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McDowell drops whisky brands' buyout plan

K Giriprakash

McDowell and Co Ltd has dropped its plans to acquire two whisky brands and at the same time launch a new brand in its largest selling segment and right price its brand in the super-premium category.

"We could not agree on various issues and hence decided not to pursue it any further," UB Group's spirits division president, Vijay K Rekhi, said.

McDowell was planning to buy these brands to beef up its super premium and premium categories. According to industry sources, McDowell was offered two options: an outright purchase or a long-term lease and a subsequent buy-out, but difference cropped up over valuation of the brands.

The spirits division is also understood to be in talks with a distillery in Andhra Pradesh. At present, McDowell has 12 distilleries in its fold, up from 9 last year.

Rekhi said McDowell now plans to increase the reach of its super premium brand, Signature Whisky, which was 'right-priced' recently. "We plan to double the sales of Signature Whisky to around 250,000 which will increase its market share to 25 per cent within three years," Rekhi, who is also the managing director of McDowell, said.

Rekhi said McDowell's also plans to launch a whisky brand in the regular plus segment, a category, which is between prestige and regular segment.

"There is a new price point which is till now unrepresented in that segment," Rekhi said. He said, this would also increase its profitability pie.

At present, UDV's Green Label and 8 PM of Radico Khaitan are the main players in the regular plus segment. Rekhi said, "Single Malt Whisky will also be right-priced and the launch of a variant of Single Malt is being considered."

In Bombay, Single Malt is priced at Rs 475 exclusive of taxes. The variant is expected to be in the pure malt segment. While Single Malt is a distillate of malt from a single distillery, Pure Malt is a blend of malt from three to four distilleries.

Rekhi said a recent survey had rated McDowell's and Bagpiper number one in their category. "It is a great testimony to what we have accomplished," he said.

Both McDowell and Herbertsons sell a total of 25 million cases in a market size of 72 million cases. Of which a total of seven brands have a combined sale of 19.5 million cases. Both the companies put together, produce 820 million bottles (of various sizes) from 33 manufacturing locations spread across 29 states. On an average, the spirits division manufactures 2.7 million bottles per day.

"It has been a challenge to manage growth. We have a pan-India complexion backed by a strong research and technical division," Rekhi said.

In fact, McDowell has offered to Esops to 286 employees as part of its effort to encourage its employees. For sometime now, the management has initiated a series of measures to make McDowell a leaner, fitter and performance-oriented company in spite of the fact that it has regularly turned out better profits every year.

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