The spirits maker overtakes Paris-headquartered Pernod Ricard, clocks sales volume of 100 million cases.
United Spirits Ltd (USL), the flagship spirits company of the UB Group, has overtaken Paris-headquartered Pernod Ricard as the world’s second-largest spirits company by volume, with a sales volume of 100 million cases (a case is nine litres) for 2009-10.
USL aims to achieve the top slot in the 2010-11 financial year. Diageo leads the world market, with an annual volume of 111 million cases.
UB Group Chairman Vijay Mallya said he would shortly unveil a new vision on the company’s plan to sell 200 million cases in future.
USL expects to make it to the top on the back of 14 per cent growth that it clocked for its brands, compared with the performance of top 100 spirits brands worldwide which collectively grew only one per cent. Moreover, 18 of the top 25 global premium brands, including Smirnoff, Bacardi, Johnnie Walker and Absolut, lost ground.
The Indian spirits industry is pegged at 236 million cases and USL has a 59 per cent market share in the segments it operates in. USL has brands like McDowell’s No.1, Bagpiper, Celebration, Director’s Special, Signature, Royal Challenge and White Mischief.
USL has been aggressively moving up the value chain for premium spirits consumption through acquisitions like Bouvet-Ladubay, a premium French wine. The company is also banking on the expectation that more than 100 million potential consumers will enter the legal drinking age in the next five years.
To this end, United Spirits has undertaken a capacity augmentation plan of over Rs 650 crore. The company recently acquired Tern Distilleries in Andhra Pradesh and set up a greenfield malt spirit plant in Nasik, Maharashtra. It also launched Black Dog 18 YO in the super premium Bottled-In-India scotch category to ramp up its market share. It also upped the ante in the premium IMFL segment, with the introduction of 100 per cent pure grain-based McDowell’s Platinum whisky.
Meanwhile, the group’s beer arm, United Breweries Ltd (UBL), also announced that it had sold more than 7.8 million hectolitres of beer, equivalent to over 100 million cases in the last financial year. This represents a growth of more than 20 per cent over the previous financial year. The company said this had been achieved even as UBL discontinued supply to Andhra Pradesh, the largest beer market in the country, for three months during the peak season.
The retail value of beer that UBL sold in 2009-10 was approximately Rs 8,200 crore. The company leads the mild and strong beer segments, with brands like Kingfisher Premium and Kingfisher Strong respectively. It has a market share of over 50 per cent.
Together, UB Group’s alcobev (pre-mixed drinks) businesses had a retail sales value of Rs 38,200 crore for 2009-10.
UBL gets Rs 100 cr from Heineken to drop all cases
United Breweries Limited (UBL), India’s largest brewery firm, has received Rs 100 crore from Heineken, a 37.5 per cent shareholder in UBL, to drop all cases against the global beer major. UBL had filed cases in the Bombay High Court to restrain Heineken from exercising management rights that were accorded to its erstwhile shareholder, UK-based Scottish & Newcastle (S&N), citing that the Dutch brewer was part of a rival firm APB India in the market.
The differences between the two escalated when Heineken and Danish firm Carlsberg bought out S&N during late 2008 in a global takeover. Mallya had contested that Heineken could not have the same rights as S&N because it (Heineken) had a rival presence in India through competition. Heineken during the end of 2009 decided to merge its Indian operations into UBL, the result of which UBL dropped all cases as settlement.
Under the terms of the new shareholders agreement, UBL will bottle and distribute the Heineken brand in India, while UBL will use Heineken’s global network to spread Kingfisher beer globally.
