Radico in talks with Diageo to cut JV stake

India's second-largest liquor manufacturer, Radico Khaitan, today said that it is talking to UK-based Diageo Plc to reduce its stake in their joint venture Diageo Radico Distilleries.

"Things are moving and at an appropriate time we will discuss it out. At this point of time all I can say is that talks are going on," Dilip K Banthiya, chief financial officer told Reuters.

The world's largest alcoholic drinks maker and Radico have an equal JV to make and sell liquor products in India.

In January, the Indian firm had declined to comment on whether it would be willing to reduce stake in the joint venture.

Late last year, Diageo had received approval from India's Foreign Investment Promotion Board to raise its stake in the joint venture to 100 per cent.

Radico, which has brands such as 8 p.m. Whiskey, Magic Moments, Contessa Rum and Old Admiral Brandy in its portfolio, in its four-year old joint venture with Diageo has so far produced the premium whiskey brand, Masterstroke, launched about three years back.

The firm has raised Rs 340 crore recently via a Qualified Institutional Placement (QIP) and has used the proceeds to reduce debt.

The firm's current debt on the books is at Rs 420 crore from Rs 770 crore before the QIP, Banthiya said.

NEW LAUNCHES

In the current fiscal the firm plans to launch two more whiskey brands in India.

"We are planning to launch two more whiskeys from Radico in the premium space and on that you will hear very soon... the launch will be this fiscal," Banthiya said.

The Indian liquor maker also said it expects a huge boost to its performance in this fiscal as it targets a more than two-fold jump in sales in its premium brandy 'Morpheus'.

"Morpheus is doing very well and we have done 80,000 cases in the first year itself and going forward we are targetting a substantial growth of about 240,000-270,000 cases," Banthiya said.

"The product is at a high price point so it should give our margins a significant boost," he added.

Radico, which saw overall volume sales of 14.62 million cases in FY10, a growth of 13.6 percent from the same period a year earlier, expects a volume growth of 15-17 per cent in FY11.

The firm is expecting a topline growth of 20-22 per cent and expects operating profits to climb 27-30 per cent in FY11. It has also outlined a capital expenditure of 150-200 million rupees for the current fiscal.

"The capex is just for some normal maintenance requirements and we dont have any capacity expansion this year," Banthiya said.

The firm which did exceptionally well this year saw its net profit for the twelve months ended March 31 surge to Rs 41.54 crore from Rs 6.53 crore in FY10 and saw a sales jump 23 per cent in the same period to Rs 1,150 crore.

"Price increases and lower raw material prices helped us achieve such good numbers..we expect to continue this performance with good volume growth and as molasses prices in the past month have corrected by 18-20 per cent," he said.

"If it stays at current levels also our operating margins will improve by 100-150 basis points," Banthiya said.

Shares of the firm ended up 1.08 per cent at Rs 126.45 in a strong Mumbai market today.

The English invented sparkling wine in the 17th century, but failed to profit from it because their cold, dank summers yielded crummy grapes. Three decades later, a French monk named Dom Pérignon adapted the idea and devised a winning tipple, Champagne.

The Brits are starting to claw back some ground. In January, a little-known bubbly from the U.K's Nyetimber Estate was crowned "world's best sparkling wine" at a prestigious taste-off in Italy, defeating a dozen Champagnes, including Roederer, Bollinger and Pommery. Last year, when Britain hosted the G-20 meeting, another effervescent Nyetimber was served to President Barack Obama, Germany's Angela Merkel and President Nicolas Sarkozy of France.

English bubbly is on the rise partly due to better winemaking techniques. But some vintners say they're being helped by another, unexpected factor: a warming climate.

Official data indicate that the past 10 years were the warmest on record globally. In England, this led to plumper and riper grapes most seasons, especially for sparkling wines. The number of vineyards in the U.K. jumped to 416 in 2008 from 363 in 2000, according the trade group English Wine Producers.

"Just 20 years ago, it was really difficult to make good wine in cooler climate areas," says Gregory Jones, who studies the effect of climate change on the global wine industry at Southern Oregon University. "Now it's not such a challenge."

With the help of warmer summers, "some of the risk of making sparkling wine here is gone," says Mike Roberts, founder and chief winemaker of the Ridgeview estate here, 45 miles south of London. "We have everything going for us to out-Champagne Champagne."

Last year, the fifth-hottest on record, Ridgeview's grapes ripened two weeks earlier than usual, allowing for the harvest to be brought in before the onset of wet October weather. Mr. Roberts and other English winemakers say 2009 was one of the best growing seasons they've seen.

Most connoisseurs insist that no sparkling wine can match the range, finesse and flavor of Champagne, made only in the Champagne region of northeastern France. Yet English fizz is bursting a bit of France's bubble.

Mr. Roberts' wines have won dozens of prizes, including a gold and silver medal at Effervescents du Monde, an international competition held in France. Another Ridgeview sparkler, blanc de blanc, was served at a 2004 bash to mark Queen Elizabeth's 80th birthday.

Many English still wines, including white and rosé varieties, have been considered thin and acidic. As the climate has warmed, they've benefited as well, becoming less acidic and more fruity. English reds still struggle, partly because those grapes need a much hotter climate to ripen well.

Sparkling wines have improved most, because England's warmer, drier summers now yield juicier grapes with more flavors-while still remaining cool enough to create the racy acidity so vital to a fizzy wine.

The Romans introduced winemaking to England after invading in 43 A.D. In the mid-1600s, English scientist Christopher Merret discovered that adding sugar to finished wine led to a second fermentation and yielded a fizzy wine. Later, Dom Pérignon came up with the idea of making sparkling wine with bubbles by blending grapes from different vineyards-a key development that gave French makers the sparkling advantage.

France's annual output of Champagne, some 320 million bottles, is much larger than the 1.4 million bottles of fizz England makes each year. Still, representatives of big Champagne houses such as Louis Roederer (maker of Cristal), Pol Roger and Duval-LeRoy have toured England, scoping out vineyard sites-and their smaller new rivals.

Roger Begault, export director of Champagne house Duval-LeRoy, founded in 1859, acknowledges that several English sparkling wines are "pleasant and well made." A few years ago, a Duval-LeRoy envoy surveyed southern England to consider starting up vineyards there. Still, he insists, "Champagne only comes from Champagne!"

Rising temperatures have helped France's Champagne makers, too. But if the trend continues, lower-end bubbly could be challenged, at least on price. English bottles today can cost anywhere from $27 to $37, roughly the same as non-vintage Champagne, and far less than the special vintages bottled in outstanding years.

The U.K. is the biggest importer of Champagne in the world, and today demand for domestic fizz is picking up. Of the 3.1 million bottles of U.K. wine produced in 2009, about 45% were of the sparkling variety, according to an estimate by English Wine Producers. In 2005, only 20% of domestic bottles produced were bubbly.

Waitrose, the grocery store chain that commands a 61% market share for English wines, has its own vineyard. A separate vine-growing project has sprung up just 12 miles from London. One local grower is planning a tiny vineyard in the heart of the city, outside Kings Cross Station.

United Kingdom: Drink linked to Scottish crime problems

Scotland's chronic problems with alcohol abuse have left it lagging well behind England and Wales in the fight against crime, a study claims on Monday.

Overall crime in Scotland is at the same level now as it was in 1999 when the country was given its own parliament, according to an analysis of UK crime surveys by the Institute for Public Policy Research, a think-tank.

During a similar period, crime rates fell 11.2 percentage points in England and Wales and 9.2 percentage points in Northern Ireland.

Assault and vandalism are a particular problem for the Scots, according to the study. The number of incidents has increased over the past decade even as they have fallen in England, Wales and Northern Ireland.

Rick Muir, author of the IPPR report, said it was impossible to be certain why Scottish crime had not fallen in line with the rest of the UK, but that "booze is something that stands out".

Scots have been ranked as the eighth biggest drinkers of alcohol in the world per head of population.

"The fact that Scotland has a bigger problem with vandalism and assault than burglary or vehicle theft shows alcohol is likely to play an important role," Mr Muir said. In the most recent Scottish Crime and Justice Survey, 58 per cent of the victims of violence said their attacker had been drinking, compared with 47 per cent in England and Wales.

The study will be embarrassing for Holyrood because overall crime has fallen across Europe over the past 15 years, largely as a result of people becoming more prosperous.

Scottish government officials stressed on Sunday that the number of criminal offences recorded by police was at a 30-year low.

However, statisticians and criminologists prefer surveys of the general public - as used by the IPPR - rather than police figures because many people do not report crimes.

The Scottish government said: "While figures suggest crime levels in Scotland have generally remained more static than in England and Wales, they are still lower - 20 per cent of adults in Scotland have been the victim of at least one crime in Scotland compared to 23 per cent in England and Wales."

The ruling Scottish National party is seeking to clamp down on the drinks industry in an attempt to get to grips with the alcohol problem. A bill being debated by the Scottish parliament would set a minimum price for a unit of alcohol to stop drink being sold cheaply. The measure is opposed by the drinks industry, which says it will penalise hard-up but sensible drinkers.

Jasper Newton Danielle Shout'in Out to y'all

More people also drank at home instead of at pricier bars, restaurants

Americans' love affair with top-shelf booze cooled last year as the recession took a toll on high-priced tipples.

A new report by an industry group shows people drank more but turned to cheaper brands. They also drank more at home and less in pricier bars and restaurants.
Industry growth slowed in 2009, with the amount of liquor sold by suppliers up 1.4 percent. That's the smallest increase since 2001 and below the 10-year average of 2.6 percent.
Last year, the lowest-priced segment, with brands such as Popov vodka that can go for less than $10 for a 750 ml bottle, grew the fastest, with volume rising 5.5 percent, after edging up 0.6 percent in 2008. Meanwhile, the most expensive price range, roughly $30 or more for a 750 ml bottle (like Grey Goose, owned by Bacardi), fell the most, tumbling 5.1 percent.

The Distilled Spirits Council of the United States said in its report Tuesday that liquor suppliers reported flat total revenue of $18.7 billion last year.
Kenneth Jolly of Milwaukee has been swapping his favorite, pricier liquors such Patron tequila, for cheaper brands such as Jose Cuervo to stay on top of his budget. For him, it's simple math.
"If you consume a lot on a regular basis and you have people come to your house, you have to adjust," said Jolly, a 27-year-old network technician in Milwaukee who buys liquor every other week. "If your body can take it, you might as well buy the cheaper liquor."

Sales in stores - which make up three-quarters of liquor sales - rose about 2.1 percent, while sales in restaurants fell 3 percent.
"People still want to entertain themselves, they still want to get together with family and friends, so a lot of people will move from a restaurant to their living room," council President Peter Cressy said.
Vodka remained Americans' favorite liquor, accounting for almost a third of all spirits sold and sales of $4.56 billion.

Sales volume for the cheapest versions of tequila rose 21 percent, the fastest of any type of spirit. That's most likely because entertainers are using pre-made margarita mixes to serve at home, said David Ozgo, the council's chief economist. Plus you can mix it before guests arrive, so they don't know what brand you use, said Joan Holleran, director of research at research firm Mintel.
Cressy said the fact that people were still drinking more spirits bodes well for the industry, still recovering from a long decline from the 1980s through the mid-'90s, when liquor sales fell by a third as drinkers turned to beer. Since then, an ever-increasing array of expensive liquors have fueled rapid growth.

The industry's goal to keep people drinking spirits - no matter the price - and it can then get them to pay for higher-priced drinks when the economy recovers. Most major liquor manufacturers make brands in a variety of price ranges. For example, industry giant Diageo plc, based in London, makes vodka brand ranging from cheap Popov to midpriced Smirnoff to expensive Ketel One and Ciroc.Mintel's Holleran expects people to start going out more this year, as they get bored staying home and want to treat themselves to little luxuries - like a night out. "You want to go out and have someone do all the work for you," Holleran said.

Of course, switching brands isn't the only way to economize.
Matt McCluskey, a 28-year-old researcher in California, started buying most of his alcohol at Costco, trying to save money by buying bigger bottles. Now he spends $36 for 1.75 liters of Maker's Mark bourbon, rather than $25 for less than half that at his local liquor store.

"It's a lot harder to pour. That's the only drawback," he said.

More people also drank at home instead of at pricier bars, restaurants

Americans' love affair with top-shelf booze cooled last year as the recession took a toll on high-priced tipples.

A new report by an industry group shows people drank more but turned to cheaper brands. They also drank more at home and less in pricier bars and restaurants.

Industry growth slowed in 2009, with the amount of liquor sold by suppliers up 1.4 percent. That's the smallest increase since 2001 and below the 10-year average of 2.6 percent.

Last year, the lowest-priced segment, with brands such as Popov vodka that can go for less than $10 for a 750 ml bottle, grew the fastest, with volume rising 5.5 percent, after edging up 0.6 percent in 2008. Meanwhile, the most expensive price range, roughly $30 or more for a 750 ml bottle (like Grey Goose, owned by Bacardi), fell the most, tumbling 5.1 percent.

The Distilled Spirits Council of the United States said in its report Tuesday that liquor suppliers reported flat total revenue of $18.7 billion last year.

Kenneth Jolly of Milwaukee has been swapping his favorite, pricier liquors such Patron tequila, for cheaper brands such as Jose Cuervo to stay on top of his budget. For him, it's simple math.

"If you consume a lot on a regular basis and you have people come to your house, you have to adjust," said Jolly, a 27-year-old network technician in Milwaukee who buys liquor every other week. "If your body can take it, you might as well buy the cheaper liquor."

Sales in stores - which make up three-quarters of liquor sales - rose about 2.1 percent, while sales in restaurants fell 3 percent.

"People still want to entertain themselves, they still want to get together with family and friends, so a lot of people will move from a restaurant to their living room," council President Peter Cressy said.

Vodka remained Americans' favorite liquor, accounting for almost a third of all spirits sold and sales of $4.56 billion.

Sales volume for the cheapest versions of tequila rose 21 percent, the fastest of any type of spirit. That's most likely because entertainers are using pre-made margarita mixes to serve at home, said David Ozgo, the council's chief economist. Plus you can mix it before guests arrive, so they don't know what brand you use, said Joan Holleran, director of research at research firm Mintel.

Cressy said the fact that people were still drinking more spirits bodes well for the industry, still recovering from a long decline from the 1980s through the mid-'90s, when liquor sales fell by a third as drinkers turned to beer. Since then, an ever-increasing array of expensive liquors have fueled rapid growth.

The industry's goal to keep people drinking spirits - no matter the price - and it can then get them to pay for higher-priced drinks when the economy recovers. Most major liquor manufacturers make brands in a variety of price ranges. For example, industry giant Diageo plc, based in London, makes vodka brand ranging from cheap Popov to midpriced Smirnoff to expensive Ketel One and Ciroc.

Mintel's Holleran expects people to start going out more this year, as they get bored staying home and want to treat themselves to little luxuries - like a night out. "You want to go out and have someone do all the work for you," Holleran said.

Of course, switching brands isn't the only way to economize.

Matt McCluskey, a 28-year-old researcher in California, started buying most of his alcohol at Costco, trying to save money by buying bigger bottles. Now he spends $36 for 1.75 liters of Maker's Mark bourbon, rather than $25 for less than half that at his local liquor store.

"It's a lot harder to pour. That's the only drawback," he said.

A decade ago, limoncello was virtually unknown in the U.S., outside of Italian-American families that made their own. Now the sweet, lemon liqueur from Southern Italy's Sorrento Peninsula is something of a fad -- one that had its pop-culture moment back in November when Danny DeVito stumbled onto a morning television talk show fresh from an all-night limoncello bender with George Clooney. In today's bleary celebrity culture, no sort of notoriety is allowed to escape commercial exploitation. Thus the announcement this month that Mr. DeVito is lending his name to a new brand of the lemon juice. Let's just hope that Mr. DeVito learns to drink his namesake the right way.
 
Limoncello
1 dozen large lemons
1 bottle vodka
2 cups sugar
3 cups water
Peel thin strips of lemon, avoiding the subdermous white pith. Steep the peels in vodka for a week or so. Strain. Make simple syrup by dissolving sugar in water over a medium flame. Once the syrup is cooled, add it to the lemon-infused vodka. Bottle and chill.
As Mr. DeVito discovered, limoncello is deceptively potent. At 60 proof, the liqueur has about three-fourths as much alcohol as an average vodka. But it is so candy-sweet that the alcohol seems to disappear altogether. Yes, that can be dangerous, but I don't know how one could actually drink glass after glass of the syrupy stuff.
Drinking well is a matter not only of what, but when and how much. The when used to matter a lot, and seems to have become something of a forgotten particular. For example, you wouldn't want to drink a Martini after dinner any more than you would have your coffee with the appetizer. And how much matters for reasons beyond just sobriety. A small cocktail or two before dinner has traditionally been thought of as a proper stimulant to appetite and conviviality; more than that is likely to render one sluggish in both respects.
The when and the how much are crucial with limoncello. In Italy, the liqueur is served as a digestivo, a stomach-settler at the end of a meal. In that context, one small glass is just the right amount, a bright and refreshing swig of dessert. But I find that even a single glass more is a hopeless surfeit. Limoncello is far too sweet to drink in any quantity.
That's why, for me, Mr. DeVito's limoncello endorsement is of limited value. Though I might well trust a whisky recommended by a man not known for moderation, I have to wonder at the taste buds of someone who can take more than a couple of limoncellos in a sitting.
The importer that Mr. DeVito has hooked up with, Harbrew, has made a sub-specialty of branding drinks with celebrity names, large and small. For example they offer "Bench 5," a five-year-old blended Scotch branded by Johnny Bench. Five years isn't anything to brag about when it comes to the age of Scotch whisky, and it's not clear to me how associating a whisky with a Hall of Fame catcher will sell the stuff. More sensible is the iced-tea concentrate the company brands with the likeness and signature of celebrity bass-fisherman Jimmy Houston.
That's not to say that Harbrew is only in down-market products. It has just introduced a Duke Ellington-branded X.O. Cognac priced at $150 a bottle. That's a tie-in that actually makes some semblance of sense, as Ellington was not averse to a good brandy, on its own or mixed in a cocktail.
In his autobiography, "Music Is My Mistress," Duke describes a choppy Atlantic crossing in 1939. The band was aboard a luxurious French ship called the S.S. Champlain (a passenger liner that would be sunk a little over a year later, when pressed into service evacuating refugees). With his signature style of embellishment, Ellington described the rough seas: "You could hear the propeller spin and scream, and then the boat would slap back on the sea with a bump and a crash." Most of the band had crawled off, queasy, to their berths. But Ellington held on at the bar with trumpeter Rex Stewart. "Our drink was champagne and cognac, half and half," Ellington wrote. "When the bar was ready to close, we would order enough to last all night if necessary." Which was no small amount of champagne and cognac, given that they drank a toast every time "the boat tossed with an extra flip."
Harbrew is trying to entice cognac drinkers to try the Ellington brand by offering free MP3 downloads of Duke Ellington and his orchestra. The company is also relying on music to help sell Mr. DeVito's limoncello.
When it hits stores in August, Danny DeVito's brand will have to find room on shelves crowded with newly arrived limoncellos. In trolling a few local shops I was able to find half a dozen different brands. Of these, I thought the ones that came closest to the fresh taste of a homemade limoncello were the Gioia Luisa, Villa Massa and Toschi brands.
If you'd like to try your hand at the homemade sort, it's easy enough to do. Peel fine shavings from the skins of a dozen lemons; avoid cutting into the bitter white pith, so that the peelings are pure yellow. Pile the peel into a glass container, and pour in a bottle of vodka. Let it steep for about a week, or until the peels have lost all their color, before straining out the lemon peels. Dissolve two cups of sugar in three cups of water on a medium stove, and let it cool. Add the sugar syrup to the lemon-infused vodka, to taste. Bottle your limoncello, and keep it chilled.
You can make a similar liqueur using oranges instead of lemons -- or just about any citrus at all. But whether you're pouring your own house limoncello or one of the burgeoning number of commercial brands, just remember that it is best after a meal, and that one small glass is plenty.