Jack Daniel's maker eyes India-US trade pact

New Delhi: Jack Daniel’s whiskey maker Brown-Forman’s India managing director Gaurav Sabharwal said the US spirits company is “keenly watching” developments on the India-United States trade deal.

“The positive signs have been there.

We are very keenly watching that space because most of our business comes from American whiskey.” The first phase of the bilateral trade agreement between the two countries may be finalised by mid-July, according to government officials.

While the US and India discussed a possible trade deal earlier this year, discussions slowed down amid talks on sweeping tariffs.Brown-Forman, which operates as a 100% subsidiary in India, imports its full portfolio and doesn’t manufacture locally as of now.

“From an overall impact, with inflation going up, petrol prices, transportation - that is going to put some pressure.

The other is that as the consumers start looking at fighting inflation, discretionary spend is obviously the first thing that takes a knock.

So we are keeping a close watch.”Sabharwal said the West Asia war has “so far, not impacted its business in India, adding though that the spirits maker is keeping a close watch on any ripple effect that inflation and supply disruptions may have.”The Kentucky-based spirits maker recently rejected two potential deals - a nearly $15 billion takeover offer from the US bourbon whisky maker Sazerac and merger talks with French spirits company Pernod Ricard.

Last week, the spirits maker reported better-than-expected sales for the March ’26 quarter aided by steady demand for premium spirits, but cautioned about impact on consumer spending behaviour for the year.

"We anticipate the operating environment for ‌fiscal 2027 to remain challenging, as macroeconomic pressures and geopolitical instability continue to negatively impact consumer behaviour and beverage alcohol consumption, particularly within developed markets," the company said in its earnings statement.Sabharwal said ready-to-drink concepts like Jack & Coke “are a growing space in India, but small.” India had introduced Jack & Coke about three years back in select markets such as Goa, Haryana and Bengaluru.

“It's something which works pretty well with the legal drinking age - 25-30 years old.

RTD is a growing space, but a smaller space as far as the Indian spirits and beer consumption goes.

So we are still figuring out the rollout plan because one of the critical things is to get the pricing right and obviously one has to make the margins as well.

The demand is there, but we just need to manage the system a little better.” Brown‑Forman Corporation reported fourth quarter net sales increase by 2% to $912 million compared to the same year-ago period.

Operating income decreased 53% to $96 million.For the India unit, while the mainstay remains Jack Daniel’s, Sabharwal said the company is gradually building its portfolio to include Woodford Reserve and Herradura.“One of the biggest mindset shifts is that the propensity to spend has gone up pretty much over the last 10 years.

It's about people getting into the legal drinking age and numbers estimate that over the next five years we are going to be adding 20 million people into the legal drinking age every year.

The legal drinking age will move anywhere between 18 to 25.

Then there is change in social conditioning.

Penetration numbers are also increasing.

So you have a huge cohort coming in,” he said. ...