Founded in 1996, John Distilleries Ltd has become a prominent player in the alcoholic beverage industry, best known for its flagship brand, Original Choice. The company exports its Paul John Single Malts to over 44 countries, making it one of the best-selling premium liquors in India and a highly awarded Indian single malt with over 320 international accolades. Recently, Sazerac Company, the largest family-owned spirits company in the US, acquired a significant stake in John Distilleries.
In a candid conversation with Timsy Jaipuria, Chairman Paul P John discussed challenges in taxation and future growth prospects.
On the company’s journey: John Distilleries started with Original Choice, which quickly became a popular brand in Karnataka. Over the years, the company expanded to other southern states and launched Paul John single malts in the UK in 2012 and in India in 2014. Today, their products are available in 22 states and many international duty-free stores. The company has also broadened its offerings to include premium wines, whiskey, brandy, and gin, seeing an impressive 25% average annual growth in single malts while Original Choice continues to achieve record sales.
Challenges in the liquor market: The Indian liquor market is fragmented, with varying duties, taxes, and market access depending on the state. John expressed the need for standard taxation and a more transparent process for doing business. He noted that while liquor is a major revenue source for states, the industry deserves similar support and benefits as other sectors.
Quality concerns with rising competition: John acknowledged that while increased competition is beneficial, it also raises quality concerns. The industry needs stricter regulations to define what qualifies as an Indian single malt, particularly regarding the origin of ingredients and production methods.
Expansion plans: The company is investing ₹100 crore to triple its production capacity at its Goa distillery to meet growing domestic and export demand. The Goa distillery also features a visitor center to educate consumers about the production process of single malts.
Future offerings: John Distilleries plans to continue releasing special editions and expanding its range of products, including new variants in whiskey, gin, vodka, and rum. They are also looking to introduce products from the Sazerac portfolio to boost the American whiskey segment in India.
Export challenges and opportunities: The company sees strong growth potential in Asian markets, particularly South Korea, Taiwan, Japan, and Singapore. However, awareness of Indian single malts remains low internationally, presenting a challenge in marketing and educating consumers.
Impact of free trade agreements (FTAs): John discussed how recent FTAs, like the one with Australia and upcoming agreements with the UK and EU, could benefit mid-range products entering India. However, he stressed the importance of ensuring a level playing field for Indian products, as current regulations often favor imported brands. Properly managed, these FTAs could significantly boost the Indian luxury alcohol market both domestically and globally.
