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Vijay Mallya to find global partner for UB

Ranvir Nayar

Indian liquor baron Vijay Mallya is in advanced stage of negotiations with some of the world's leading companies to find a global partner for his United Breweries before the year end.

UB, India's largest brewer, has been scouting for a global partner to take a significant stake in the company.

Mallya said, "We are looking for a strategic global partner for our brewery, especially with overseas distribution muscle."

UB is the world's sixth largest brewer with sales of 26 million cases in India, the Middle East and Europe. The company has ambitious plans for developing KingFisher, India's leading beer brand, outside the country.

The beer is already doing well in Britain. Mallya has now set his sights on continental Europe.

"We have already made significant inroads in France and Scandinavia, our fastest growing markets."

It is here that UB needs help gain access to an established distribution network that will ensure KingFisher is able to move into European markets very quickly and has a presence in bars and shops.

Mallya said the UB will offer a 26 percent stake to the partner, but will not give up control over management. It will be a deal between equals.

"They bring over distribution overseas and cash and I bring 50 percent of the lucrative Indian market to the table. There is no question of handing over the control to the strategic partner.

"We have some very serious expressions of interests by some of the global giants and I am sure we will clinch a deal by the end of the year."

He said, "KingFisher was already a recognised brand overseas, one of the few Indian brands that is known outside the country. We hope to back it up with a strong distribution network to reach out to our potential consumers."

For the moment, though, Mallya is staying away from Germany, the biggest beer market in Europe, with a per capita consumption of 125 litres per year.

Mallya said the market was too difficult to penetrate due to the proliferation of thousands of small, local breweries.

"Often, each village has its own brewery. In the absence of a few major brands that have access to most of the market, it becomes difficult for overseas brands to penetrate such markets," he said.

Indo-Asian News Service

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