Financial Daily from THE HINDU group of publications
Saturday, Mar 19, 2005
Financial Daily from THE HINDU group of publications Saturday, Mar 19, 2005 |
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Marketing
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Strategy Bagga family seals deal with Khodays — To handle spirit brands for 18 years Boby Kurian
Bangalore , March 18 THE Hyderabad-based cash rich liquor distributor, Mr Harminder Singh Bagga, and his family, has signed a memorandum of understanding with the House of Khodays giving them the rights to use the liquor assets of Khodays on an 18-year lease. Speaking to Business Line, Mr Bagga confirmed the deal, and said the company Bagga Millennium Liquor India Pvt Ltd will take up the distribution, marketing and manufacturing rights of Khodays' liquor brands. Khodays will retain manufacturing rights on home turf Karnataka, while the Baggas will have access to the bottling units of Khodays elsewhere in the country, informed sources said. The Bagga family's deal with Khodays involves an upfront payment of Rs 30 crore and royalty on every case of liquor sold, sources added. Khodays, the traditional domestic spirits powerhouse since the late 60s, owns a portfolio of popular Indian Made Foreign Liquor (IMFL) brands such as Peter Scot Whisky and Hercules Rum besides a string of 12 bottling units across the country. A host of spirits industry majors had eyed the assets of Khoadys as the promoter family remained silent for most part of the last decade, and the brands lost considerable steam in the marketplace. But none made much headway as they found deal making with Khodays was not an easy task, sources claimed. The annual depletions of the Khodays brands are pegged at around three million cases. . Mr Bagga said he would look at putting in place a professional team to run the business even as the industry sources said Mr Bagga's grip over liquor distribution could prove to be the critical factor in making the deal work.
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