Scotland

Indian drinks group 'to exceed Diageo'

The Indian billionaire who owns Whyte and Mackay says sales by his United Breweries Group have outstripped those of global leader Diageo.

Vijay Mallya said he wanted to change the direction of his Scotch whisky distiller, building its bottled brands instead of focussing on bulk sales.

And he has spoken out against reductions in 150% tariffs on Scotch whisky entering the Indian market.

Dr Mallya told BBC Scotland his sales figures will be public in two months.

He said he expected them to exceed those of Diageo, the London-based global leader in the spirits industry.

"That is by selling 90% in one country, whereas Diageo sells in over 100 countries," he said.

"That shows you the scale of opportunity in India.

"But sitting in India, we'll look at Asia Pacific and clearly the fastest growing region in the world.

"I'm not overly excited about being in the mature western markets with single digit growth.

"I would rather focus my energies where I could look forward to robust double digit growth."

Dr Mallya, who inherited the chairman's seat at United Breweries 28 years ago when he was 27, set out his strategy for capturing the buying power of India's fast-growing middle class.

He has around 60% of the country's spirits market, and nearly half of its beer market, led by his Kingfisher brand.

That brand is also on his airline. And while his conglomerate owns chemicals and tourism businesses, he has invested heavily in the Bangalore franchise of cricket's Indian Premier League.

He is also owner of Force India Formula 1 team, saying it can realistically aim for podium finishes within two years.

Meanwhile, winning the the first Indian Grand Prix, in Delhi later this year, remains a dream.

He said his sports interests are for tapping into young markets in India, where there is "no bubble", but sustainable economic growth.

'Fierce opposition'

Dr Mallya's UB Group bought Whyte and Mackay, fourth biggest distiller of Scotch whisky, in 2007, paying £595m.

In the interview, he insisted this was a good price, and was necessary because his competitors were restricting supply of Scotch for his blended products in India.

He said the tariffs on entry of European spirits, including Scotch, into the Indian market should only come down "if there is a level playing field".

After more than three years of work on a free trade agreement between India and the European Union, the two sides have set spring of this year as a target date for resolving outstanding issues, and the high tariff on Scotch whisky is a major one.

Dr Mallya wants Indians to be able to describe their exported spirit as whisky, which he says is being blocked in Europe.

"There's fierce opposition to that.

"If you want India to lower tariffs and facilitate more free trade, then I think Indian producers also have a right to enter the European market".

The interview with Vijay Mallya can be heard on BBC Radio Scotland's 'Business Scotland' programme on Sunday 23 January at 1000 GMT, along with a response from Gavin Hewitt, chief executive of the Scotch Whisky Association. Business Scotland is available by podcast.

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