Dubai crisis not a downer, say spirit cos

MUMBAI: Indian spirit companies, who export Indian Made Foreign Liquor (IMFL) brands to Dubai, are not overtly worried over the brewing financial crisis in Dubai. Most of them do not foresee demand dwindling in the forseeable future. This is on account of the fact that most exports to Dubai are later sent to other destinations like Africa.

The IMFL exports to Dubai is around four million cases a year. In value terms, this is worth Rs 700 crore.

Out of this, the UB Group — the largest spirit company in India — accounts for over 1.5 million cases. In India, the company sells over 100 million cases of spirit brands each year. The company’s whisky brands like Bagpiper and McDowell No.1 enjoy high levels of patronage amongst the working-class. “There is no reason to believe our exports to Dubai will be affected by the current financial crisis,” said Vijay Mallya, chairman of UB group.

Kishore Chhabria, who heads ABD — the company that manufactures Officer’s Choice whisky and is the third-largest spirit company in India, said thought an impact would, at best, be marginal. “Our exports to Dubai may decline by just 2-3%. At the same time, sales in other parts of the UAE are on the rise,” he said. ABD, which sells over 11 million cases of Officer’s Choice each year, exports close to one million cases to Dubai. Like UB, a major part of this finds its way to countries in Africa.



Interestingly, there are companies that are viewing the development in Dubai, as a business opportunity. Pratap Talwar, who owns Mumbai-based Amber Distilleries, is now thinking of setting up an office in Dubai, since it would entail lower costs. A large part of Amber’s turnover comes from exports to Dubai; it exports over 35,000 cases of whiskies, brandies and vodka each year. “Dubai will continue to be a hub for IMFL exports,” he added. Another reason for the optimism of the Indian spirit companies comes from a trend of sales taking off during a slowdown.

Meanwhile, Ravi Jain, director of Valle De Vin — a Nashik-based wine company, said: “It is too early to say anything about the exports of Indian wine to Dubai. Wine exports to Dubai is a small quantity anyway.”

Industry trackers pointed out that liquor consumption at home increases, instead of it being consumed in restaurants or bars. “There could be a shift from a premium brand to a less premium brand, though consumption overall does increase,” said an industry official.