Allied Blenders to Launch Premium Whisky by December

Largest domestic liquor maker Allied Blenders & Distillers (ABD), promoted by Kishore Chhabria of the Shaw Wallace fame, will be entering the premium whisky market by December.

"We hope to launch our first premium whisky brand by this December. The proposed product will have an entirely new brand name and brand positioning. We are done with the OC (Officer's Choice) brand extension and the new brand will really be a premium as we already have a semi-premium whisky in Officer's Choice Black," vice-chairman and chief executive Deepak Roy told PTI in an interaction.

Explaining the rationale for entering the premium segment, he said, "While we have a premium brandy in Kyron, and a semi-premium whisky OC Black, we have been missing a premium brand."

"This is a calculated move as the industry has been on a premiumisation drive for some time now. Moreover, the margin is much high in this segment and this will complement our existing bouquet of brands."

Earlier this year, ABD had entered the semi-premium whisky segment with the launch of Officer's Choice Black.

"This is the last brand extension for OC," Mr Roy added.

ABD has achieved record sales last fiscal year for its flagship brand Officer's Choice whiskey, which is in the mass market, by selling a record 25 million cases, clocking a growth rate of 14 per cent over the previous fiscal. OC is the largest selling regular whisky with 32 per cent market share.

Also, ABD already has a premium brandy brand under the label of Kyron, launched 20 months ago, and grew 20 per cent in Andhra and Kerala respectively.

ABD grew 24 per cent in FY14 in volume, while industry grew at a paltry 2 per cent. The company has been recording a CAGR of 20 per cent over the past five years, Mr Roy said, adding the journey from 5 million cases to 25 million cases in six years is a "testament to the strength" of their brands.

ABD already has a slew of semi-premium brands such as the Officer's Choice Blue, which crossed 3.5 million cases sales last fiscal year, clipping at 156 percent whereas the semi-premium whisky segment by 19 per cent over FY14 since its launch just two years ago.

After the success of OC whisky (mass) and OC Blue (semi-premium), ABD recently launched OC Black whisky (semi- premium-plus) in Bengal and Delhi and a nation-wide launch is underway.

ABD is present in most of spirits categories - whiskies, rums, vodkas and brandies - with a slew of brands

such as the Jolly Roger Rum, Lord & Master Brandy, Class 21 Vodka and Wodka Gorbatschow apart from the flagship OC brands. Mr Roy had recently told PTI that ABD was planning to divest up to 12 per cent of its stake to two overseas PE players - TPG and Carlyle Capital - for about $250 million to fund its expansion and inorganic growth plans. It has lined up Rs 450-500 crore capex this fiscal year.

He had also reiterated ABD's intention of pursuing its talks with Tilaknagar Industries, despite talks being stuck on valuation.

"We are keen to buy Tilaknagar Industries, the makers of the Mansion House brandy, but they are demanding an exorbitant price, which we are not ready to accept. But I want to reiterate that we are still keen on the takeover and not a minority stake in that company," he said.

Mansion House is equally owned by ABD and the Dutch liquor maker Herman Jansen. Tilaknagar bought 50 per cent local sales rights from the Dutch owner last October.