Bacardi mulls entry into Indian whisky market  ( December '29,2000, HBL)

BACARDI-MARTINI India Ltd (BMIL) is eagerly awaiting a thrust into the whisky segment of the Indian Made Foreign Liquor (IMFL) market. The company's top brass is beset by a sense of urgency as its hopes to capture Seagram's local business fell through last week. ``We will press all buttons and try to be in a volume generation mode during the next calendar year. We want to be present in the Indian whisky market. Our plans in this regard will have more clarity around February-March next year,'' highly placed company sources told Business Line.

It must be mentioned that the whisky market makes up roughly 65 per cent of the IMFL trade pegged at 68 million cases annually. BMIL, a 74:26 joint venture between Bermuda-based Bacardi and Mysore-based Gemini Distilleries, commenced operations in March 1998 with the launch of Bacardi Carta Blanca white rum, and followed it up with the introduction of Bacardi Reserva brown rum in the latter half of 1999. These two premium offerings succeeded in generating excitement, but have been slow in pushing volumes. The company's projected cumulative sales in this fiscal is estimated at 1.20 lakh cases.

Reliable sources indicated that BMIL preferred acquiring an Indian whisky brand rather than building one of its own. ``We see more merit in acquiring a brand in the prestige or regular whisky segments and developing it further,'' company officials confirmed. BMIL, during the past three years, has eyed brand acquisitions from domestic liquor companies such as Mohan Meakins, Jagajit Industries and Shaw Wallace. The company has widened the ambit of acquisition by admitting that a good buy doesn't necessarily involve dominant brands alone.

``Acquiring a brand with annual sales in the region of two or three lakh cases is good enough. We can build it into a millionaire brand. What's more important is a platform to launch ourselves into the whisky market,'' the sources added. In fact, BMIL has already restructured its operations by creating two business units to handle Bacardi brands separately from those which may come in through acquisition or marketing tie-ups. Notwithstanding its preference for acquiring whiskies, BMIL will not shut door at opportunities to grab brands in other dark spirit categories. But any brand acquisition will entail distillery buyouts as the manufacturing capacity in BMIL's plant at Nanjangud in Karnataka is likely to be used only for Bacardi's original brands.

Liquor industry analysts support BMIL's urgency for acquisitions as the joint takeover of Seagram's international business by Diageo and Pernod-Ricard, after edging out Bacardi-Martini and Brown Forman, is bound to have ripples in the Indian liquor industry. ``It will alter the power equations between liquor multinationals -- like UDV, BMIL and Pernod Ricard -- in India,'' they say. Seagram's whisky brands in India together sell over one million cases annually. Royal Stag, its dominant brand here, has fast emerged as a crucial mover in the domestic whisky market. It's now clear that this brand will move into Pernod-Ricard's stable. UDV, which is part of Diageo, has said that it's too early to talk about the impact of the Seagram deal on its Indian business.