Mumbai: Amrut Distilleries, India's single malt pioneer, is facing an inventory shortage as whisky demand is sharply outstripping production. This is expected to impact the Bengaluru-based company's growth performance through 2030, said managing director Rakshit Jagdale.

At the same time, increased imports of cheaper Scotch due to India's free trade pact with the UK will likely weigh on sales of domestic whisky brands especially of newer blended whiskies, he said. "Before 2030, we'll see sort of flat sales because that's the quantity that we have," Jagdale told ET. "We cannot increase the quantity."

Amrut, which has a single malt inventory of 75,000 nine-litre cases, expanded distillation capacity to 1.3-1.4 million litres last year. It however can't significantly boost output in the near term as Indian single malt requires at least three years of maturation. With production constraints limiting its ability to expand sales, Amrut is broadening its portfolio beyond single malt. It has introduced blended malt whisky to tap the luxury spirits market without relying entirely on a category in which supplies can't be increased quickly.

ET Bureau

"Otherwise, you are stuck with single malt," Jagdale said. "You are saddled with the limited volume that you can supply the market." Prices of some imported Scotch brands have dropped over 15%, affecting Amrut's sales in North India.

For now, the company is holding off on major price cuts while assessing the impact of India-UK FTA. Amrut sells rum and brandy and is exploring a tie-up with Mexican distilleries to develop its own tequila brand, potentially starting with bottling in Mexico before considering a shift to India, said Jagdale. It is also planning a more affordable single malt priced about 15% below its Fusion brand in North India before December.

Amrut and Paul John were the first Indian single-malt brands, launched in the 2000s, followed by the likes of Rampur, launched by Radico Khaitan a decade ago. However, in the past few years, the market has seen a flurry of new single-malt distillers like Piccadily Agro's Indri and Kamet as well as global giants including Pernod Ricard and Diageo adding their own Indian brands like Longitude 77 and Godawan.