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Pernod RicardS In. dian arm. What are your vision for your companys future.
Let us be clear about it now. Diageo and pernod Ricard are international majors.
They are ahead of us in volume and valuation, indeed. We are the largest among
the Indian companies but are not interested in number game. Bottomline is the
driving force. Otherwise we ill be making a erious mistke. The entire industry got
a shock when Pernod Ricard, the one that makes Royal Stag in India eclared a
profit which was higher than te Vijay Mallya led United Spirits. That time when it
happened USLs Bagpiper was declared by the international anal;ysts as the
largest selling whisk,y in the world. USL has long been controlling between 50 to
60 % of the market while Pernod Ricard was hardly 7 to %.
How the industry reacted reacted after the revelation?
The industry as a whole hs put in place initiatives to change gear from volume
to bottomline. A new word was created, premiumisation.They upgraded many
brands to premium level, enhancing the profit margin.
What ABD did ?
ABD has come out with premium brands, Officers Choice Blue and Officers
Choice Black both in premium segments. This is in fact a serious diverisification ,
When do you think you will be able to become the no-2. No-2 I am mentioning
because No- 1 is too far ahead of you.
Before two years we wil be catching up with Pernod Ricard.In Volumes then in
valuation. Basically by backward integration.Since we do not have distilleries of
our own we buy alcohol.We are looking for distilleries, one in each of the four
zones ie North South East and west. And we already have sufficient no of bottling
plants.And we will be introducing new brands soon besides giving a boost to the
existing brands.
How often brands succeed in liquor business?
Very often they fail One in 10 brands succeed. Even if you put all your might
behind one brand, it may fail. To establish a brand you , a premium one, you may
well have to spend about 50 cr. Still it may fail. I say it is luck?
Luck? When a brand becomes a success, all that analysis and brand and
advertisent and managerial logic are prssed into service to explain the logic of it.
But I say brand success hnges upon pure luck.I will explain to you this ay. A
director makes a movie and and it becomes a success. Then his second movies
flops at box office. You cannot explain away both. Luck is a factor.
Vijay Mallyas UB hs a many millionaire barnds. Bagpiper, Msdowell No-1,
Signature ,to say a few. They all bsucceeded becaue luck.
Mallya did not make these brands. He bought the companies which ownd thee
brands. The he polished them.
Very.
And when did both of you begin fihting.
When the Income-tax raid took place. The I-T officials found that I had bought
shares in vbiolation of the agreement we had taht nobody would attempt to
increase the shareholding in Herbertsons.
Was the agreement written or verbal
Mostly verbal.
Therfeero he thought you have breached the agreement so the differences
started.
He also breached the contract. He increased shareholding to 44 %. Mine became
51 %.