UK-based scotch whisky maker Whyte & Mackay (W&M), which is owned by Vijay Mallya, is looking at increasing its focus on branded spirits marketing and reducing reliance on bulk scotch whisky manufacturing that has been its core business for over several years.
Vijay Rekhi, president and managing director of United Spirits Ltd (USL), said the shift in the company’s business strategy was driven by the fact that branded spirits business offers the best margin while bulk whisky the least.
“We want to move up the value chain to improve profitability. And so when you take liquid (bulk whisky), private label and branded whisky then the balance tilts in favour of the last segment of the market,” he said.
Being the fourth-largest distiller would help W&M in realising this strategy more easily. Rekhi said going forward the company would be using a bulk of its liquids for its spirits brands - Dalmore, Isle of Jura and Whyte & Mackay - and then whatever would be left would go to third-party vendors and bulk whisky buyers.
Rob Bruce, head of global PR of W&M, said the new business strategy did not imply that distiller was moving from one business to another.
“We remain connected to our spirits brands (Whyte & Mackay, Isle of Jura and Dalmore), own label and bulk whisky sale. Our long-term strategy is to focus more on branded business where there is more value,” he said.
According to him, one of the reasons for the shift in strategy was to de-risk the company’s business from price volatility of bulk whisky.
Jamshed Dadabhoy and Aditya Mathur, analysts with Citigroup, in their report on Thursday said the move would prove to be positive in the long term.
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