Vijay Mallya’s acquisition of Whyte & Mackay, the fourth-largest Scotch whisky producer in the world, marks a personal milestone which plays in with some key emerging realities in India today. Mr Mallya’s United Spirits, the third-largest spirits group in the world, acquires both a global footprint and a quality label. These are key requirements for success in a globalising world where achieving national pre-eminence has to be seen as a stepping stone and not an end in itself. United Spirits will now be in a position to fight better on both the volume and premium fronts. On the former, it will get to improve its already dominant position in one of the two important emerging economies in the world. On the latter, the acquisition will give the group an insider’s position in the world of Scotch whisky, some global quality brands with which to seek a foothold in Russia and China, and a large stock of aged Scotch whisky which can be blended to serve up premium whisky in India to quench a thirst that shows every sign of being difficult to satisfy.
By consolidating the group’s pre-eminence in the Indian spirits market, heralded by the earlier acquisition of Shaw Wallace, the latest takeover will improve group cash flow, needed to make a success of Kingfisher Airlines. This is burning a lot of cash and will continue to do so for some time to come. But it also represents an opportunity, because Mr Mallya is building his airline business in a credible way. He is aiming for the premium slot and has been able to display both panache (Kingfisher must be one of the youngest airlines in the world to order the A380, the largest jet airliner made till now) and marketing savvy (bringing the plane to India and taking it round Delhi and Mumbai with much fanfare). With cash to spend and the gumption to do so properly, Mr Mallya can expect to make a bid for the top slot in Indian commercial air travel.
All this makes the last week a personal milestone for Mr Mallya. He was born with a platinum spoon in his mouth but had to pay a bit in trying out his hand at various options in business diversification. Thereafter he refocused on strengthening core competencies, like beefing up the spirits business and making an unqualified success of the brewing business. While bagging Shaw Wallace did the former, building up Kingfisher as both a volume and quality beer brand did the latter. Kingfisher Airlines marks a major diversification. The UB group was built with solid foundations by Mr Mallya’s very low-key father; it is now being taken places by a flashy son, possibly with the speed of a Formula One car.
Mr Good Times
Business Standard / New Delhi May 21, 2007, 23:17 IST
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