News: India-based United Spirits Limited will become more powerful after alcoholic beverages firm Diageo integrates its portfolio of brands into the company in October, according to United Spirits Chairman Vijay Mallya. The merger will make United Spirits' product portfolio more comprehensive, which will be a major advantage, Mallya said. Following the integration, United Spirits will maintain its focus on premium brand categories, Mallya added.
BMI View: The Indian beer market was under the cosh in 2012. Tight credit conditions and elevated inflationary pressure dampened consumer appetite for discretionary consumer purchases such as alcoholic drinks, while excise duty increases and regulatory changes in key states such as Maharashtra, Tamil Nadu and Andhra Pradesh further tempered domestic beer demand. As the Indian consumer adopts a conservative stance in terms of spending, beer growth will remain weak in 2013. F urther tax hikes would represent a key risk to the sector's prospects.