Glenmorangie supports India-UK free trade agreement that improves access to Indian consumer: CEO

"Our position is that we're supportive of working with the Indian government on a free trade agreement that allows better, more consistent access to the market. Of course, it is down to every state to set the rules, though," he said.

Whisky was a hotly debated subject when India and the UK began negotiating on an FTA in January 2022, as many Indian associations were against such an agreement. India, however, is expected to allow the import of Scotch whisky in both barrels and bottles.

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Glenmorangie is therefore increasing its focus on India, which it expects to become its second-biggest market in the next five years as the high-end segment has been growing at 20% a year, MacRae said. Glenmorangie is owned by luxury conglomerate Moët Hennessy Louis Vuitton, founded by French businessman Bernard Arnault.

MacRae said, "Very broadly, when we look at how the world drinks single-malt Scotch whisky, it's almost exactly a three-way split between the Americas, Europe & Africa, and Asia, but there's no doubt that in the past few years one of the most exciting markets for us has been India. The Indian love affair with single malt whisky and whisky in general is long-established. Almost 80% of all spirits consumed in India are whisky."

Whisky business

India’s single malt market was worth an estimated €390 million or about ₹3,600 crore, he said. "India's got a fantastic, dynamic economy which is performing very well. You also have 900 million people in the middle class, making it the second-biggest in the world. And GDP is growing at more than 8%, which is increasingly rare in the world at the moment," he added.

Also read: Indian single malts make it large

Demand shot up dramatically during the pandemic, and Indian malts such as Amrut, Paul John, Indri, and Gianchand became household names among the affluent. According to the Confederation of Indian Alcoholic Beverage Companies (CIABC), which represents the interests of these companies, about 675,000 cases of single malt whisky were sold in India in 2023, and more than half of these were produced in the country. That represented 16% growth over 2022, during which 577,000 cases were sold.

MacRae said, "We've seen the adoption of Indian whiskies and Japanese whiskies here. It's a fiercely competitive market. There is a lot of tension between rivals to make sure the pricing is effective. There are also some difficulties and challenges in navigating the Indian legislative environment. It's a market with great complexity."

Spirits are down at LVMH

Parent company LVMH recorded total revenue of €41.7 billion in the first half of 2024, but revenue from wines and spirits fell 12% to €2.8 billion from €3.18 billion in 2023. Profit from the wines & spirits portfolio was down 27% to €777 million in the first half of 2024 from the same period last year. Although the company did not specify which of its spirits businesses performed poorly compared to last year, this could be one of the reasons why it is looking to expand in "frontier markets" like India.

The company said, however, that the performance of its wines and spirits portfolio reflected the ongoing normalisation of demand that began in 2023. "Consumption has slowed down in China. There's a mixture of short- and long-term issues there and some longer-term structural growth issues. The International Monetary Fund and other global bodies will be projecting slower growth for China in the future than, for example, India. I think that's related to some big demographic issues as well as their growth issues," MacRae said.

Also read: Imported cheese and whisky? They may not have made it past India’s quality checks

Globally, the single malt industry has been struggling to cope with growing demand for its product, which can take years up to 18 years to produce. Many companies are reducing ageing times for their whiskeys and phasing out the practice of displaying it on their labels to cater to the increased demand.

MacRae said, "There are advantages and disadvantages of putting an age on a whisky. Most of these casks have to be aged for 30 years, and predicting demand that far out is not easy. Thankfully there is now a generation of consumers who are a bit more aware that age isn't the only component of quality."