Liquor clean-up act hope

New Delhi, Dec. 2: Liquor giant Diageo's arrival will streamline the production and distribution aspects of the business and make them more transparent, a rival has said.

"We welcome Diageo's step to buy stake in USL (Vijay Mallya's United Spirits Ltd) as there is a need for major multinationals to come to India. These companies will bring in the much-needed transparency in the sector. It will also help put an end to unscrupulous and under-the-table deals which have adversely affected the liquor industry," said Deepak Roy, vice-chairman and chief executive officer of Allied Blenders and Distillers.

The company's signature brand Officer's Choice is the world's largest selling whisky.

British spirits maker Diageo Plc has recently acquired a controlling 53.4 per cent in United Spirits.

According to insiders in the liquor industry, black money incentives are often offered to state-wide distributors to help push a particular brand. Many cite the example of Uttar Pradesh where a few specific brands were promoted, while the sale of others were blocked, a practice that allegedly spawned the slain liquor baron Ponty Chadha's vast empire in the state.

Global liquor firms do not offer such incentives. They follow stricter financial accounting norms and have stringent internal company regulations.

Allied Blenders' Officer's Choice toppled UB Group's McDowell's as the world's largest selling whisky brand in July this year. The company plans to add two brands of brandy and a line of premium whiskies and vodka in the next five years to its portfolio. The world's No. 2 whisky brand is Diageo's Johnnie Walker, which sells 16.68 million cases annually.

Roy said the company expected over 15 per cent rise in sales volume at 20.5 million cases in the ongoing fiscal. The Kishore Chhabria-promoted liquor firm had sold 17.75 million cases of various brands across the country last year.

"We are aiming to sell around 20.5 million cases in the current fiscal," Roy said at the launch of a semi-premium whisky brand Officer's Choice Blue in Delhi recently. He said the company planned to double its sales to 40 million cases in the next five years.

Allied Blenders, a market leader in Bengal, is planning to increase its network and sales in the state.

"We are the most famous brand in Bengal and we will make efforts to increase our sales further," said Roy. In the last six months, the company has already launched the Officer's Choice Blue brand in various markets, including Assam, Bengal, Maharashtra and Punjab.

"In the last six months the brand has already sold 6 lakh cases in these markets and we expect it to sell around 1.2 million cases by the end of the current fiscal," Roy said.

"We will launch more brands in the youth segment as well as premium brands which will cater to the higher income group," said Roy.

Besides Officer's Choice whisky, the company's other brands include Class 21 Vodka, Jolly Roger premium rum and Kyron premium brandy. ABD has manufacturing and bottling bases at 37 locations in 19 states.