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Boby Kurian

Bangalore , Feb. 3

UB Spirits' Gold Riband whisky is set to emerge as the latest `millionaire' brand in the division's frontline Indian Made Foreign Liquor (IMFL) portfolio by the end of the current financial year.

"We hope Gold Riband will touch a million cases by the end of the year," Mr Vijay Rekhi, President of the spirits division, told Business Line. He said the performance of the brand was in tune with the "increased velocity" of the other frontline brands, which have added 3.5 million cases in the first nine-month period of the financial year. This has eased pressure on profitability on account of significant cost push, negating any impact on sales even though it discontinued a host of cheap brands as it turned unviable.

UB Spirits Division, the world's fourth largest spirits marketer by volume, comprises McDowell & Co Ltd and Herbertsons Ltd. It sold over 35 million cases in 2003-04, but is unlikely to meet this year's internal target of 40 million cases as it dropped a few secondline brands to address profitability concerns with the cost of raw materials such as molasses and rectified spirit more than doubling in the past one year.

Mr Rekhi said the division has lost volume sales of over two million cases till date in the ongoing financial year as it discontinued economy labels such as Kerala Malt whisky, Vin Malt whisky and Majestic whisky.

"The focus within the organisation is on maximising our revenues because of the spike in cost. We have been pushing volumes of the frontline brands on a systematic and war-footing basis," Mr Rekhi said.

"The main brands increased their velocity in the market as they were helped by consistent investments in brand equity," he added.

For instance, Signature whisky, which attracted investments disproportionate to sales, grew 53 per cent in the nine months and increased its share in the premium whisky segment to 30 per cent.

The regular priced Gold Riband has sizeable market share in Andhra Pradesh and in the eastern States. The division has worked on turning around the brand, which has been considered a laggard for a long while, in the last few years. It is expected to join other `millionaire' brands such as Bagpiper, No.1 McDowell, Blue Riband Gin Series, Honey Bee brandy and No.1 McDowell Celebration rum.

Scouting for partner to make retail foray

UB's plans to foray into the retail trade of spirits business is still under consideration.

"We wanted to enter into the liquor retailing business in one identified State in North India during the last calendar year, but it did not happen. We are looking for a partner who is adept in handling grassroot environment," Mr A.K. Ravi Nedungadi, President & Chief Financial Officer, UB Group, said.

He, however, declined to name the State where UB intended to enter retail trade. "We want to do it with an element of surprise," he added. The UB Group Chairman, Mr Vijay Mallya, had told Business Line in September 2003, that he was being forced to enter spirits retailing as it would bring significant upside to his business.

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