UK and India are expected to announce a free-trade agreement (FTA) – potentially by the end of October – which investors would deem as good for the Scotch whisky industry, especially Diageo PLC (LSE:DGE), according to Citigroup.
Diageo owns 200 brands, with sales in over 180 countries, including the world’s best-selling Scotch whisky brand Johnnie Walker.
Citigroup predicted Scotch sales could rise by as much as US$2.9bn over time.
Pernod, however, is expected to benefit more from the possible trade deal than Diageo, Citi added.
This is because Pernod owns 100% of its operations, nonetheless, all Scotch importers to India will still welcome the news.
Citi reiterated its ‘buy’ rating on Pernod.