The Telegraph
Friday , August 22 , 2014
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ABD seals Mansion House deal

Mumbai, Aug. 21: In a surprise move, Allied Blenders & Distillers (ABD) today acquired 50 per cent ownership rights in Dutch liquor major Herman Jansen’s brands — Mansion House and Savoy Club — for an undisclosed sum.

According to a pact between the two, ABD will have full control over the production and marketing of the Mansion House brandy in India.

The deal comes at a time Tilaknagar Industries is involved in a legal tussle with the Dutch company over the marketing rights for Mansion House.

Tilaknagar claims that it has been selling the Mansion House brand after a commercial arrangement with UTO Nederland BV, which is now Herman Jansen. However, relationship between the two had deteriorated after Herman accused Tilaknagar of breaching the terms of the agreement. Herman had taken Tilaknagar to court, which had rejected the Dutch company’s claims.

“ABD has purchased 50 per cent ownership rights on the brands Mansion House and Savoy Club from Herman Jansen Beverages. We also have 100 per cent production and marketing rights here as well as in Southeast Asia,” ABD vice-chairman and chief executive Deepak Roy said while announcing the deal in the presence of the Dutch partners.

On the claims made by Tilaknagar Industries, Roy said, “Though the matter is sub-judice, we are confident that the deal will go through. At the same time, let me also add that the court has given an interim injunction in favour of Tilaknagar. But today we have also implead ourselves in the case along with Herman Jansen, the rightful owners of the brand, as we are confident of winning the case.”

On how ABD plans to finance the deal, Roy said it would be done through internal accruals.

Explaining the rationale behind the deal, Roy said brandy is the fastest growing spirits category in the country, growing at a compounded rate of over 27 per cent in the past five years.

“From almost having a negligible market share, brandy today controls 24 per cent of the overall spirits market today. Against this, our share in the brandy market is minuscule, so we want to enter this business,” he said.

ABD has two brandies — the premium Kyron and the semi-premium Lord & Master. Both are sold in Kerala and Andhra Pradesh.