The stage is set for a spirited battle between liquor makers Allied Blenders and Distillers (ABD) and Tilaknagar Industries to capture a larger footprint in the four southern States, which account for 98 per cent of the total brandy sales in India. The stakes are high, with both parties slugging it out to gain mastery over the $1-billion club.

At present, Kishore Chhabria-led ABD has a small presence in the brandy category, with its premium product Kyron and semi-premium Lord & Master.

Tilaknagar, on the other hand, holds a dominant position in the premium brandy space. Its Mansion House French brandy, the second highest selling domestic brand in the segment, has annual sales of more than 1 million 9-litre cases, while the Courrier Napoleon series of Red, Blue and Green are set to join the millionaire club.

Mansion House is owned by Dutch spirits company Herman Jansen Beverages Nederland, but in India, Tilaknagar is selling the brand. Recently, ABD had acquired 50 per cent ownership rights in two brands — Mansion House and Savoy Club — from Herman Jansen.

Deepak Roy, Vice-Chairman, ABD, told BusinessLine the deal with Herman Jansen was aimed at gaining a significant foothold in the brandy market.

Though brandy as a segment remains a Tilaknagar forte, Chairman Amit Dahanukar said the focus would now be on enhancing sales in the whisky segment, in the semi-premium and premium category, to drive up value.

Growth dynamics

Estimated at 75 million cases, brandy is the second largest category contributing to 25 per cent of the Indian made foreign liquor industry, and has been one of the fastest growing categories over the last few years.

While ABD plans to “consolidate and further strengthen its market share in the brandy segment, especially in the south”, Tilaknagar has been witnessing a few bumps.

Last year, volumes were affected by supply-side constraints in Tamil Nadu. The bifurcation of Andhra Pradesh had also hit sales.

“Volumes are now normalising in Andhra Pradesh and Telangana, which continue to be high growth markets,” Dahanukar said.

Tilaknagar's Mansion House reportedly has a share of 39 percent in the premium brandy segment. The company sold 8.8 million cases of brandy in FY14, which contributed around 55 per cent to its revenue of ₹806 crore.

On the other hand, ABD has been recording a compounded annual growth rate of 20 per cent over the past five years, the company said.

South focus

In FY-14, it achieved landmark sales of 25 million cases, recording a 24 per cent growth over the previous fiscal. Growth was led by flagship brand Officer's Choice Whisky, which grew 14 percent.

While competition heats up, brandy is not the only segment these companies eye for dominance. This April, Tilaknagar’s prestige brand White House XXX Rum joined the millionaire club. Pitted against market leader Diageo’s McDowell Celebration Rum, it was introduced in the market in March 2012, and is present in the southern and eastern regions.

Growing at 110 per cent year on year, White House has a market share of 48 per cent, beating McDowell Celebration Rum in Kerala, according to the company.

Kerala consumes 30 per cent of the rum consumed in India.

Having consolidated in brandies, Tilaknagar's foray into rum has seen a quantum growth. Just four years ago, the company sold less than 1 million cases, while last year, it saw sales of 4 million cases.

Tilaknagar already has two millionaire brands, Madiraa XXX Rum and TI White House XXX Rum.

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