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MNCs' local brands threaten UB monopoly

For the first time in a decade, a made-in-India whisky brand has sold 100,000 cases within 100 days of launch.

, TNN|
Aug 04, 2007, 03.51 AM IST
MUMBAI: For the first time in a decade, a made-in-India whisky brand has sold 100,000 cases within 100 days of launch. Global major Diageo, which authored this success with the launch of Masterstroke Whisky, has also changed the rules of Indian spirit market, often touted to be growing into the world’s largest whisky market. Industry viewers see this as just the beginning of a trend in which global majors could launch local brands to challenge the leader, the UB group.

Masterstroke, the first brand of Diageo Radico-Khaitan, a joint venture company with Radico Khaitan, turns out to be the only brand that made such an instant success after the latter’s 8 PM whisky, which sold a million cases in its first year, 10 years ago.

The instant success of a local brand launched by a multinational partnership is keenly watched by global majors planning to make it big in the Indian Made Foreign Liquor (IMFL) market currently dominated by the Vijay Mallya-led UB group that controls nearly 60% of the 115 million cases market.

A prohibitive import tariff ranging from 250% to 400% forms a bleak backdrop. And now, Masterstroke whisky may have shown the way out for all who yearn for a toast in the Indian spirit market-produce in India and sell in India.

Industry observers believe the market will soon be flooded by similar local brands from other global majors who have been operating in India for years without significant gains. This could be a more effective strategy to woo the Indian market than waiting eternally for a lower tariff regime.

For Diageo, this is turning the clock backwards. It had earlier made a success of a locally made brand, Gilbey’s Green Label, with sales bordering three million cases by 2003. But then, Diageo turned its focus on global brands and decided to get out of local brands business.

Following this, Gilbey’s was sold for Rs 60 crore to UB group. Now, after four years of that sell off, the new Indian management of Diageo headed by managing director Asif Adil, is betting again on Indian brands. Masterstroke Whisky is the outcome of this new policy.

Masterstroke, a whisky branded semi-premium, has also prompted a plan by the JV company to flood the Indian market with similar products, using technical skills of Diageo and the pan-Indian distribution network of Radico Khaitan, the No. 2 in the IMFL market. Diageo-Radico CEO Raju Vaziraney, told ET: “We are selling it as a premium whisky available at semi-premium price. And this image worked for us”.
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