Diageo India has entered into Extra Neutral Alcohol (ENA) manufacturing contract with Maharashtra-based Capovitez Private Limited, according to an exchange filing.
The company said that the consideration under this agreement is linked to variable factors such as size of production, inflationary trends impacting commodity pricing, technological upgrades, and other such parameters which have been mutually agreed between the parties.
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Further, it noted that the agreements are entered into in the normal course of business for a tenure of three years, and covers provisions such as purchase of grain and sale of ENA, delivery, storage, quality in service, material price and payment, confidentiality, etc.
“This arrangement enables USL to maintain continuity of supply of ENA and regulates the pricing index for the ENA manufactured through conversion of grain,” the exchange filing read.