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Nepal's liquor industry in high spirits.

Kathmandu, May 11 -- G. Mullick is general manager of sales of Untied Spirits Nepal. He is an expert in the liquor industry with 25 years of experience. He has been working for the last 11 years with United Spirits, behind him. The Kathmandu Post talked to Mullick about Nepal's liquor industry and future plans of the company. Excerpts:

How is the liquor market doing after government's recent initiative to regulate sales?

Government policies on regulation did exist earlier, but previous governments didn't implement them. The provision of licensing, fixed opening and

closing time and prohibiting selling to minors was already there. What this government has done is that they've separated liquor outlets from grocery stores. It's a good initiative. But there was no drop in our sales. There was a drop in non-moving brands and new brands. Since the government introduced these new measures, we've launched our premium brand Antiquity and we have decided not to sell Antiquity at grocery stores and proved its premium value selling only at exclusive liquor outlets.

What is the total size of Nepali liquor market? What is its annual growth ?

The size of the Nepali liquor market is around Rs. 6.5 billion. It includes beers and imported liquors. The overall annual growth of the market is 18-20 percent. Nepal is basically a whisky market. The Nepali market can be divided into five segments - Scotch, 25 degree UP, 40 degree UP, 50 and 70 degree UP and homemade liquor. The 50 and 70 degree UP segment has been in the market for the last three years cutting the market share of 40 degree UP. This year, the 25 degree UP segment grew by 22 percent.

What we've seen is the growth of the super premium whisky segment market by more than 100 percent and the semi-premium segment by 16 percent. This indicates that there is disposable money with the upper segment consumer.

What are the problems that the liquor industry is facing?

Our problems are similar to what other industries are facing: irregular power supply, labour problems, strikes and so on. On the other hand, the government has to think and act a lot to regularise the industry from the point of manufacture to the retail point to control revenue leakage. In India, liquor sale is very strict up to the retail sale point and the consumer. One adult individual can't carry more than two bottles, and there are also dry days in some parts of India.

How has the liquor market evolved over the years in Nepal?

As I mentioned earlier, Nepal is basically a whisky market, but the market for white spirits (vodka and gin) is also growing. The market of the 25 degree segment has grown by 20 percent and the 40 degree segment has grown by 25 percent. White spirit consumption is increasing across the world. But in Nepal, one can find camouflage drinking, which means that having white spirit based cocktails is rampant.

Who are your major competitors?

Among domestic liquors, our competition is mainly with Royal Stag in the deluxe segment. In the super premium segment, we're competing with cheap range Scotch including Red Label.

Can we expect new products from United Spirits in the near future?

Our group is very big with innumerable brands. One thing is sure: we're not coming up with a lower segment brand for the time being. Our focus is on premium brands as this segment is growing very fast. Last Dashain, we launched Antiquity, a premium segment whisky. We may introduce new brand in the next festive season.

Our parent company UB acquired Whyte & Mackay recently. We're planning to import Black Dog, Whyte & Mackay, Jura and Dalmore, all premium Scotch brands, in the near future.

The death of a few people after consuming branded Nepali liquors a few months ago raised the question of the quality of such liquors. What is a company like yours doing on quality control?

We're committed to quality products. We send our products batch by batch to our quality control lab at Bangalore, the UB headquarters, for quality checks; and only after their approval do we dispatch the product to the market.

Indeed, the easy availability of spurious liquors has become a big problem for genuine manufacturers like us. Spurious liquors and duplication of popular brands are rampant in Nepal. It is hampering the whole liquor industry. Our view is that the government should act on it.

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Publication:Kathmandu Post (Kathmandu, Nepal)
Geographic Code:9NEPA
Date:May 11, 2009
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