Hindustan Lever and Johnson & Johnson (J&J) have reached an agreement under which Lever will pick up the rights to use the Savlon brandname, currently owned by J&J, for a wide variety of products.
The deal is aimed at widening the reach and brand equity of Savlon, at present marketed only as an antiseptic liquid by J&J. It is hoped that Lever, with its sprawling distribution reach through-out the country, can promote the brand better.
J&J, which launched the product initially to take on Reckitt & Colman's Dettol in the antiseptic liquid category, will continue to have the right to use the name on the liquid.
It will also continue to make and sell the brand. However, it will cede rights on using the brand name on other products.
Top sources close to the deal said an agreement has already been reached and only final formalities are to be completed.
Ammirati Puris Lintas, one of Lever's ad agencies, has already been charged with the task of chalking out a campaign for a range of products under the Savlon name.
A Hindustan Lever spokesperson refused to comment, saying it was against company policy. J&J chief Narendra Ambwani also declined comment.
Lever and J&J had been talking for some time to evolve a joint marketing arrangement for Savlon.
Initially, it was believed Lever would buy out the Savlon brand and market it while J&J would stick to production.
However, that plan fell through as Lever was not too keen on taking on an antiseptic brand and acquiring Savlon would have involved a divergence from its current portfolio of cleansing products. Lever's huge portfolio includes soaps, detergents, shampoos and toothpastes.
Besides, over the years, Savlon had built up a market among chemists, doctors and hospitals. Lever would have found it difficult to meet their demand.
On its part, Savlon has not been faring too well against Dettol. Its marketshare in the antiseptic liquid category is just over 10 per cent while Dettol is the market leader by a huge margin. The Dettol brandname has become generic to the category over the years and was not affected despite J&J's best efforts.
The deal opens a new front in Lever's battle with Reckitt & Colman. The two are already fighting in the floor scrubber category with Lever's Domex squaring off against Reckitt & Colman's Lizol. The two companies are also rivals in the mosquito repellent category, with their respective brands, Mortein and Raid, grappling for supremacy.
