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Boby Kurian

Bangalore , Sept. 2

THE drinks major, Shaw Wallace & Co Ltd (SWC), may go in for doubling of capacity at Pampasar distillery in Karnataka. The spirits marketer has also forged a new contract bottling arrangement for the Indian made foreign liquor (IMFL) business in the State.

Reliable company sources said Pampasar's monthly capacity would be expanded from the existing 75,000 cases to almost 1,50,000 cases. This comes in the wake of the recent opening up of the State liquor market following the Government decision to set up a corporation aimed at cleaning up trade practices and improving sales through the official channels.

The setting up of Karnataka State Beverages Corporation Ltd (KSBCL) and the subsequent Government move to slash excise duties have seen the volume of official IMFL sales surge from about 18 lakh litres to 54 lakh litres in July and roughly 65 lakh litres in August.

In the medium term, KSBCL's volume is expected to stabilise at about 75 lakh litres even though the industry estimates on Karnataka's IMFL consumption is pegged at nearly 90 lakh litres.

Besides expanding capacity at Pampasar, Shaw Wallace has also entered into a contract bottling arrangement with Anugraha distillery in Davangere. This is expected to further bolster the company's supply position in Karnataka where it lags behind rivals such as UB and Khodays.

Meanwhile, Shaw Wallace, after prolonged parleys with various interested parties, has decided against handing over distribution of its products in Karnataka to a third party.

"Yes in Karnataka we have decided to go alone," the company officials said in response to a query.

It must be mentioned that the company had initiated talks with Mr Ramesh Vangal, the former head of Seagram in India, to handover distribution of its liquor business in the State.

For Mr Vangal, it was one of the routes identified to return to IMFL business after selling his stake in Seagram to Pernod Ricard.

Shaw Wallace had also mulled handing over distribution to its long-standing ally and bottler, Mr Harminder Singh Bagga, who already handles distribution of the company's products in neighbouring Andhra Pradesh.

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