Profile: Jeremy Gilley

The man marketing world peace

Vijay Mallya builds an Indian business empire

Sonoo Singh

Feature%201_120As the face of the growing opulence of India, Dr Vijay Mallya, the Indian billionaire in his Harris Tweed and matching diamonds, is a spectacle in himself. And the setting where the owner of the Kingfisher beer and airlines brand chose to present himself last week to the Western media could not be far from perfect. On the Island of Sainte-Marguerite, just off the playground of the rich and famous in Cannes, he hosted a lavish, kitsch party where he announced that his United Spirits Group was on course to “outsell” arch-rival Diageo – the second largest spirits company in the world.

He bought whisky company Whyte & Mackay for £595m last May, catapulting his United Breweries Group (the holding company of United Spirits) to third largest spirits company after Pernod Ricard and Diageo.

Seemingly unimpressed by the fact that Diageo, the world’s largest drinks company, is desperate to take a strategic stake in his United Spirits Group, the drinks baron from India revels in his laid-back “King of Good Times” image. The strapline is used to endorse his Kingfisher brand.

“I firmly believe in entertainment as being a critical part of my entire marketing, PR and brand enhancement. And so whether it is my yacht or any of my homes, entertainment is very much an integral part of the way I do business,” says the man reported to be worth £4bn, before disappearing off to show off “Le Grand Jardin”, his villa bought six weeks before. The abode, which comes attached with a fortress where “the man in the iron mask” was held prisoner, Mallya says, is just one of his many homes and rumoured to have cost over €42m (£33m) after he bid against several Russian oligarchs.

With yachts, including the Indian Empress, one of the largest private yachts in the world; more than 100 race-horses; a collection of “several hundred vintage cars”; and a growing collection of Impressionists, including “Chagall, Monet, Picasso, whatever”, Mallya is a living advertisement for the economic optimism of India.

“You have to remember that the economy in India has declined significantly, but not to the extent of the utter panic that has spread to other countries. So while it has declined, it has not been shattered like in the rest of the world,” he says in an exclusive interview with Marketing Week.

In what at first seems to be a slightly punchdrunk state following the party, Mallya talks of his exhaustion after being “pursued by the media”, but then gets animated talking about himself as a brand. “When I bought W&M, no one said that United Spirits had bought the spirits group. Instead it was all about Vijay Mallya. Several Indian companies pay millions of dollars for famous Bollywood stars to endorse their brands; but for me it is free. I endorse my own brands and get the press of any Bollywood actor. A fact that’s proven by scientific research,” says Mallya, who also draws parallels between himself and Richard Branson.

Just like the bearded Branson, Mallya has also shamelessly wedded his lifestyle to his Kingfisher brand, but with the amplified flamboyance and pomposity of a man who likes to see himself as a celebrity – even when not surrounded by Bollywood glitterati.

As one of the most influential business barons of India, he is not only used to being courted by the media and politicians but has also been part of the establishment – he began his career as a politician and spent six years as a Parliamentarian in India – and once owned an eponymous TV channel, Vijay TV.

One of his finest moments in India was the launch of Kingfisher Airlines in 2005, a move that was seen as a stroke of genius in a country where all alcohol advertising is banned. Kingfisher Airlines started its international flights this September.

But it wasn’t until Mallya appeared on the Formula One scene, after he acquired the previously Dutch-owned Spyker team for €90m (£71m) and renamed it Force India, that he seemed to earn recognition in the West. It’s a suggestion that appears to irritate him: “Please understand that for me the number one market is India, because that is where the massive growth opportunity is. And whether I became an international celebrity or not, I am not bothered. But if my involvement with F1 has put me into the limelight, so be it. It was not designed as such.

“It was a deliberate and a calculated move. I had already sponsored Benetton in ’95 to‘96 when Michael Schumacher won the world championship and so recognised the value of F1 sponsorship. And it is not everyday that an F1 team is up for sale. I believe that even before I bought the F1 team, I had a decent enough international profile because of my airlines and everything else that I had done,” he says.

Mallya’s is not one of those well-worn tales of rags to riches. He was in his 20s when he was handed control of a business empire following the death of his father. At the time the business, reported to be worth $100m (£62m) in revenues, included a brewery, a pharmaceuticals company and a battery manufacturing unit. Today, the group includes various spirits brands and the market-leading Kingfisher – which boasts almost 50% of the Indian beer market – and aviation.

In addition, Mallya recently bought the strangely named premium vodka Pinky, which he claims is already outselling established rivals, including Belevadare.

But while Mallya is betting big on going global, it is India that remains at the heart of all his businesses. “I am what I am because India gave me the foundation and the base and I owe my success to my country,” he says. “India remains the most attractive place to do business because it has a very young and impressionable population,” he adds.

Mallya is currently leading a campaign against the Scotch Whisky Association, which does not allow Indian whisky to be sold in the European Union, because it is made from molasses and therefore cannot be marketed as Scotch. Mallya, who manufactures Indian whisky, argues that the SWA needs to adopt a more conciliatory tone towards him. He says that he will happily label his brand of whiskys as “Indian”, and the SWA, which has always disputed the high tariffs placed on European alcohol imports to India, should remember that it was “60 days after I bought W&M that India abolished the additional duty on imported spirits”.

His influence within the corridors of power in India – and some say abroad, citing close links with the French Government after he became one of the first to order the superjumbo Airbus 380 – is not to be doubted or underestimated. And as sales of spirits continue to boom in emerging markets, even in an economic downturn, Mallya is expected to remain a powerful force.

Meanwhile, Mallya is keen to get his hands on rival Cobra beer, which is up for sale. “I can’t deny that Cobra has come with some very aggressive pricing and taken share from Kingfisher in the UK. And though I do not believe it is a sustainable business, I would love to acquire Cobra for the right price.”

Business talk over, Mallya is keen to go back to his party and live the “good life”, but not before laughing when asked about the origins of the prefix before his name. “People love me and call me all sorts of names, some say Dr and others say Boss,” he says before mumbling about some honorary degree from the University of Southern California.

Effortless success, however, is not a given. This week his airlines business posted a 90% increase in its net losses for the quarter ending September 30. Good Times might just have to wait for a bit.

Vijay Mallya’s acquisition of Whyte & Mackay last May was not his first association with the Scots. His United Spirits Group was first established in 1826 by Scotsman Angus McDowell and came to be known as McDowell’s. McDowell rapidly became the preferred purveyor of fine imported liquors and cigars for Indian maharajahs and British generals. Mallya’s father, Vittal, acquired McDowell’s at a time when prohibition was mooted in India, believing prohibition to be unworkable. He was soon proved right.

In 1968, McDowell’s No.1 Whisky, the company’s’ flagship brand of United Spirits was launched, followed by Bagpiper Whisky in 1976. This was then followed by a distillery acquisition spree across the country. In 1983, Vijay Mallya was installed as the chairman of the UB Group and his first major coup came in 2005 when he acquired the company’s arch rival Shaw Wallace Company.

A year later he acquired the French Taittinger brand. In 2007, UB Group bought Whyte & Mackay, whose brands include Isle of Jura malt whisky, Dalmore Single Highland Malt, Vladivar Vodka and Glayva liqueur.

Since the takeover, W&M brands have not only been introduced in India but also Dubai, Taiwan and New York. Reports also suggest that W&M is considering acquiring Glenmorangie’s Glen Moray Distillery, put up for sale by Moet Hennessy Louis Vuitton (LVMH) group recently.

Scotland’s fourth largest Scotch maker has operated under several owners in the past couple of decades, switching its name to JBB and Kyndal before returning to W&M. It was snapped up by Fortune Brands in 1990, before being sold off in 2001 to a management buyout, backed by WestLB. In 2005, drinks industry investor Vivien Immerman bought the business backed by property tycoon Robert Tchenguiz, before it was sold on to Mallya.

Reports suggest that Diageo is in talks with Mallya about buying a stake in his United Spirits business.

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