tax load rise of roughly 10–15%, when the revised excise plus additional fees are considered. For premium and imported spirits, the new slab pushed shelf prices far above national averages.

A bottle of mid-range whisky that retailed for ₹1,000 now sits closer to ₹1,150–1,250. Premium blends that previously hovered around ₹1,800–2,200 now breach the ₹2,500 mark in several cities. Imported labels have crossed psychological price barriers: a Scotch priced at ₹4,500 in 2023 is said to be retailing between ₹5,300–5,800.

Industry insiders say the difference in excise per case between the lower slab and next-higher slab can be as high as ₹90–₹140 per bottle equivalent, affecting retail pricing significantly. Smaller regional players, which operate with lower production costs, find it easier to qualify for the lower slab, allowing wider price gaps and competitive advantages.

The state’s argument is that Maharashtra, with its large consumption base and heavy urban footprint, can absorb a higher tax load. Industry counters that the elasticity of demand has been underestimated.

The impact has been immediate. Industry bodies estimate a 12–18% dip in overall IMFL sales in the first 4–5 months post-hike, with several premium categories reporting declines of 20–25%. Beer volumes fell faster because of price sensitivity ranging between 15–20% down, year-on-year during peak season.

Mumbai and Pune, which typically account for nearly 45% of premium spirits demand, has seen the sharpest contraction. Retailers in Mumbai reported that walk-ins dropped by 10–12%, but average bill values dropped even more as consumers down-traded to cheaper brands. Bars and restaurants also saw margins compress as selling prices increased while consumption slowed.

According to reports, neighbouring states are gaining. It is reported that Goa saw double-digit pickup in cross-border purchases. Karnataka’s border districts, especially Belgaum and Bidar, reported higher out-of-state footfall. Consumers with weekend travel habits shifted buying patterns, eroding Maharashtra’s taxable volumes.

Despite the volume decline, reports suggest that the state’s monthly excise collections grew by 6–8%, owing to the steeply increased tax per bottle. But industry believes this is short-term. If current trends continue, the full-year volume contraction could touch 12–15%, dragging down long-term revenue and pushing consumers toward parallel informal channels.

Retailers say the tax-led price jump has altered buying patterns with customers replacing a ₹2,000 whisky with a ₹1,200–1,300 option. Mumbai’s suburban retailers estimate that premium SKUs now contribute only 25–30% of sales, down from 35–40% last year.

Excise Revenues Up till March 2025

Maharashtra’s excise revenue rose to a new high of Rs 23,250 crore in 2023-24, 8% higher than the previous year. From April to March 2024-25, the revenues were Rs. 25,467.96 crore. It remains to be seen what the impact has been post March.

Maharashtra has one of the highest liquor taxes in India, competing only with Kerala and Tamil Nadu at the upper end of the spectrum. The consumption slowdown has also hurt hospitality venues which have reported lower beverage sales and shrinking margins, while distributors face cash-flow strain.

Even within large companies, strategy is shifting. Value whisky and rum brands are being pushed aggressively. New formats such as 90 ml, 180 ml, and smaller packs are showing stronger traction than 750 ml bottles. Premium Scotch and single malts, typically strong performers in cities like Mumbai, are said to be registering a 15–20% reorder slowdown from retailers.

Similarly, bars are said to be rewriting menus. Many have replaced several mid-tier imported labels with Indian premium whiskies or craft spirits. Cocktail bars that rely on imported bases have reported cost increase in the range of 18–25% per drink.

Beer, traditionally the most affected by price hikes, is hit even harder. The ₹20–30 jump in per-bottle MRP has nudged consumers toward home-grown mild beers, downtrading sharply from premium lagers and craft options.

Experts suggest rationalising slabs (bringing down the gap between economy and mid-tier segments); price stability; and increased border controls to reduce leakage to Goa and Karnataka.

Industry hopes that the state government will revisit the tax structure ahead of FY2026 budgeting, especially if volume declines continue. The legal battle could also force a relook at category classification criteria.

The liquor ecosystem in Maharashtra is too large, too important, and too revenue-rich to remain in a prolonged slump. But the current year is that of a market adjusting to a steep tax shock and recalibrating demand, supply, and legal frameworks.

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MML, Will it Upset the Apple Cart?

The new category, Maharashtra Made Liquor (MML), has already stirred the hornet’s nest. With MML getting preferential treatment in excise duty (270%), compared to 450% for IMFL and also MML remaining the exclusive domain of local producers, the larger alcobev sector (including domestic and international players) is up arms and has approached the courts for remedy.

At the time of MML announcement, government officials projected an incremental revenue target of ₹3,000 crore, on top of the existing ₹25,000 crore excise intake. However, industry insiders remain cautious about whether these numbers are achievable, citing consumer behaviour, market fragmentation, and distribution challenges. The industry has already reported slump in sales of some brands.

Maharashtra’s IMFL market currently stands at around 30 lakh cases per month. The proponents of MML say that once all MML producers become operational, the new segment could account for 8–10 lakh cases monthly, effectively redistributing a share of the existing market rather than creating an entirely new one.

As per reports, six licences have been already given and they are in the process of setting up production, while another 18 are at various stages of approval, either with the Ministry or in the excise department.

Under the new guidelines, MML manufacturers must have their registered head office in Maharashtra; maintain at least 25% state-resident shareholding; avoid producing or marketing MML outside the state; and register their brands within one year. Third-party production is not allowed, though leasing of plant capacity is permitted if the facility remains dedicated to MML production. If sold outside Maharashtra or if rules are violated, the MML status will be revoked, the guidelines state.

Economic Impact

At an assumed manufacturing cost of ₹400 per litre, IMFL retails at roughly ₹2,200 (including ₹1,800 in excise), while MML is expected to cost around ₹1,480 (with ₹1,080 excise), making it about ₹700 cheaper per litre. The government has set a minimum retail price of ₹148 for a 180 ml bottle of MML, compared to ₹205 for IMFL and ₹80 for country liquor. The MML category is positioned as a bridge offering, designed to be more affordable than top-tier IMFL yet higher in quality than country liquor.

According to reports, Maharashtra currently has 48 licensed IMFL manufacturing units, but only 10 dominate production; many operate at minimal capacity just to retain their licences. The government hopes MML will revive idle plants and generate up to ₹3,000 crore in additional annual revenue. The move is part of wider excise reforms targeting ₹14,000 crore yearly collections through measures including AI-powered monitoring of production and sales; new divisional excise offices; revised duty structures, IMFL at 3× to 4.5× manufacturing cost (capped at ₹260/litre), country liquor up to ₹205 per proof litre; and higher licence fees for FL-2 (retail) and FL-3 (bars) outlets.

The belief is that the affordability factor will drive this category. The entire industry is undergoing realignment and the next six to eight months, sales and consumer preferences will determine the fate of brands. Before that, there is the expected Court decision which will set the tone for the industry.

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Diageo India Delivers Tangible ESG Gains in FY25

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Diageo India recently released its fourth annual ESG Reporting Index, spotlighting advancements on its ‘Spirit of Progress’ ESG action plan. The Reporting Index outlines the company’s impact across three pillars of its Spirit of Progress framework: pioneering grain to glass sustainability, championing inclusion and diversity, and promoting positive drinking, all anchored in doing business the right way.

Developed in line with the globally recognised GRI Standards, the Index also maps Diageo India’s performance against the UN Sustainable Development Goals (UN SDGs) and provides additional sector-specific disclosures under the Sustainability Accounting Standards Board (SASB) framework.

Jitendra Mahajan, Chief Supply and Sustainability Officer, Diageo India, said, “Our Spirit of Progress ESG agenda reflects the business we are deliberately building—one that grows responsibly, leads with integrity, and creates long-term value. From strengthening water security and accelerating our transition to renewable energy, to advancing inclusion and promoting responsible consumption, our actions demonstrate that a focus on ESG powers performance. As we deepen this momentum, we remain committed to working with partners to build resilient communities, protect natural resources, and shape a more sustainable future for India.”

Under its grain-to-glass sustainability pillar, Diageo India reported major gains in water efficiency, replenishment and collective action, improving water-use efficiency by 54% in distillation and 35% in packaging since 2020 while replenishing 182,000 cubic metres of water in FY25 (cumulative 1.1 million cubic metres) across Maharashtra, Uttar Pradesh, Rajasthan and Meghalaya, continuing to expand WASH interventions and maintaining AWS certification for its Alwar unit, while also co-founding The Godavari Initiative to restore aquifers and build watershed resilience in the Godavari basin.

On carbon and energy, the company has cut GHG emissions by 93% since 2020 by moving all distilleries to biomass-powered boilers and now sources 99% of its energy from renewables including 2.7 MW of in-house solar, achieving zero waste to landfill, reaching 99% recyclable packaging, and integrating 33% r-PET into its PET bottle portfolio, alongside community-led carbon projects including 31,500 mangrove seedlings in Odisha, 1 lakh trees for residual offsetting, and 2 lakh trees planted under Rajasthan’s TOFR programme, while regenerative agriculture efforts have trained 430 farmers—80% smallholders—across 2,000+ acres.

Advancing inclusion and diversity, Diageo India reported women’s representation at 28% of the executive workforce, 30% of the leadership team and 50% of the Executive Committee, supported by active ERGs such as the Spirited Women’s Network and Rainbow Network, while Project Saksham enabled the hiring and upskilling of 43 Persons with Disabilities and Learning for Life trained 1,922 individuals—including 1,282 women and 303 PwDs—bringing women’s participation across Diageo skilling programmes to 67%, and the Diageo Bar Academy trained over 9,400 bartenders and bar owners, as the company continued to strengthen inclusive workplaces recognised by a Gold Employer ranking at IWEI 2024 and a 16th position in Equileap’s Emerging Markets Gender Equality Report 2024.

Diageo India’s responsible drinking initiatives continued to scale nationwide, with Act Smart India reaching 200,000 youth in FY25 (cumulative 500,000), the Wrong Side of the Road anti-drink driving platform implemented across 79 RTOs in 10 states engaging 500,000 consumers in FY25 (total reach 1.2 million since 2021), and the DRINKiQ platform reinforcing moderation and awareness around alcohol-related harm.

Strengthening governance remained foundational to Diageo India’s ESG agenda with a diverse Board led by an Independent Chairperson, all key committees chaired by Independent Directors, and ESG oversight embedded through cross-functional teams reporting quarterly to the Executive Committee, reinforcing the company’s commitment to doing business the right way and driving sustained ESG leadership in India’s alcobev sector.

Sir Dave Lewis appointed Diageo plc CEO

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Diageo plc has appointed Sir Dave Lewis to the role of Chief Executive Officer and Executive Director, effective on 1 January 2026.

Nik Jhangiani will continue as Interim CEO until the end of December 2025 and then resume his CFO role thereafter. Deirdre Mahlan, having returned to Diageo as Interim CFO, will continue to support Diageo through the transition.

Dave is a proven CEO with extensive marketing and brand building experience. He has an outstanding track record leading global consumer businesses, growing world-class brands, and providing operational and financial rigour. Dave served as Group CEO of Tesco plc from 2014 to 2020, where he transformed the business and, prior to this, spent nearly three decades at Unilever, latterly in Executive Committee roles, leading on both marketing and business performance. Additionally, Dave has been the Chair of Haleon, a global leader in consumer healthcare, since its creation in 2022 and is a non-executive board director of PepsiCo Inc. Dave will be stepping down from the Haleon role on 31 December 2025.

Sir John Manzoni, Diageo’s Chair, who led the succession process on behalf of the board, said, “We are delighted to welcome Dave as Diageo’s new CEO. Having conducted an extensive and thorough global search, the Board unanimously felt that Dave has both the extensive CEO experience, and the proven leadership skills in building and marketing world-leading brands, that is right for Diageo at this time.”

Manzoni continued, “We are confident that Dave will work with the team to take Diageo into its next successful chapter in the evolving consumer environment. The Board wishes to recognise and thank Nik Jhangiani for his excellent leadership as Interim CEO and for continuing to drive forward Diageo’s sharpened strategy.”

Sir Dave Lewis, Chief Executive Officer, said, “Diageo is a world leading business with a portfolio of very strong brands, and I am delighted to be joining the team. The market faces some headwinds but there are also significant opportunities. I look forward to working with the team to face these challenges and realise some of the opportunities in a way which creates shareholder value.”

Dave is also a Trustee for The Royal Foundation and the Chair of the World Wildlife Fund in the UK. In recognition of his contribution to business and the food industry in the United Kingdom, Dave was knighted by Her Majesty Queen Elizabeth II in the 2021 New Year’s Honours List.

Diageo Launches ‘The Mangroves Regeneration Pledge’ Featuring Ayushmann Khurrana

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On the occasion of the 10th anniversary of World Mangrove Day, celebrated on July 6, 2025, Diageo India’s Signature Packaged Drinking Water unveiled a compelling new campaign titled “The Mangroves Regeneration Pledge”. Featuring brand ambassador Ayushmann Khurrana, the campaign underscores the urgent need to protect and restore India’s fragile mangrove ecosystems.

At the heart of the initiative is a short film that pays tribute to the resilience of India’s coastal communities and the silent strength of mangroves in battling climate change. Through immersive visuals and Ayushmann’s evocative narration, the film captures the on-ground challenges of conservation, highlighting the role of grassroots action in environmental stewardship.

The film draws attention to Signature’s flagship Mangrove Regeneration Project in Odisha—a three-year, community-led initiative that aims to restore over 62 acres of degraded coastal land. The project involves planting more than 30,000 mangrove saplings and empowering five coastal villages to engage in long-term conservation efforts.

Varun Koorichh, Vice President and Portfolio Head – Marketing, Diageo India, said, “The Mangrove Regeneration Project in Odisha is a powerful expression of what we stand for–community-driven action, sustained commitment, and meaningful environmental progress. With our proposition ‘One With Nature’, we honour the quiet resilience of ecosystems like mangroves and the communities that protect them. This initiative, like our engagement at the Ziro Festival of Music, reinforces our belief in conscious living and environmental responsibility.”

Ayushmann Khurrana, actor and brand ambassador, added, “What drew me to this campaign was its deep connection with real-world impact. This isn’t just a film—it’s a tribute. Mangroves are unsung heroes, silently protecting coastlines, restoring biodiversity, and fighting climate change. Signature Packaged Drinking Water’s approach goes beyond raising awareness—it drives meaningful action. I hope this campaign inspires many to take the pledge and join us in nurturing nature.” Mangroves are among the most efficient carbon sinks on the planet, capable of absorbing up to four times more carbon dioxide than rainforests. Their preservation is critical to climate resilience, biodiversity, and the livelihoods of coastal communities

Diageo India acquires Nao Spirits

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Diageo India has acquired Nao Spirits & Beverages, India’s craft gin makers (Greater Than and Hapusa brands), valued at Rs. 130 crores.

Diageo India (United Spirits Limited) has increased its equity stake in Nao Spirits from 30% to approximately 97.07%, making it a subsidiary of the company. With a final tranche pending, Diageo India is set to hold 100% ownership, bringing one of India’s most influential craft spirits startups fully into its fold. The transaction includes a secondary share purchase of ₹53.79 crore and a further infusion of ₹56 crore in growth capital — a strong commitment to scaling what began as a bootstrapped dream of India’s first homegrown gin.

Founded in 2017 by Anand Virmani, Aparajita Ninan and Vaibhav Singh; and later joined by Abhinav Rajput, Nao Spirits created India’s first craft gin from the ground up. From a small distillery in Goa, they distilled more than just spirits – they distilled the movement that would later be celebrated as ‘Indian Craft Spirits’. ‘Nao’, derived from the word ‘boat’ in Portuguese is a nod to Goa’s history as a trading port and a play on the English word ‘now’, capturing the spirit of a confident, modern India.

With Greater Than (2017), they introduced India to its first homegrown London Dry gin made with botanicals from around the world. With Hapusa (2018), they broke new ground with the world’s first Himalayan Dry Gin, bottling the wild spirit of the mountains with a premium, sipping gin. While Greater Than built the foundation, Hapusa gave gin a voice rooted in local flavour. Together, these helped build India’s craft gin category from scratch.

Imaginative Limited Editions

Nao Spirits launched a series of imaginative limited editions—each one crafted to stand apart, both in flavour and in form: Juniper Bomb (2020) – born from an accidental extended botanical soak that led to thrice the juniper flavour; No Sleep (2021) — India’s first coffee-infused gin; Broken Bat (2022) — the world’s first gin, aged using Kashmir Willow cricket bats; and Punk Gin (2023) – India’s first naturally infused pink gin made with real Mahabaleshwar strawberries, born from a place of rebellion.

These never-before-seen limited editions broke convention and captured attention, each bottle a celebration of India’s biodiversity, ingenuity and evolving palate.

“We started with a copper still named Agotha and a dream to make India proud. Today, we’re humbled and energised with Diageo India stepping in as a full partner and investor. Along the way, we realised that gin isn’t just about what goes into the bottle — it’s about the culture you build around it. From day one, we’ve been deeply focused on nurturing a community of bartenders, servers, and craft champions who could carry the story of Indian spirits forward in ways we never imagined. We’re proud that many of the original hands and hearts that built Nao Spirits are still with us today, and this next chapter gives us a chance to grow the culture we’ve helped shape with even greater reach and purpose. This isn’t the end of a journey, but the beginning of a new chapter; powered by the same people, the same purpose, and the same belief — that modern Indian spirits deserve their place on the world stage,” said Anand Virmani, Co-Founder & CEO, Nao Spirits & Beverages.

The original team continues to lead Nao Spirits with the same creative direction and cultural clarity that have defined its journey from the start — now supported by Diageo India’s robust distribution network, production capabilities, and leadership strength.

From Bar Counter to Global Stage

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Great drinks aren’t made by accident. They take skill, patience, and someone who knows exactly what they’re doing. Akhilesh Sheoran is one of those people. Whether it’s crafting a cocktail that wins championships or introducing whisky lovers to some of the finest spirits, he knows his way around a bar… and a bottle.

His journey started behind the counter, shaking and stirring his way through some of the toughest global competitions. Now, as Brand Ambassador – Craft Spirits at Diageo India, he’s the face behind some of the most talked-about labels, including Godawan Single Malt, crowned the Best Single Malt in the World (2024), and United’s Epitome Reserve.

In this chat, he spills stories from his career, shares tips on spotting a great bottle, and even talks about disastrous food pairings. Whether you’re a whisky enthusiast or someone who just wants to sound smarter at the bar, there’s plenty to take away from this conversation.

From mixology to brand ambassadorship, your journey has been remarkable. What inspired you to enter the world of craft spirits, and how has your path evolved over the years?

Working with different styles of spirits and engaging with consumers, I realised there’s so much that goes into bringing these incredible spirits to the bar. This curiosity led me to explore the other side of the industry as a Brand Ambassador, a dynamic and challenging role that allows me to bridge the gap between brands and consumers.

Which of your victories holds the most significance for you and why?

All competitions hold their own importance, as any win comes with new insights and a responsibility to push the boundaries further. However, Diageo World Class India stands out as one of the most demanding and rewarding experiences. Its rigorous structure truly tests creativity, technical skill, and adaptability, making it an unforgettable milestone.

The alco-bev space is constantly evolving. What are some of the biggest changes you’ve seen in the industry over the last decade, especially in India?

India’s drinking culture is evolving, driven by a younger, growing middle class that’s showing a stronger preference for premium homegrown brands. More people are exploring craft spirits and beers, and embracing new flavours and experiences. This move highlights a greater appreciation for quality, creativity, and the narratives behind bottles, shaping a more sophisticated and adventurous approach to what we drink.

What makes a spirit truly “craft,” and how do you see India’s role in this global movement?

Craft spirits are defined by their small-batch production, emphasis on high-quality ingredients, and hands-on distillation techniques that prioritise authenticity over mass production. Craft producers often experiment with distinctive botanicals, innovative ageing techniques, and transparent but unique production methods. More than just a process, craft spirits are about the people, leaders who challenge conventional rules. India’s role in the global craft movement is growing rapidly, with a surge in homegrown distilleries that merge heritage with modern innovation.

With whisky gaining a younger audience in India, how do you see the preferences of Indian consumers evolving when it comes to single malts and premium spirits?

Over the past decade, Indian consumers, especially younger consumers have developed a refined taste for single malts and premium spirits. This shift is driven by rising affluence, global exposure, and a desire for more authentic, high-quality drinking experiences. What’s even more exciting is the growing appreciation for domestically produced single malts, which are now competing on the world stage, reflecting a sense of national pride and recognition of India’s craftsmanship.

What’s the best way to appreciate and savour a good single malt?

The best way is to explore different styles from various regions and find what suits your palate. However, the right technique makes all the difference.

Use a Glencairn or tulip-shaped glass to concentrate aromas.

Observe the whisky’s colour.

Nose the whisky gently, keeping your mouth slightly open to catch nuanced aromas like vanilla, spice, fruit, or smoke.

Take a small sip and let it coat your tongue, identifying layers of flavour; sweetness, spice, peat.

The finish, or how long the flavours linger, tells you a lot about its depth and complexity.

Adding a few drops of water can open up hidden notes, making the whisky more approachable.

Ultimately, whisky should be enjoyed slowly, in a relaxed setting, where each sip reveals something new.

There’s a growing curiosity about how to identify a high-quality whisky. What are the key characteristics one should look for while selecting a bottle?

For me, specifics matter; from the packaging to the liquid inside.

But key factors to consider include: cask type and ageing process (although older doesn’t always mean better), alcohol by volume (ABV), and distillery and production methods. Look for anything that talks about tasting notes and flavour profile, brand philosophy and heritage behind the whisky. A well-crafted whisky tells a story before you even take the first sip.

Diageo India appoints Praveen Someshwar as CEO-Designate, Hina Nagarajan to Global Executive position

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United Spirits Limited (“Diageo India”) on January 13 announced the appointment of Praveen Someshwar as CEO-Designate. Hina Nagarajan, current Managing Director and CEO of Diageo India, will transition into another position on Diageo’s Global Executive Committee after four very successful years.

Praveen will join the company on 1 March 2025 as CEO-Designate. In accordance with the applicable law and upon receipt of the necessary approvals, Praveen will take over from Hina Nagarajan as Managing Director and CEO of Diageo India and join the Diageo Executive Committee, effective 1 April 2025.

For the last five years, Praveen has been MD and CEO of HT Media, one of India’s largest and best-known media groups, where he leads multiple digital, print and radio outlets including India’s second largest newspaper, Hindustan Times, the leading financial news outlet Mint, and several radio outlets.

Diageo Chief Executive Debra Crew said “Under Hina’s leadership, Diageo India has combined strong top-line growth and margin expansion with impactful strategic initiatives, reshaping and premiumising our portfolio and positioning Diageo India as an innovative leader in the AlcoBev industry. As she moves on to a new role within Diageo, she leaves a significant track record of success and a highly engaged, talented and diverse team.

“Praveen joins us with an outstanding track record of leading consumer businesses, with a passion for both strategy and executional excellence that will serve us well as we plan for the next phase of Diageo India’s exciting growth story. I can’t wait to welcome him on board.”

Mahendra Kumar Sharma, Chairman of the USL board, said “On behalf of the USL Board, we wish to extend our sincere thanks to Hina for her strong stewardship of the business and her partnership with the Board. Together with the team in India, she has led a bold ambition for growth that has driven market share gains across multiple categories, and she leaves the business with a clear strategy and growth momentum. The Board and I also wish to welcome Praveen, who we look forward to working with and offering our full support as he transitions into this important leadership position.”

Hina Nagarajan said “It has been a true privilege to lead Diageo India during a period of strong strategic progress and sustained, profitable double-digit growth for the business, with our market capitalisation growing to more than INR 1 trillion (~US$ 12.5 Bn). I wish all my Diageo India colleagues ongoing success and look forward to supporting them as they continue their work in building this fantastic business under Praveen’s leadership.”

Praveen Someshwar said “I am delighted to be joining Diageo – a business with world-leading brands, talented colleagues, and a long-term commitment to developing its business sustainably in India. I look forward to working with my new colleagues to build on their great work.”

Diageo India and SCPwD Join Forces to Educate Disabled Students Through ‘Learning for Life’ Program

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In a recent collaboration aimed at enhancing the employability of persons with disabilities (PwDs), the Skill Council for Persons with Disability (SCPwD) has partnered with Diageo India to provide vocational training to 300 students. This initiative falls under Diageo India’s “Learning for Life” program, aiming to address the skill gaps in the Business and Hospitality sectors.

The training, focusing on Food and Beverage Services, will be conducted in various SCPwD-affiliated centres across India. Certified trainers and assessors will oversee the residential programs, offering students a curriculum tailored to their needs. This partnership signifies a step towards inclusivity and diversity in the workforce, aligning with Diageo’s broader societal goals for 2030. The announcement was made in a ceremony attended by representatives from the National Association for the Blind (NAB) Karnataka, along with other industry stakeholders.

Hina Nagarajan, MD & CEO, Diageo India said, “Driven by the common objective of creating a vibrant and diverse workforce, we are delighted to expand our partnership with the Skill Council for Persons with Disability. Last year, we began this initiative by extending the scope of our ‘Learning for Life’ programme, to include the PwD community to help them overcome employment barriers. We strengthen our commitment this year to promote sustainable growth by scaling up this programme to provide equal access to the right resources, skills, and employment opportunities across India.”

Ravindra Singh, CEO, Skill Council for Persons with Disability (SCPwD) said, “We are delighted to partner with Diageo India whose commitment to inclusion and diversity is exemplary. Last year, we trained 100 Persons with Disabilities as part of Diageo India’s ‘Learning for Life’ programme. The success of this programme encourages us to expand this specially curated programme which focuses on providing hands-on training in hospitality skills and enhance employment opportunities.”

The initiative reflects a growing recognition of the need for accessible education and training programs that equip PwDs with the skills necessary to enter and succeed in the workforce, thereby promoting sustainable growth and diversity.

‘Drink better, not More’ is our Vision – Hina Nagarajan, MD & CEO, Diageo India

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Taking over the reins of one of the biggest companies in the market, can never be an easy task, especially when the daunting objective is to ensure double-digit growth, drive revenue and increase profits. Add to that, the first woman to lead the business, but Hina Nagarajan, Managing Director and CEO, Diageo India has not only successfully achieved this, but also surpassed many other feats. She speaks to Bhavya Desai about her journey, future objectives and more. Excerpts:

Since you took over, you’ve made incredible strides towards ensuring that the company becomes net debt free. How have you managed that?

The task ahead of me when I took charge in 2021 was to bring our Diageo India business on a sustained double-digit growth path, especially driving revenue and profitable share in the premium and prestige segments of the Indian alcohol market. Together with my leadership team, we made some strategic choices to win in this decade and beyond.

I led the execution of our portfolio reshape with the objective of accelerating premiumisation-led growth while delivering our guidance of mid to high teens margin. We completed the strategic review of our Popular brand portfolio, resulting in the sale of 32 mass brands and franchising of 11 brands in September 2022.

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Box Item:

Our overall business growth has tripled in the period from 2021-23 vs. 2016-21.
Our premium portfolio growth rates have doubled over the same period, P&A is 86% of our portfolio now
Our brands are performing competitively in their respective segments 2-3 years in a row,
And we have doubled the Market Capitalisation of USL since 2021.

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Our commitment to premiumisation is evident in our investments over the past years. We’ve introduced new products and innovations such as Royal Challenge American Pride, Epitome Reserve’s second limited edition of Peated Indian Single Malt in Goa, and Godawan, a unique single malt from Rajasthan. Additionally, our minority stake in Nao Spirits, the makers of Hapusa and Greater Than, underscores our strategy to grow in the luxury and premium segments, particularly in scotch, where we lead the market.

We also redefined our offerings in the Upper Prestige segment with unique products that resonate with new consumer trends. Furthermore, our efforts to premiumise and reposition brands in the Lower & Mid Prestige segments, such as McDowell’s No.1 Whisky and Royal Challenge Whisky, are part of our strategy to respond to evolving consumer needs.

With the consumer at the heart of our business, the strength of our reshaped portfolio, and the investments we are making to accelerate our strategic priorities, we have been able to deliver our mission of profitable double-digit growth for our business and in the process, wiped out our cumulative losses and declared dividend for the first time since acquisition a decade ago.

Having set on this path, what is Diageo’s next objective – in the coming years?

We feel extremely positive and excited about the future of the alcobev industry in India. The biggest transformation that we see is a whole new generation entering adulthood driven by a different, positive, and progressive set of values. India is in the middle of deep societal change led by women, youth and boom towns. This along with a massive growing need to ‘drink better, not more’ across all segments, is in line with our vision for the category.

The premiumisation trend will continue to stay strong with rising affluence. By 2030, 45% of Indian households (approx. 175 million households) will be in the upper mid and high-income groups. We see a big opportunity, not only to leverage this trend through our incredible portfolio of global and IMFL brands, but also to position Indian whisky as a characterful, distinct, high-quality offering by bringing the best of people, processes, and ingredients together to create bespoke liquids that are ‘Made in India’ for the world.

Our mission is to be a top CPG (Consumer Packaged Goods) company in India delivering sustained double digit topline growth with mid to high teen margins and long-term value to all our stakeholders. With this new strategy, we aim to deliver our Mission through 3 pillars that form the essence of our mission:

Reshaping our portfolio with a focus on accelerating premiumisation-led growth, while delivering our guidance of mid to high teens margins.
Creating an Organisation of the Future – We are building a future-ready organisation by investing in our talent, introducing market-leading policies and driving digital capabilities.
Defining and executing an ambitious role for Diageo in Society 2030 focusing on promoting responsible consumption, championing inclusion & diversity, and pioneering grain-to-glass sustainability which includes preserving water for life, accelerating to a low-carbon world and lastly, becoming sustainable by nature.

Keeping our customers as our main focus, along with the reshaped portfolio of our products and the investments we’re making to accelatate our strategic goals forward, we are confident of growing our business in a steady and sustainable way.

How has the consumer landscape changed over the years in the industry?

India is in the middle of deep societal change led by rising affluence, women, youth and boom towns. The biggest transformation that we see is a whole new generation entering adulthood driven by a different, positive, and progressive set of values. This trend expands to middle India and boom towns which are undergoing a remarkable transformation, fuelled by high aspirations and digital revolution where consumers are looking for premium brands, products, and experiences. The new consumer cohorts are driven by values of authenticity, individuality, local pride and collaboration with women building a more inclusive consumption narrative.

Digital has also been a big game changer. Most consumer journeys begin on digital with discovery, information, inspiration – informing them of their choices and behaviour and most of all aspiration and desire for what they want. If we look at the alcobev category, consumers are choosing different products for different occasions and need.

This means that repertoires are expanding from whisky to gin, vodka, rum, aperitifs, cocktails, etc. Consumers today choose to drink better, not more, leading to premiumisation of the alcobev category. At Diageo , we are responding to these structural shifts in consumer choices and behaviour, pivoted around premiumisation, wellbeing and sustainability. This new, changing, and vibrant India presents a huge opportunity for us.

You are the first woman to lead the business at the company. How do you think this encourages and inspires others across industries?

My appointment sparked interest and garnered positive attention, which reflects the breaking of traditional barriers especially in the alcohol beverage sector. As a woman CEO in alcobev, traditionally a male dominated industry, I see this as an opportunity to change the paradigm of this industry to make it more inclusive and normalise the narrative.

Our efforts are making a difference, leading to an environment where joining our sector feels no different from any other industry for women. At Diageo India, our commitment lies in building a workplace where everyone feels included. 50% of our Executive Committee and 35% of our senior leadership team comprises of women. We believe that a diverse leadership helps create a more balanced and well represented workforce. We’re making this happen by welcoming women into various leadership positions, ensuring we drive change right from the top.

Seeing more women in our company is truly encouraging. Their presence brings fresh ideas and perspectives on how we approach our products, market them, and innovate. This enriches our connection with customers and broadens our talent base, helping us to stand out and succeed in a competitive market. And hopefully, this encourages and inspires others to do more.

With sustainability being a rising factor amongst consumers today, how is Diageo moving towards a more sustainable tomorrow?

We at Diageo strongly believe that social and environmental impact and profitability are not two separate goals but rather interlinked. As one of the world’s largest beverage alcohol producers, we believe that we are ambassadors of our industry and aim to be the best we can – at work, at home, with friends, and in the communities we serve.

Sustainability is at the heart of our business strategy and is outlined in our Society 2030: Spirit of Progress ESG action plan. Our Society 2030 agenda is focussed on pioneering grain-to-glass sustainability, championing inclusion and diversity, and promoting responsible consumption.

Pioneering grain-to-glass sustainability plays a pivotal role in our Society 2030 goals and is embedded throughout the process and focusses on three key aspects; preserving water, lowering carbon emissions, and becoming sustainable by design.

In terms of preserving water we have overachieved our water replenishment target by 25% and three years ahead of our 2026 goals. We have improved our water use efficiency by 44% in our distilleries and 30% in our packaging processes, against the 2030 goal of 40%.

Women and girls are disproportionately affected when communities don’t have access to clean Water, Sanitation and Hygiene (WASH) facilities. We’re investing in such projects to empower women by providing sustainable water access and rebalancing their societal roles in more than 30 villages.

At the state level, we have partnered with Forest Department in Rajasthan and Maharashtra for mass plantation projects to improve green cover, protect soil, improve percolation and support biodiversity. In Alwar we have initiated efforts for desilting ponds, constructing check dams, improving drainage systems, to name a few. Measures like maintaining Zero Liquid Discharge status, rainwater harvesting pits, and others were adopted. We have also launched an afforestation drive to plant 2 lakh trees to offset residual greenhouse gas emissions.

We are making good progress in reducing our carbon emissions, and have committed to becoming Net Zero by F26 in our direct operations by mitigating our Scope 1 & 2 emissions and reduce 50% of our Scope 3 emissions by 2030. Our sustained efforts have resulted in industry-recognitions by Sustainalytics recognising the company as a “Top-Rated ESG Performer for 2022 and 2023” and our Alwar unit in Rajasthan,

has achieved the Alliance for Water Stewardship (AWS) certification, making it the first distillery in Asia to attain this certification.

In our efforts to becoming sustainable by design, we have removed mono cartons from 90% of our portfolio. In addition, we have introduced biodegradable packs as well as recyclable PETs in some of our brands and continue to expand it to others. This is aligned to our global mission to ensure 100% of our packaging is widely recyclable or reusable/compostable by 2030. Over 99% of materials used are recyclable. On glass, we have initiated light weighting of our bottles.

Our brands like ‘Signature by Nature’ uses 40% recycled glass for the glass bottle and is associated with Mangrove Plantation in Puri, Orissa where 30,000 Mangroves seedlings are being planted in five villages. These mangroves can sequester carbon up to 2-4 times faster than a mature tropical forest.

Our ESG agenda is owned by senior leadership levels including the board, which monitors the same through a CSR and ESG Committee. The ESG Index report we release annually highlights our progress mapped against each of the three pillars and we have witnessed remarkable achievements.

Our ambition is to be the forerunner in the Indian Consumer Product Goods (CPG) industry on ESG and create enterprise value.

What is Diageo’s roadmap for India with most companies betting big on the Indian markets? What is the next big product category that Diageo is focussing on for the coming years?

Diageo India is responding to structural shifts in consumer choices and behaviour, pivoted around growing affluence, premiumisation across categories, and quest for experiential and experimentation, through its refreshed business strategy focussed on premiumisation and focus on transformational innovation and renovation. We have a future back approach to our innovation pipeline and use a proprietory framework called Foresight to determine where trends will go few years from now.

It is for this reason that we have launched Royal Challenge American Pride which caters to the growing consumer preference for bourbon, renovated Signature to be the most sustainable brand in its segment , developed the Naya Sher campaign encouraging youth to take bold , confident steps forward for our Royal Challenge packaged drinking water as well as launched Walkers & Co – a platform to celebrate bold boundary pushers. We launched Don Julio tequila in the country in response to the growing traction for Tequila consumption in the country. We are also scaling up Baileys given the affinity for desserts in India.

We will continue to use Foresight to guide us on innovations for the future and bring the best of both our global, as well as Made in India portfolio, to cater to the evolving needs of Indian consumers.

While your association ISWAI has been representing centre and states for rationalisation of taxes including GST/Excise etc., do you expect centre to bring reform in the alcobev sector? How do you think this move will be beneficial?

ISWAI has been in talks with State Governments to rationalise high excise duties. It has made representations to the authorities time and again as manufacturers of alcohol beverages (Alco-Bev) continue to face shrinking margins due to high taxes, along with soaring inflation and import tariffs. The biggest barrier faced by the industry is freedom to price its brands. ISWAI continues to advocate for pricing freedom, especially for premium brands, as this will help the industry to overcome inflationary pressures. There are also several other regulatory and operational barriers which hamper ease of doing business for the industry. We have seen positive steps from the government on resolving some of these issues. ISWAI will continue to work proactively with various government bodies on these matters and is hopeful that the state governments will consider a harmonised tax structure as well as an acceptable annual pricing mechanism for the sector and continue to support ease of doing business for our industry.

Diageo India initiates removal of mono cartons of VAT 69, Black & White and Black Dog

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In line with its initiative Society 2030: Spirit of Progress and its 10-year ESG action plan, Diageo India will be initiating a phased removal of mono cartons from its popular Scotch brands in India VAT 69, Black & White and Black Dog. Although there isn’t a clear timeline on when this removal is expected to commence, it includes Diageo’s global effort to be zero-waste to landfill from its own operations and offices by 2030.

The move comes following the announcement in May this year for the removal of mono cartons from its scotch portfolio brands globally, which included brands like Johnnie Walker Black Label, Johnnie Walker Red Label, Buchanan’s Blended Scotch Whisky and Bell’s Original Blended Scotch Whisky.

Although there isn’t a timeline on when the phased removal in India will commence, in May Diageo had stated that the removal of these mono cartons will allow the company to assess the response from the consumer, which if successful will be expanded to other brands as well in 2023.

What will the customer response be to this announcement in India remains to be seen, especially since standing out in a shelf space in a country like India is important, due to its stringent marketing policies. It will also be interesting to see if this move will prompt other manufacturers to follow a similar path.

Currently there isn’t any update yet if there will be any changes made to the packaging (we will update the article periodically), considering mono cartons play an important role in branding and packaging of the product. Also whether the removal of mono cartons is expected to affect the product pricing, also remains to be seen. Since manufacturers spend a considerable cost towards packaging their products, the cost is often passed onto the consumer.

Diageo believes that the phased removal will engage consumers to participate, contribute and promote a progressive move to a sustainable future and will result in saving 10,000 tonnes of paper and reducing 7,000 tonnes of carbon emissions annually.