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MARKETING: What does UB's acquisition of Whyte & Mackay mean for the Indian market?

It's a takeover that has set tongues wagging, creating a buzz not even seen last year when India overtook the US to become the world's largest whisky-drinking market. And why not? United Breweries's acquisition of liquor giant Whyte & Mackay promises to turn the Indian whisky market on its head.

Unlike other categories in the liquor market, whisky has many sub-categories: super premium, scotch, single malt. Of these, scotch and single malts have very little market share. Yet, these are the areas where Whyte & Mackay is strong.

According to Amrit Kiran Singh, area director (South-east Asia and Middle East), Brown-Forman, almost 90 per cent of the whisky sold in India costs less than Rs 300. "But with this deal going through, there is a chance to grow the other sub-categories."

The size of the IMFL market is pegged at around 110 million cases a year and whisky accounts for about 70 per cent of this. In this, McDowell's leads the market with a close to 45 per cent share. This market has been growing at 10 per cent a year.

One category which Singh believes might benefit, as a result of the merger, is scotch. Whyte & Mackay is believed to have huge stocks of scotch which, Singh says, can be blended by UB and sold in India at a relatively low price.

Harish Moolchandani, managing director, Beam Global, has a slightly different take. Since most of the categories are witnessing double digit growth in the whisky market, he feels "the opportunity is there for everyone to grow, especially in scotch".

The sub-category, scotch, can again be classified into two "" bottled in origin and bottled in India. While Dewars and Johnnie Walker belong to the latter group, the likes of Teachers and Seagram's 100 Pipers are in the former.

The market for scotch bottled in India stands at about 3,00,000 cases per annum and has been witnessing a growth of about 15 per cent a year.

The bottled in origin market is smaller at close to 2,00,000 cases and is growing at the rate of 6-8 per cent. In the bottled in India segment, Moolchandani claims that Teachers has a market share of close to 45 per cent, followed by 100 Pipers and Johnnie Walker.

Single malt is an emerging category in India and it remains to be seen how UB rolls out Whyte & Mackay's popular single malts like Dalmore and Isle of Jura.

"At the end of the day it all depends on how Mallya markets the new products that will come in after the acquisition," says Singh.