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K. Giriprakash

Bangalore, Aug. 19 The UB Group has called off its ties with the New Zealand-based liquor company, Independent Liquor with which it had planned to launch several ready-to-drink products in India.

Confirming the development, an official spokesperson for the UB Group told Business Line that the group has also decided not to focus any longer on the ready-to-drink (RTDs) product segment. The spokesperson did not say when the four-year-old tie-up was called off.

Interestingly, there were reports earlier that the UB Group had, in fact, bid for the $250-million Independent Liquor, though there was no confirmation from either side. However, a group of private equity investors is learnt to have bought the New Zealand-based company sometime ago.

Sources close to the UB Group said that one of the reasons for its decision not to go ahead with the launch of RTDs could be that it did not see much value in launching these products in the country. According to analysts tracking the liquor industry, for a ready-to-drink product to be successful, it needs to be sold along with other FMCG brands in retail outlets and needs to be backed with high-profile advertisements.

As there are curbs on sale of liquor products in the country, it must have led the company not to focus on this segment any longer.

McDowell & Co Ltd had entered into a strategic tie-up with Independent Liquor in 2003. As per the tie-up, Independent Liquor was expected to help McDowells with knowledge transfer in the high-growth segment of RTD, while McDowells, in return, was expected to launch some of the leading brands of the New Zealand-based company in the Indian market.

McDowells also wanted to increase the manufacturing capacity of RTDs in some of its existing distilleries and had an exclusive unit in Goa. It had launched Romanov Shotz, a vodka-based beverage sometime ago. Another exclusive manufacturing plant was expected to be launched in Chandigarh with a capacity of two lakh cases per month.

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