United Spirits (USL) Chairman Vijay Mallya has said the integration of global spirits major Diageo's portfolio of brands with the company will make the USL product portfolio more powerful and comprehensive.
Asked about the update on the integration process, he said, "Diageo have a wide portfolio of world-class brands, and obviously this has to be very carefully implemented in phases and that will start from early October."
"USL has embarked upon premiumisation policy with focus on premium brands where we achieved strong double-digit growth that will mitigate the cost increase implication to some extent," Mallya said after the USL Annual General Body meeting in Bangalore.
He said the consumer franchise for USL brands remain very strong and "integration of Diageo portfolio of brands will make USL product portfolio even more powerful and more comprehensive that will be a major advantage going forward."
However, Mallya said, the trading conditions for FY14 are difficult with an unprecedented increase in the price of Extra Neutral Alcohol (ENA), which has been compounded by ethanol blending programme mandated by the central government. "This advantage is being taken by sugar manufacturers."
On the unveiling of stock split plans of USL, Mallya said: "The board needs to consider it and this is not something which is going to happen in a hurry, but we shall certainly consider it".
On dropping sales of company products in Tamil Nadu, Mallya said it was largely as a result of ordering patterns of Tamil Nadu State Marketing Corporation. "Unfortunately, this is not directly related to consumer demand which remains very very strong. The consumer franchise for McDowell brand in TN is exceptionally strong and one would hope that the ordering pattern by TASMAC will reflect that," he added.
