Tartans in Thailand - Pernod Ricard’s Thai Whisky War of 2007
Lovely Professional University
Department of Management
Case Study Write Up
Tartans in Thailand - Pernod Ricard’s Thai Whisky War of 2007
Case Facts
Thailand
* World’s 21st most populous country with 64 million residents * Most of the population was rural, with only 33 percent living in urban areas, and increasing at a rate of 1.7 percent per year * One of the most attractive East Asian markets with foreign investment-friendly policies and an established infrastructure
Scotch Industry Landscape * Whisky distilled in Scotland could legally bear the label of “Scotch” * All the Scotch whisky had to have an alcoholic strength of between 40 and 94.8 percent and had to have been aged in oak casks for at least three years and one day * Scotch could be divided into two categories: * Single Malts – Distilled exclusively at one distillery * Blends – Resulted from mixing whiskies from two or more distilleries * Imported Scotch generally represented a high-margin luxury good, particularly in higher-end segments as inventory cost of storing a whisky was high. For example, Chivas Regal 25 year needed twenty-five years necessary to make
Thai Whisky Market * The Thai Whisky market broke down into two segments as determined by consumer perceptions: * Local (Catered to Thailand’s approximately 40 million rural residents, who had generally below-average income) * Imported (Catered to higher-income Thai urban professionals) * According to World Health Organisation, Thailand ranked forty-fifth in annual per capita alcohol consumption * Thailand’s overall consumption came from spirits, particularly whisky * Consumption of whisky in Thailand was at an average of 7.13 litres per person per year * A large potential customer base for growth existed in Thailand since more than half of Thailand’s population were Millennials (Under thirty years of age) * Major Players in Thai Imported Scotch Whisky
Department of Management
Case Study Write Up
Tartans in Thailand - Pernod Ricard’s Thai Whisky War of 2007
Case Facts
Thailand
* World’s 21st most populous country with 64 million residents * Most of the population was rural, with only 33 percent living in urban areas, and increasing at a rate of 1.7 percent per year * One of the most attractive East Asian markets with foreign investment-friendly policies and an established infrastructure
Scotch Industry Landscape * Whisky distilled in Scotland could legally bear the label of “Scotch” * All the Scotch whisky had to have an alcoholic strength of between 40 and 94.8 percent and had to have been aged in oak casks for at least three years and one day * Scotch could be divided into two categories: * Single Malts – Distilled exclusively at one distillery * Blends – Resulted from mixing whiskies from two or more distilleries * Imported Scotch generally represented a high-margin luxury good, particularly in higher-end segments as inventory cost of storing a whisky was high. For example, Chivas Regal 25 year needed twenty-five years necessary to make
Thai Whisky Market * The Thai Whisky market broke down into two segments as determined by consumer perceptions: * Local (Catered to Thailand’s approximately 40 million rural residents, who had generally below-average income) * Imported (Catered to higher-income Thai urban professionals) * According to World Health Organisation, Thailand ranked forty-fifth in annual per capita alcohol consumption * Thailand’s overall consumption came from spirits, particularly whisky * Consumption of whisky in Thailand was at an average of 7.13 litres per person per year * A large potential customer base for growth existed in Thailand since more than half of Thailand’s population were Millennials (Under thirty years of age) * Major Players in Thai Imported Scotch Whisky