United Spirits Limited (USL) will provide sales promotion services to Diageo India for all its brands in India from 1 Oct. Diageo is a prominent seller of various popular brands, including Smirnoff Vodka and Johnnie Walker whiskey in India. Whereas, USL, is India’s top spirits maker, and markets various liquor brands including Signature, Bagpiper, Antiquity, Royal Challenge in the country.
Diageo has signed an agreement with the Bangalore-based USL under which the latter would sell Diageo brands in India with effect from next month.
World’s largest spirits maker Diageo Plc will use United Spirits Ltd. (USL), in which it picked 25.02% stake for Rs 5,235.85 crore, as the entity to sell all its brands in India as part of plans to consolidate its business in the country.
Under the proposed sales agency arrangement, USL will provide sales promotion services to Diageo India for all Diageo brands manufactured and/or imported by Diageo India and sold in India from 1 October 2013. Diageo India would remain responsible for the strategy, marketing, import, manufacture, and bottling of Diageo’s brands in India.
“We would expect to formalise this arrangement shortly and that the arrangement will be effective from 1 October 2013,” the spokesperson informed to media. Commenting on the rationale behind the deal, the company said the arrangement puts into place the best model that will help deliver growth and maximise USL’s existing infrastructure and relationships with trade.
“USL brings increased scale to Diageo’s current sales activity with their large sales force which can promote Diageo’s brands through their calls to on and off trade outlets and through merchandising activities and sales activation,” the spokesperson added.
It is worth noticing that earlier this year, Diageo had completed the acquisition of 25.02% stake in Vijay Mallya-led USL on completion of a share purchase deal announced last year.