|
|
             |
SPLIT On The Rocks With restrictions on liquor import set to go, DCM's foreign partners see more sense in going solo. By Jaya Basu
Two-thirds of it is. The company - a joint venture between DCM, Scotland's Highland Distillers, and France's Remy, represented by its Mauritian subsidiary, HRI - is on the verge of a three-way split. Highland has already set up a liaison office in Gurgaon, and Remy is taking a re-look at its India plans. DCM-Remy's Joint Managing Director, Anil Gujral, 53, denies the move. But Dinesh Jain, 38, Managing Director of Highland Distillers (India) and a former DCM-Remy executive, notes: ''Both the foreign partners have no interest left in the joint venture in terms of brands.'' The hiccups. Of the three, the Indian partner-represented by managing director Tilak Dhar of the DCM family-stands to lose the most. Except for a distillery at Daurala and a stake in the bottling plant owned by the three partners, DCM brings little to the JV. Its three brands-Bon King (a dark rum), Mayfair (gin), and Chancellor Whiskey-sell in the low-end of the market. It also has the licence to bottle Highland's Black Bottle scotch. But, with Highland withdrawing, DCM seems reluctant to bear the marketing and distribution costs. Admits a senior company official: ''It is virtually impossible for DCM to run the plant on its own strengths. It will make more losses than profits if it did.'' DCM is scouting for new foreign partners, although none has been finalised. A big reason why global players want to go their own way is the low sales volume. Last fiscal, just 30,000 cases of Remy and Highland brands were sold. Points out N.K. Lamba, 40, Vice-President (Sales), DCM-Remy: ''The low volumes do not justify the local production costs.'' Open sesame. By April next year, the imported brands will cost even less. Not only are the quantitative restrictions on imports set to go, but the import tariff on liquor is also expected to be lowered from 222.4 per cent to 150 per cent. Highland has four brands of scotch in India, including Grouse, Macallan, Highland Park, and Bunnahabhain. For the moment, though, it wants to confine itself to duty-free shops. Says Jain: ''We'll wait for import restrictions to be removed before going national.'' Remy, on the other hand, has a complement of more than 20 brands world-wide, although in India it is virtually dry. Passoa (a fruit-based alcoholic drink) and Cointreau (a liqueur) have gone out of its bag following Remy's recent break-up with Cointreau Worldwide, which owns both the brands. The third, Tres Magueyes Tequila, ran into problems soon after its launch because of a sharp rise in the price of imported tequila concentrate. And now, the worldwide marketing and distribution rights of tequila have been transferred from Remy to Seagram by the family that owns these brands. Says an industry observer: ''The foreign players' dry spell is going to end soon.'' Now, that's something transnationals like Remy and Highland would want to drink to. |
|
Issue Contents Write to us Subscriptions Syndication INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY © Living Media India Ltd |
 |
 |
DCM-Remy's
second-floor office in the heart of New Delhi was never a corporate hive.
But these days, the four-year-old outfit wears a near-desolate look.
Randomly-stacked whiskey cartons crowd its narrow lobby, and the dated
magazines on the glass table could well have been leftovers from a lot
used for stuffing cartons. Is DCM-Remy moving?