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Mallya to buy Dalmore U.S. rights for $80 Mn
By siliconindia
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Saturday, 15 December 2007, 14:48 IST
Bangalore: Vijay Mallya, Chairman, UB Group, is expected to buy the distribution rights of Dalmore Single Malt in the U.S. market for an amount of $60-80 million from American spirits giant Jim Beam, reported Economic Times.
Dalmore is a part of scotch maker Whyte & Mackay's portfolio. However, Jim Beam controls the distribution rights for the U.S. market through a licensing deal. Mallya, who acquired Whyte & Mackay earlier this year, has started talks with Jim Beam to buyback the U.S. rights.
When contacted, a top UB Group official confirmed the move. However, the valuation of the potential transaction could not be ascertained.
Dalmore is one of Whyte & Mackay's key premium brands in a portfolio that also consists of Jura Single Malt, Vladivar Vodka and namesake Whyte & Mackay blended scotch whisky.
Mallya's liquor flagship United Spirits (USL) had paid $1.18 billion to buyout Whyte & Mackay from its management led by serial entrepreneur Vivian Immerman.
However, Jim Beam, which sold Whyte & Mackay to Immerman led management in the year 2000, retained the rights for Dalmore Single Malt in the U.S. market. Sources told ET, Mallya was keen on acquiring the rights from Jim Beam citing that the latter was unable to tap the full potential of the brand owing to conflict of interest.
In context, it may be mentioned that Jim Beam owns another single malt, Laphraoig, following its part acquisition of Allied Domecq's assets in 2005. "United Spirits and Whyte & Mackay feel Jim Beam is not tapping Dalmore's fullest potential, which is very evident in its sub-premium pricing," sources added. Single Malt is a robust emerging category for the young adult consumers in the U.S.
It is believed that Jim Beam is open to divesting the distribution rights at a price, and if talks succeed, it could happen as early as January next year.
Meanwhile, United Spirits is readying Whyte & Mackay portfolio for a larger Asian roll-out. While Whyte & Mackay's entry into India is a bit delayed, the products have started tapping other key markets for scotch in the Asian region, like Taiwan, for instance. Whyte & Mackay?s focus will be on three brands like by single malts Jura and Dalmore and the eponymous blended scotch.
United Spirits is expected to register Whyte & Mackay brands with the domestic excise beginning with Maharashtra next week.