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Flat in the UK, Scotch makers raise a toast to Asia

New Delhi, Oct. 3: As Scotch becomes passé in the UK, ale-houses and pubs in western Europe, India, Taiwan, Korea and Brazil are becoming key markets for this connoisseur’s tipple.

Europeans no longer see Scotch as a young drink. Growth rates are waning there.

“In France and the UK, the growth rate is reduced to zero. In Spain, where the growth was as high as 10-15 per cent about 7 years back is now only at about 3-4 per cent,” says Richard Travers-Griffin, area director-emerging markets of Cutty Sark International, a family-owned Scotch whisky firm. “We need to find new markets,” he said.

Consequently, makers of Scotch are increasingly looking at Asian markets for growth drivers. Regional vice-president for Asia-Pacific for Chivas Regal Peter Prantice feels this region will soon account for 50 per cent of all Scotch whisky sales, up from the current third of global sales.

However, markets like India, Korea and China account for far smaller sales volume. “At present, 5 per cent of the Cutty Sark sales turnover comes form emerging markets, but we have a 10-year vision plan which targets to garner 20-30 per cent of the turnover from these emerging markets,” Griffins said.

Among emerging markets, India, despite its current small market size of half a million, is rated as “having the largest potential as it is growing at 7-10 per cent”.

Scotch makers feel that aspirational values, easier availability and lower prices have made the drink popular in India. Although brands such as Chivas Regal and Black Label have always preferred duty-free shops, glitzy hotel bars and top rung clubs as their outlets, Cutty Sark has already started tapping more mundane outlets in Mumbai and plans to replicate this in Calcutta and Delhi and 16 other cities, subject to state liquor laws. Though a litre bottle of Cutty Sark blend sells for Rs 1,400, Griffin feels the whisky could well retail about 50,000 cases a year soon.

Even Shaw Wallace, which is primarily into the business of making Indian made foreign liquor, is considering a move to import Scotch into the country, said an official spokesperson for the company. At present, some of its premium brands such as Antiquity and Royal Challenge have Scotch blends.

“Whisky is a popular drink in India, and with the prestige value of Scotch, you have a sure success formula for Scotch,” the spokesperson for Shaw Wallace said.

Although India’s potential within emerging markets is high, Taiwan remains the largest Scotch market with a market size of about 1 million cases. The market in China is almost as big as India, but analysts say growth may be far slower since Chinese have always preferred wine and beer.

Apart from India, another market in which Scotch makers have made substantial investments is Korea, which currently sees a sale of about a million cases. Though Griffin refused to divulge the amount, he said Cutty Sark expected high sales from east Asia as both its brands — Cutty Sark blended whisky and Glenrothes single malt — enjoys high preference in Korea.

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