India Food & Drink Report Q2 2013 - New Report Available

From: Fast Market Research, Inc.
Published: Tue May 07 2013

In September 2012, in what might be in time remembered as the most significant global retail event of the year, India finally opened up its retail industry to foreign investors, potentially paving the way for multinationals such as Carrefour, Tesco and Walmart to enter what is a potentially outstanding retail opportunity. The new legislation has been met very favourably by the pro-business lobby, which has grown frustrated at how long it has taken India to pass this legislation, especially after some false hopes, including most recently in late 2011 when the government reversed its decision to allow foreign retailers to invest in controlling stakes. We believe Walmart to be the strong favourite to lead investment in India over the next few years, ahead of Carrefour and Tesco, which, as we have argued previously, are preoccupied with sorting out their domestic businesses.

Full Report Details at

Headline Industry Forecasts (local currency)

* 2013 food consumption growth = +6.6%; five-year compound annual growth rate (CAGR) 2012-2017 = +7.1%
* 2013 alcoholic drink value sales growth = +12.6%; CAGR to 2017 = +12.9%
* 2013 soft drink value sales growth = +17.8%; CAGR to 2017 = +16.6%
* 2013 mass grocery retail sales = +16.6%; CAGR to 2017 = +14.7%

Key Company Trends

Diageo Gets Regulatory Approval For United Spirits Deal: In March 2013, it was reported that the Indian Competition Commission had given the green light to Diageo's proposed acquisition of a 53% stake in United Spirits - the country's largest spirits producer. The commission's decision was expected, and the deal will mark the latest chapter in Diageo's pursuit of emerging-market-based assets, which has seen it close deals in China, Turkey and Tanzania over the past two or so years. Diageo did not spend heavily on acquisitions in the years leading up the global financial crisis despite being in a strong enough position financially to do so. Therefore, it has not been restricted in the way a number of companies have been over the past 2-3 years.

General Mills Eyes India: In September 2012, US food giant General Mills said that it is looking for acquisitions in India to cement its exposure to the world's most attractive emerging markets. In an interview with the Financial Times, the firm's CFO suggested that exposure to the Indian market would complement its strong growth in China and improved position in Brazil following the acquisition of Yoki.

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