CIL has earmarked around $25 million for the proposed acquisitions. Along with brands, it plans to acquire the production unit, know-how and the distribution network.

Once the acquisitions are made, the company plans to sell its major brands in the corresponding countries along with the acquired brands.

Ranjit S Chougule, managing director, CIL, told DNA Money, “Even though we have a good presence in India, we are yet to capture markets abroad. Acquiring companies having a good presence in their own countries is a better option for us.” Becoming a local player has its advantages compared to being an exporter, he said, adding, talks with a few Australian players would start early next month.

Meanwhile, as part of its global expansion, CIL, which claims a marketshare of 75% in the country, is set to sign a marketing tie-up with DGB, the largest wine and spirit producer in South Africa. As per the deal, to be signed in a few weeks, CIL will market DGB’s major brands including Bellingham, Douglas Green, Boschendal and Culemborg in India, while DGB will market CIL’s major brands in that country.

The global wine business is estimated at above €150 billion, with France, US, Australia, Spain and Germany among the major wine manufacturing countries. Around 35,000 million litres of wine per annum is produced globally. The Indian wine market is estimated at around Rs 125 crore (over €21 million).

“The acquiring company can also have a high hand in the domestic market through the import of established foreign brands,” an analyst said.

DNA Money had earlier reported CIL’s tie-up with the $6-billion Southern Wine & Spirits of America Inc, the largest wine and spirits distributor in the US, to market its Tiger Hill brand in the US market, where Soma, Omar Khayam and Mist of Sahyadri are marketed by another distributor, Shirazi Wines.

In February this year, CIL had signed a pact with Harvey Miller Wine Agencies, UK, to acquire tha latter’s McKinley Vinters wine distribution business.

The company also intends to open the country’s first privately managed institute to train wine makers, wine tasters and other technically skilled people at a cost of Rs 50 crore in Bota, situated on the Pune-Nashik Highway.

CIL has around 35 established brands in white, red and sparkling varieties, which include Riviera, Chantilli and Tantra. In the economy segment, the company introduced Vino brand of wine at Rs 99 a bottle. CIL along with Sula Vineyards and Grover Vineyards controls around 98% of sales in the Indian wine segment.

Whirl & swig

The acquisitions will include brands, facilities, knowhow and distribution network of the target companies

The firm will initiate discussions with a few Australian players early next month

It will also explore buyout possibilities in the US, France

Article by Reghu Balakrishnan