PTI

Big alcohol Co''s will have to look for acquisition:ICRA

Thu, Nov 5 10:20 PM

New Delhi, Nov 5 (PTI) Global alcohol beverage majors will have to look for acquisitions soon to gain foothold in the Indian liquor market as selling imported products will be difficult to sustain because of high taxes and stiff competition from local players. "Foreign players, who have not yet established manufacturing facilities (in India), will have to capitalise soon on the small window opportunity for growth through acquisitions," rating agency ICRA said in its report.

Global players, who are mostly selling imported spirits in the bottled in origin (BIO) segment are facing stiff competition from the local players as they are also adding foreign brands to their product portfolio, the report said. Foreign players are also finding it difficult to sustain their business on account of higher taxations, which forces them to go on local players way, i.

e. to have distilleries in key markets instead of selling in the BIO segment, it added.

Indian liquor market, excluding country liquor, stood at around 190 million cases in 2007-08, and is expected to grow up to 220 million cases by 2010. The report also highlighted that despite the projected growth in consumption of spirits in the country, local firms are mostly opting for partnerships and collaborations with foreign companies for expansions as the industry debt levels are very high and is difficult to get finances.

".

the credit crunch is likely to delay some expansion plans until both local and global banks resort to further lendings," ICRA said in its reports.

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