Billionaire on the rocks: flamboyant tycoon Vijay Mallya loses out in India's whisky war

 

Delhi

Few of the customers who scramble to be served at Vijay Sharma's humble off-licence would describe themselves as whisky connoisseurs.

Not for them the likes of Johnny Walker or other Scotches long associated with the Indian elite, but rather cheap and raw-tasting alcohol gulped down as dusk turns to night. "I have been drinking for 20 years," said Nazir Khan, a hawker who paid 30 rupees (35p) for a quarter bottle of hooch. "I do this every day."

It is customers like Mr Khan and off-licences such as the one managed by Mr Sharma that are the centre of a "whisky war" that is gripping India. Figures collated by the London-based International Wine & Spirit Research (IWSR) suggest that, for the first time in seven years, Bagpiper whisky has lost its title as the world's best-selling whisky to a recent upstart, Officer's Choice. While Bagpiper sold 16 million cases in 2011, sales of Officer's Choice reached 16.5 million cases.

What has given the rivalry all the more edge is the personalities involved. Bagpiper is produced by the United Breweries Group headed by Vijay Mallya, a flamboyant, yacht-owning tycoon who has long made his wealth through beer and liquor but whose Kingfisher airline is currently struggling.

The rival Officer's Choice is produced by Allied Blenders and Distillers (ABD), owned by Kishore Chhabria, a long-time rival who has been involved in legal battles with Mr Mallya for the best part of two decades. In a further twist, the current chief executive of ABD and the man credited with developing Officer's Choice, is Deepak Roy, a former friend and associate of Mr Mallya who switched from UB to ABD five years ago when he was passed over for a top job. "[Mallya] was born with a golden spoon with several brands he inherited, whereas I had nothing, except the values instilled by my father," Mr Chhabria recently told The Economic Times newspaper.

Mr Mallya, an independent member of the upper house of India's parliament, is also the owner of a cricket franchise and co-owner of the Force India Formula One team. His company has questioned the IWSR's figures.

Prakash Mirpuri, vice-president of corporate communications for UB Group, claimed its McDowell's No 1 whisky, which consists of three different labels, was the world's largest-selling brand, accounting for 16.8 million cases sold last year. "The perspective is a half truth," he said of reports that Officer's Choice was No 1.

The market for whiskies in India is massive. A total of 160 million cases were sold last year, of which more than 90 per cent was Indian-made whisky. A tiny amount of this, such as Amrut Single Malt, is world-class but the vast majority is produced from molasses and tastes like cheap rum. A recent sampling by The Independent of both Bagpiper and Officer's Choice could discern little difference between the two – both burned the throat.

Yet reports suggest that ABD has become successful by increasingly marketing Officer's Choice as a more upscale choice, even though a quarter bottle sells for just 55 rupees. Mr Roy introduced new packaging and the advertising line: "Awaken the officer in you." Mr Roy said beating Bagpiper gave him great satisfaction but that it had "nothing to do with a vendetta or teaching Mallya a lesson".

Deciding to stoke aspirations even at the bottom of the market makes sense, as a visit to Mr Sharma's off-licence in south Delhi revealed. Mr Sharma, himself teetotal, said purchasers of Bagpiper and Officer's Choice were "middle class", while individuals such as Nazir Khan, the hawker who bought a plastic bottle of Seven Knights whisky, was very poor. Harish Singh, who works in marketing, said he believed the most popular brand was Royal Stag, which costs 85 rupees a quarter. He said: "It is prestigious."

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