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Ethics in Liquor Industry

Presented by: Anjali Bhargav (6) Jinal Pethad (16) Meenu (26) Preeti Nair (36) Rushil Khanna (46) Swapna Dalvi (56)

Background
Origin of "liquor" and its close relative "liquid" was the Latin verb liquere, meaning "to be fluid Earliest reference to alcohol ( Somras & Sura) traced to year 2000B.C

Background
First Indian brewery set up (1805) in Kanpur IMFL by Carew & Co.Ltd. Excise Committee (1905) to control rise in consumption Alcohol Advertisement -Surrogative ads Industry faced criticism for targeting young people

Status Of Alcohol Industry In India


Generates Rs.16,000 crore per annum Alcohol sales proceeds account for 45%of the total revenue collection in the country
Whiskey - 60% of the liquor sales Rum- 17% brandy- 18% Vodka - 6%

Status Of Alcohol Industry In India


Duty on foreign distilleries = 464-706% Domestic industry accounts for 99% of the market share Maharashtra, Uttar Pradesh, and Tamil Nadu have a liberal policy

Major Players And Their Market Share

Market Size
70 million cases market Growth rate :- 10-12 % per annum Major market zone:- South and West account for bulk (> 75 %) of this market Major beer consuming centers :- Maharashtra (Mumbai),Karnataka (Bangalore), Tamilnadu (Chennai)

IMFL Categories: Market size (in %)

Major Brands
Major beer brands (manufacturers) King Fisher Kalyani Black Label (UB Group) Golden Eagle (Mohan Meakins) Haywards (Shaw Wallace) London Pilsner(Associated Breweries and Distilleries) Foreign brands Strohs Fosters

Company

Market Size (mn cases)

Brands

Herbertsons McDowell & Co. Shaw Wallace UDV

8 17 9 Over3

Bagpiper McDowell no.1, Diplomat Directors Special Green Label, Smirn Off

Bacardi
Seagram

0.1
0.8

Bacardi Rum
Royal Stag

Other Players
Ace Continental Exports - Manufacturer of beer

Amrut Distilleries - Supplier of dark rum, brandy and whisky


Champagne Indage - Producers of still & sparkling wine Chateau Indage - Sparkling wines manufacturer Cobra - Beer manufacturer Dajeeba Vineyards - Red and white wine manufacturer

Kem Liquors - Rum and brandy bottling services

8. Liquors India - Manufacturer of liquor ND Wines - Red, white and appetizer wines producer Radico Khaitan, Rampur - Liquor manufacturer

Shaw Wallace - Producers of spirits and beer


United Breweries - Kingfisher - A leading brand of Indian beer from the UB group Vinbros & Co - Manufacturer of whisky, vodka, brandy, rum & gin

Strategies Of Beating Up Competition

BCG Matrix

Consists of four quadrants namely: STAR CASH COW QUESTION MARK DOG

STAR
Stars are high-growth, high-share businesses. Eg. TAJMAHAL BEER:-It has a distinct aroma and unique taste. The demand of this beer is mainly in abroad (Australia, France, USA) as it is premium priced and has bitter taste which is not liked much in India though it is served in some premier hotels in India. The demand outside is very good and it accounts for good market share in the exported beer in India.

KINGFISHER STRONG:-spectacular growth of 36% (against a market growth of 16%)was witnessed. Kingfisher Strong has now achieved the number one position in the strong beer segment.

CASH COW
Cash cows are low-growth and high-share businesses. Eg. KINGFISHER LAGER BEER:-it has witnessed a market growth of 13% in comparison to the lager beer industry growth of 9.4%.In the lager beer segment, UBL is the market leader in all the 10 largest states of the Country. UBL commands a market share of around 40% with 67% of the market share in the lager beer segment.

QUESTION MARK
Question marks are low-share business units, in a high-growth market. Eg. LONDON PILSNER:-it has witnessed a market growth of more than 20% and targeting a market share of 15% .

DOG
Dogs are low-growth and low-share businesses. Eg. KALYANI BLACK LABLE:-one of the oldest brand launched in 1969. It has low market share as it is only popular in east India and it is assumed to be economical . The market growth for this brand is not good as people are shifting towards other beers such as London pilsner which is also an economical brand.

Porters Five Force Model


This model is developed by Michael Porter, this model analyzes the nature and intensity of competition in an industry through five forces :
BARGAINING POWER OF SUPPLIERS RIVALRY THREAT OF NEW ENTRANCE BARGAINING POWER OF CUSTOMERS THREAT OF SUBSTITUTE

Ethical And Unethical Ways Of Business Conduct In Liquor Industry

Ethical Ways Can Be:Writing on the bottles that liquor is harmful for health. Sometimes it is important to use in medical purpose. Sponsorship of sports, social and cultural events that is surrogate advertising. Uniform Federal Excise Policy Strategic tie up with global players

Unethical Ways Can Be: On one hand, govt. says, put a label saying liquor is harmful to health" to people on the other side of the fence it may sound unethical but to manufacturers or brand owners it is a necessity because any business which is allowed under the law has a right to advertise and market their product. By denying them that right, we are transgressing the law.

Indirect Advertising
Teachers whiskey has launched the Teachers achievement Awards. Other sponsored awards and events include: Smirnoff international fashion award. Lakme India Fashion Week was sponsored by Seagrams Blenders pride.

Strategies of Major players

Radico Marketing Success Stories


8 PM Whisky Launched in 1998, it was the first Indian whisky (blended with scotch) offered to Indian consumers First Spirits brand to enter Limca book of Records for selling one million cases in the first year of launch The launch TV campaign was adjudged among the best ads of the century at Cannes Recently famous Bollywood actress Mallika Sherawat endorsed the brand.

Radico Marketing Success Stories


8 PM Whisky
The new packaging launched in FY 09 is the first Grain blended whisky launched in operating segment.

Grain proposition is considered to be smooth, mellow & a superior whisky.

Radico Marketing Success Stories


Old Admiral Brandy Launched in 2002 Adjudged fastest growing brandy brand in the world by Drinks International for two consecutive years 2003 and 2004 Sold one million cases in the second year of its launch Katrina Kaif had endorsed the brand in 2004.

Radico Marketing Success Stories


Contessa Rum Largest selling rum brand in the defense segment in FY08
20% of the defense market share Sold 2.35 million case in FY08

Radico Marketing Success Stories


Magic Moments Vodka The only successful Brand launch in the industry across all flavors in last 5 years Innovation in Packaging Created new price point in the segment Fastest growing brand in the category The youth icon of Indian Bollywood industry- Hrithik Roshan has endorsed the brand Rewarded with Gold Medal at Monde selection

Magic Moments Remix Vodka Launched in Six New Flavors in FY 09. Chocolate Green Apple Raspberry Lemon Grass & Ginger Lemon Orange

M2- Remix

Case Lets

Case 1 Kingfisher Beer Case 2 Anti-Liquor protest & Govt.

Case 1 Kingfisher Beer


Kingfisher -solid beer brand in south and west India which are major areas of beers consumption. Liquor advertising is banned in print and electronic media, liquor companies have resorted to surrogate advertising, which are soon to be banned by govt. As a result, liquor industries could promote themselves only through sponsorship of sports events, contests and fashion shows. Kingfisher already has stopped surrogate advertising. In Kingfisher Derby which is held in Bangalore every July, kingfisher beer brand is promoted. also, Mr. Mallaya sponsored Kingfisher Fashion Awards , presenting Ritu Beris Collection in Paris.

Case 2 Anti-liquor Protest & Govt.


In 1990, the women of Dubagunta, a small village in the Nellore district of the south Indian state of Andhra Pradesh began an anti-liquor protest. They pressurized men to swear that they would stop drinking, physically restrained habitual drinkers, attacked liquor shops and godowns and fought with the police, liquor mafia and the drunks. The movement spread like wildfire to 800 villages throughout the state. Women in these 800 villages not only prevented the entry of liquor into their villages, but also prevented district collectors from holding liquor shop license auctions.

Explaining that those women are tortured to intolerable limits by the abuse and beatings of drunk husbands and the hunger and poverty in which their children grow and die, women have taken up the step. It was reported that the women were beaten with rods, sticks, boots and rifle butts by the liquor contractors' henchmen as well as the police force. Nonbailable cases were filed against agitators who were then imprisoned. There were even reports that many women activists were raped and murdered. These events became a matter of national debate and eventually led to the then Congress government of Andhra Pradesh announcing a statewide ban on the sale of liquor from October 1993.

The AP government lost $ 362 million in annual revenues after the prohibition. Despite new taxes on vehicles and consumer goods, the state's budget deficit rose to $ 242 million. Prohibition continued in the state till 1997. In the same year, the new CM Chandrababu Naidu lifted the ban on liquor, claiming that he was forced to do so because of the state's financial problems. This move met with unprecedented criticism in the media. Critics claimed that the state could have easily avoided unnecessary expenditure on many other fronts, such as salaries and various subsidies.

Suggestions To Control And Minimize Or Eliminate Unethical Behaviors In Liquor Industry

Unethical Behavior
* Abuse of inmate * Inappropriate relationships with inmates

* On-duty misconduct
* Off-duty misconduct * Introduction of contraband

How To Avoid Unethical Behavior


The Initial Complaint Confidentiality Interviewing Witnesses/Obtaining Documentary Evidence Polygraph Photo Lineups Positive Action Law and public policy

Thank you..!