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Radico shops for brands

New Delhi, Sept. 14: Radico Khaitan Ltd (RKL) is on a brand acquisition drive. Apart from being a contender for UDV’s Gilbey’s Green label which is on the block, it is in talks with regional brands that are popular in eastern and western India.

RKL executive director Abhishek Khaitan said the company has a very low debt equity ratio of 0.3:1 and therefore funds will not be a problem for acquisitions. He refused to comment on the acquisition of Gilbey’s Green label, since the bidding process is still on.

However, industry sources say Radico is either bidding directly or it is being done by Whyte Hall (India) Ltd, a joint venture with Bacardi International.

On acquiring regional brands, Khaitan said, “We want to acquire whisky, rum and brandy brands in eastern India, while in western India we are looking forward to acquire whisky brands only. In the last one year, the company has acquired Whitefield whisky and brandy from the Nirayu distillers and Black Cat rum brand from Sikkim distillery.”

“We want to get into every segment of the liquor spectrum either by acquisitions or through product launches,” said Khaitan. It recently launched ‘Special Appointment’ whisky in the semi-premium segment (the segment hovers between Rs 250-300 for a 750 ml bottle).

The 8 PM brand, which falls in the upper regular segment (between Rs 180 and 200) has UDV’s Gilbey’s Green Label as its main rival. “8 PM is expected to sell 2.5 million cases in the current fiscal,” said Khaitan.

RKL is also in the process of increasing its alcohol production capacity at its Rampur distillery from 45 million litres to 55 million litres at a cost of Rs 17 crore, said Khaitan. The cost will include quality upgradation of alcohol.

RKL has earmarked a budget of about Rs 30 crore for marketing of its various brands in the current fiscal year. The company posted a net profit of Rs 15.4 crore on a turnover of Rs 615 crore in the last fiscal.

RKL has also recently entered into a tie up for importing and marketing brands of French wine maker Listel in India and the first consignment of thousand cases has arrived. The company already has a tieup with Ernst & Julio Gallo of California for distributing their wines in India.

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