The Hindu Business Line : Allied Blenders plans to tap premium segment of rum & wines

Mumbai, June 25 Putting its history of litigation behind it, the Kishore Chabbria promoted Allied Blenders and Distillers is planning an IPO along with an image makeover for itself. Besides the Rs 450-crore spirits company would be investing behind building brands and entering new categories such as rum and wines in the future.

Mr Deepak Roy, Executive Vice-Chairman and Chief Executive Officer, Allied Blenders and Distillers told Business Line, “In the next three years, we plan to go for a public issue but before that we would be expanding our portfolio with premium brands along with a complete image makeover for the company.”

Considering the spirits company has earmarked an investment of Rs 25 crore for each new brand that it introduces, generation of funds will be an ongoing exercise and there are chances of the company divesting 40 per cent of its shareholding to the public. As Mr Roy says, “At the moment we are generating funds through internal accruals but at the right time 40 per cent of the company would go to the public. The company would be requiring additional funds as we launch new products. An investment of Rs 25 crore is required every time a new brand is introduced in the market.”

Currently Mr Roy has a 5 per cent stake in the company while the balance is held by Mr Kishore Chabbria, its main promoter who has been involved with a series of litigation cases against the company in the past.

Focus segment

With a focus on the premium segment of the spirits market, the company has recently forged a 50:50 joint venture between Henkell & Sohnlein Sektkellereien KG Wiesbaden of Germany, to bring the Wodka Gorbatschow brand of German vodka into the country. After vodka, there are chances of introducing a sparkling wine under the brand of Henkel Troken from the German company.

“There is no other brand except Smirnoff in the premium vodka segment today. Vodka is growing at 30 per cent selling 7.5 lakh cases annually,” says Mr Roy, having launched Smirnoff in the country in 1993 when he was with Diageo. Besides, the company is also working on introducing premium rum to take on the monopoly of Bacardi premium dark rum in the segment. “Rum is small in volume but is growing between 14-15 per cent. Premium rum is the next segment we would be in after Vodka. The purpose is to be in segments which are profitable and the intensity of competitive is less,” states Mr Roy.

With the intention of lessening its dependence on its flagship brand of Officer’s Choice regular whisky, Allied Blenders and Distillers is now poised to grow its expand its portfolio with a set of premium branded spirits to reach a turnover of Rs 800 crore in the next three years.

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Allied Blenders plans to tap premium segment of rum & wines