Varun Beverages To Enter Alcobev Segment, Ropes In Ex-Diageo Executive Prathmesh Mishra

New Delhi: Varun Beverages, PepsiCo’s leading bottler, will foray into the alcoholic beverages segment as per its diversification strategy, according to a regulatory filing by the company on Tuesday.

The company will set up a new subsidiary, “KIVA Spirits and Company”, to enter the ready-to-drink (RTD) alcoholic beverages business and has appointed former Diageo executive Prathmesh Mishra as its chief executive officer and managing director.

The board of the company, at its meeting held on Tuesday, approved “to incorporate a wholly-owned subsidiary company in India, inter alia to carry on the business of ready-to-drink, alcoholic beverages and allied products, subject to receipt of applicable requisite approvals”.

It also approved the appointment of Mishra as the CEO and MD of the wholly-owned subsidiary company, which is being incorporated to undertake the company’s diversification into RTD, alcoholic beverages and allied products, it said.

“Varun Beverages will be the holding company of KIVA Spirits and Company Ltd,” it said.

Besides, it also approved to “incorporate a joint venture company in Tunisia, inter alia, to carry on the business of production and distribution of beverages including carbonated soft drinks, juices, water and dairy”.

Mishra is a seasoned business leader with more than 30 years of experience across consumer businesses.

He most recently served as the managing director for Korea and Japan at Diageo, where he was responsible for driving business growth and strategic leadership across the two premium, complex Asian markets.

In June this year, Varun Beverages reentered into a revised exclusive bottling appointment and trademark license agreement (EBA) with PepsiCo for the India market.

The changes in the aforesaid agreement include extension of the EBA for a term up to April 30, 2049, revised from the earlier term up to April 30, 2039.

However, there is a difference between the previous and the fresh agreements with PepsiCo.

The earlier EBA restricted Varun Beverages from carrying out any activity other than PepsiCo; however, in the fresh one, this rider was deleted, Varun Beverages had earlier said in an exchange filing.

The updated agreement provided Varun Beverages with the opportunity to diversify beyond PepsiCo’s bottling operations.

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