Whyte & Mackay to add fizz to Diwali

United Spirits will launch some of the brands from the Whyte & Mackay portfolio in India around Diwali this year. By November, brands like Dalmore Single Highland Malt, Fettercairn, Glayva and Isle of Jura single malt Scotch whisky and Vladivar Vodka should be available at distributors across the country, according to UB group chairman Vijay Mallya.

The products would also be sold in markets such as China, South Korea and Spain, Mallya said.

The Rs 2,965-crore United Spirits will also introduce exclusive distributor-wholesaler arrangements shortly. Such arrangements, which will be entered into across India, could raise the barrier for new entrants into the market.

Mallya also said schemes would be introduced, through which customers could accumulate Kingfisher miles against the purchase of any UB product.

United Spirits will also strengthen its focus on its wine business and in September, will launch two brands "" Zinzi and Bouvet Ladubay.

The Four Seasons brand would be launched in October next year, Mallya said, adding that the company's proposed winery in Baramati would also be commissioned around that time.

The wine market in India is now 500,000 cases a year and is growing at 50 per cent per annum. It was expected to grow at 70 per cent in the future, said analysts.

Meanwhile, the management might consider listing Whyte & Mackay on the London Stock Exchange to raise capital, Mallya said. The idea is to repay part of the debt on the books of Whyte & Mackay.

He added that if necessary, United Spirits might sell a part of its treasury stock of 10.8 million shares to repay borrowings, currently of the order of Rs 6,000 crore. About Rs 5,100 crore of debt has been taken on to fund the Whyte & Mackay buy and the average cost of the debt is 8.5 per cent.

United Spirits, the second largest spirits manufacturer in the world, acquired Glasgow-based Scotch whisky maker Whyte & Mackay for $1.2 billion (around Rs 4,866 crore) in an all-cash deal in May this year.

Since the acquisition, scotch prices have risen about 10-15 per cent, increasing the value of the inventory with Whyte & Mackay to about £400 million.

Although United Spirits sells close to 60 million cases of spirits a year, its existing whisky brands are distilled from sugar or molasses and not from grain. This had prompted the Scotch Whisky Association to staunchly resist Mallya's attempts to sell his brews in Europe.

W&M, which sold 9 million cases last year, had a global market share of 10 per cent in the Scotch whisky segment. At present, thanks to a high tariff structure, whisky accounts for a mere 1 per cent of the liquor market in India, which stands at 150 million cases yearly.

W&M had recently restructured and relaunched its brands, investing $220 million (Rs 892 crore) in the process. The launch of the W&M products would help United Spirits improve its position in the premium spirits segment, analysts said.