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Shaw Wallace move to put liquor biz on block — `SABMiller has complete control over SWC beer brands'

Boby Kurian

Bangalore , Jan. 11

THE global brewing giant SABMiller today said it has complete control over Shaw Wallace's portfolio of beer brands and ruled out any impact on its beer business following the latter's move to sell off brands such as Royal Challenge and Haywards whiskies as part of a move to put the spirits business on the block.

Shaw Wallace Breweries Ltd, managed and 50 per cent owned by SABMiller, sells three of its main beer brands under the Haywards and Royal Challenge brand names - Haywards 5000, Haywrads 2000 and Royal Challenge Premium Lager.

These were extensions of the spirits brands as Shaw Wallace muscled its way into the beer market in the mid-90s and emerged as the country's second largest brewer. It hived off beer business into a joint venture with SABMiller in May 2003.

Mr Richard Rushton, Managing Director of Shaw Wallace Breweries, told Business Line that, "SABMiller has watertight, enduring legal agreement with Shaw Wallace & Co which gives it complete rights of Royal Challenge and Haywards beer brands in perpetuity."

The industry observers pointed out that this could lead to a piquant situation where the trademarks could be owned by two separate entities operating in two different product categories of the alcoholic beverage market.

McKinsey Singapore, which called for bids from potential suitors for Shaw Wallace's liquor business, is slated to open the bids on January 12. The valuation of Shaw Wallace's liquor entity could be severely dented, as the successful bidder may have to share the trademark with SABMiller.

It must be mentioned that the iconic whisky brand, Royal Challenge, positioned in the premium end, contributes significantly to the profit pool of Shaw Wallace's liquor operations, while Haywrads Whisky in the economy segment chip with volumes.

Haywards 5000 and Royal Challenge Premium Lager account for over 18 million cases in the annual depletions of the SABMiller-managed Shaw Wallace Breweries.

Business Line had earlier reported that UB and a consortium of investors led by Mr Ramesh Vangal were the two serious bidders in the fray for Shaw Wallace's spirits operations. UB is the domestic market leader in both spirits and beer, where it is locked in a straight fight with SABMiller-Shaw Wallace combine.

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