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AS LAID-OFF workers at the Scottish home
of Johnnie Walker drain the bitter cup, India’s United Spirits is preparing to raise a
toast to a whisky named in honour of a Scottish highland tradition—the Bagpiper.
It is widely expected that at the end of
this year, when the numbers are totalled,
Johnnie Walker’s iconic Striding Man will
not be striding at the head of the band of
the world’s top-selling whiskies. The Bag-
AI ENGINEERS
MAY JOIN STIR
piper, walking with a little extra swagger in
a ceremonial Indian dress complete with a
turban, will be leading the party.
In Kilmarnock, which will be losing its
nearly two-century-old link with the brand
because of Diageo’s decision to shut the
plant in the western coastal town, the workers are almost gleeful that Johnnie Walker
will be overtaken by a Johnnie-come-lately.
“We wish Bagpiper every success for the
future and hope its sales continue to rise.
And we want to know if Bagpiper can give
700 desperate folks a job,” Scottish tabloid
Daily Record quoted shop steward Georgina
Cunningham as saying earlier this month.
United Spirits, part of the Vijay Mallyaowned UB Group, says it expects to sell 17
million cases of Bagpiper whisky in the fiscal
to March. Johnnie Walker sales in the same
period are projected at 16.8 million cases.
In 2008, Johnnie Walker sold 16.3 million cases to 15.4 million by Bagpiper. Sales
of the Indian whisky have been growing at
10-11% while the scotch brand’s volumes
are rising at about a third of that, according
to estimates by United Spirits.
“Bagpiper’s strong growth has been
achieved on the back of the investment in
the brand, the consistent quality it has delivered to consumers and the imagery
which has been spruced up by an English
design house,” United Spirits president and
MD Vijay Rekhi observed.
A Diageo representative said Bagpiper is
an important brand in India but there is no
direct comparison between it and the
“world’s best-selling Scotch whisky brand”.
Different as chalk and cheese: P 9
SALAM
JEFF IMMELT
FINGERS CROSSED
CHIEF EXECUTIVE, GENERAL ELECTRIC CO.
D-DAY:HOPES STILL ALIVE FOR
AIR India, which is seeking a bailout to
stay afloat, suspended flights and ticket bookings till October 15, as its pilots
held the company and passengers to
ransom for the fourth day. The pilots
maintained they would continue to ‘report sick’, a euphemism for being on
strike, even as civil aviation minister
Praful Patel appealed to them to resume duty. The airline’s executive engineers may also join the strike. PAGE 8
THE ninth chairman and CEO of General Electric,
Jeffrey Robert Immelt, has upended the traditional
innovation model. His radical ideas to fire up the
$183-b conglomerate include putting India and
China at the centre of a new model that talks of
developing products in emerging markets and
distributing them globally. In an e-mail interview
with ET’s Vinod Mahanta, Immelt discusses the
idea and GE’s India plans, among others. Excerpts:
BHARTI-MTN DEAL
Soma Banerjee & Rohini Singh
brass guessing on what the last-minute
changes in the deal structure are likely to be.
“I can’t say anything at this point. We are all
HE Bharti-MTN talks entered the last waiting for the final word from Johanneslap as the final decision from the South burg,” Sunil Mittal told ET NOW outside
African government is expected on the Bharti office on Monday evening.
It is widely believed that the South African
Wednesday, the last day of the exclusivity period between the two firms. A source close to government is looking at an executive order
the finance ministry said the Indian govern- to accommodate the deal structure. “We are
awaiting the final deal structure
ment is waiting for its South
after which we will explore ways
African counterpart to revert NERVOUS
to fit it in with the policy regime
with a new deal structure that
HOURS
here,” an Indian finance ministry
will comply with Indian laws.
The finance ministry is likely SA govt officials are official said. “The visiting delegato accommodate the deal if it is keeping Bharti brass tion discussed a structure where
Bharti would be listed in India
not in direct violation of India’s
and MTN in South Africa and the
policy on dual-listed companies, guessing on the
which in its current avatar may last-minute changes possibility of a common holding
need changes in the capital ac- in the deal structure trust,” the official added.
The official word from the Indicount convertibility regime.
“We are hopeful the deal will go through, an government has also kept hopes alive for
but don’t have a real idea of the conditions Sunil Mittal’s audacious cross-border merger
the SA government may impose in the new that’s likely to create a $23-billion giant with
deal structure. They have indicated a deci- operations in 24 countries. Finance minister
sion on September 30 (Wednesday),” a Pranab Mukherjee said he and the prime
minister had a “positive approach” on the deal
source close to the Bharti group said.
From available indications, a decision on and that the government was working on it.
the deal is likely on Wednesday. But SA government officials are keeping the Bharti ‘Positive outlook on deal’: P 9
ET NOW
T
Long wait for car delivery as
demand surges suddenly
GUESS WHAT?
The Suspense Lingers
A sudden upsurge in festival demand
over the last 10 days has emptied factory
inventories for cars such as Maruti Swift
Dzire, Ritz, Honda City, Hyundai i10
and Toyota Fortuner, forcing dealers to
be non-committal about the delivery
date for these vehicles.
Bharti brass keeps fingers
crossed on the new deal
structure from SA govt
Final decision from SA govt
expected on Wednesday, the last
day of the exclusivity period
between the two companies
BUSINESS OF BRANDS: PAGE 20
PEs vie for Strides arm stake
Finance ministry is okay with
the deal if it is not in direct
violation of India’s laws
Private equity funds Carlyle Group and
3i are among those holding
preliminary discussions to take a
substantial minority stake in
pharmaceutical company Strides
Arcolab’s injectables business.
India to play key role in
GE’s operation disruption
You are expected to make some announcements regarding investments and joint ventures in India. Can you give us some details?
India represents one of the significant growth
markets for GE globally and we continue to
look at significant investments and partnerships to consolidate our position in the market.
products around the world. In today’s “Reset”
world, GE needs to have more products at
more price points. We need to be looking to
design and engineer products in India that
meet the needs of the Indian market, and then
look for opportunities to sell these products in
other markets. A couple of good examples,
like a $1,000 handheld electrocardiogram deGE is talking of testing a new management vice and a portable, PC-based ultrasound machine that sells for as little as $15,000, are revmodel in India. What is it all about?
The most recent edition of the Harvard Busi- olutionary, and not just because of their small
ness Review published an article entitled size and low price. They’re also extraordinary
“How GE is disrupting itself”. In this, I dis- because they were originally developed for
cussed the need for us to rethink the tradition- markets in emerging economies.
al model of developing high-end products in
developed markets and then selling these India strategic growth market for GE: P 9
HUNGER HELPLINE
EMERGING BUSINESS & IT: PAGE 5
HE HAS WHAT
999 OTHER INDIANS
Domino’s may deliver
first eatery chain issue
Credit Suisse set to get govt
okay to launch banking ops
The government is set to allow Credit
Suisse to launch banking operations in
India, indicating that the political heat
over black money stashed away in Swiss
bank accounts would not come in the
way of providing market access to such
banks in the country. A final nod is
expected from the finance ministry soon.
EFM: PAGE 13
Shedding their cautious approach, entrepreneurs in the South have rewritten the business
matrix. In a 28-page special report, this year’s
The Southern Business Review gives you a
sectorscape of the changing business scene
across the southern states.
Today’s edition carries
BRAND EQUITY
WEDNESDAY 30 SEPTEMBER 2009 | NEW DELHI | 52 PAGES | RS 2.50 OR RS 5.00 ALONG WITH THE TIMES OF INDIA
Party’s Over For Diageo Brand As Mallya Whisky To Top Global Sales By Year-End
I N D I A
IAir feI1I
WWW.ECONOMICTIMES.COM
Johnnie can take a walk, Bagpiper to be No.1
http://economictimes.indiatimes.com
Y O U R
EMERGING BUSINESS & IT: PAGE 5
BRAND EQUITY
AHMEDABAD | BANGALORE | CHANDIGARH | CHENNAI | HYDERABAD | KOCHI | KOLKATA | LUCKNOW | MUMBAI | PUNE
Are property prices surging more on account
of speculation than actual demand?
DATA TRAFFIC PUTS CELL
COMPANIES IN A JAM
DON’T HAVE.
Aims To Give PE Investor JP Morgan Exit Route
Khomba Singh & Ratna Bhushan
NEW DELHI
THE Indian franchisee of Domino’s Pizza plans
to come up with an initial public offering (IPO)
to allow private equity investor JP Morgan,
which owns 33% in the company, to exit the
fast-food chain, three persons familiar with the matter said.
Delhi-based Jubilant Group
owns 67% stake in Domino’s Pizza India, which will become the
first restaurant chain in the country to be traded publicly if the
share sale goes through. The
chain’s parent, US-based Domino’s Pizza, doesn’t hold a stake in
its Indian franchisee. The details of
the proposed IPO are not known.
JP Morgan did not respond to
an email sent by ET. Domino’s
Pizza India CEO Ajay Kaul also
declined to comment. “We cannot talk on
behalf of JP Morgan. IPO is one of the options
we are looking at, but it is for the private equity partner to decide,” said Shyam Bhartia,
co-promoter of Jubilant Group.
JP Morgan is looking at exiting Domino’s
Pizza through the primary market route as it
has been unable to find a buyer at the valuation it wants, an executive at a private equity
firm said. Besides, covenants and rights enjoyed by a first investor may not be transferable through a share sale to an investor without the consent of the Indian partner. In 1999, Indocean Capital, an
affiliate of JP Morgan Partners,
had picked up a 25% stake in
Domino’s Pizza India, which was
subsequently increased to 33%, a
person close to the deal said.
Eating out and home delivery
of fast food in the country has increased in the last few years. Today, about 30% of working singles
eat out at least once a month and a
majority of them spend Rs 101150 per meal, according to the
Food Franchising Report 2009,
prepared jointly by Ficci-CIFTI and Franchise
India Holdings. This has led to an increase in
private equity deals in the restaurant space.
AA
HOSPITAL BED.
Largest pizza chain in India: P 9
There are just a little over 0.7 hospital beds per 1 000 people. Shocking, yet true.
India’s healthcare sector needs a reality check. It’s time we discuss , debate,
BACK IN BUSINESS: IPO MARKET IS TICKING ONCE AGAIN
REAL ESTATE RUSH
OIL’S SHADES OF GREY
Many realty firms have approached
Sebi to seek approval to raise around
Rs 14,000 crore via IPOs. P 7
The premium for Oil India in the grey
market hints at a tepid debut for the
PSU major on Wednesday. P 10
question and change. Philips presents a forum to discuss the problems and chalk
out some concrete steps. Come,let’s bring light at the end of the tunnel.
PHILIPS
Land of the India rising sun
Accessible Healthcare
Japan Faces Entrepreneur’s Block, Looks To India For Ideas
Ravi Teja Sharma
NEW DELHI
A
TRIP to Japan early this
year was an eye-opener for
Kanwal Rekhi, the Silicon
Valley-based Indian serial entrepreneur and venture capitalist. He was
surprised by the interest among
Japanese authorities, students and
businessmen to learn from the
entrepreneurial surge that catapulted India into the league of major
economic powers in the world.
“I found it difficult to believe,”
Mr Rekhi, who went to Japan on
an invitation from Keio University
in Tokyo and Kyushu University in
Fukoka to speak on
entrepreneurship, told ET during
his transit in Delhi. Indeed, anyone
would, considering that Japan is
home to some of the world’s largest
and most respected consumer
brands such as Sony and Panasonic,
Toyota and Honda.
However, the world’s secondlargest economy is now up against
several adversities on the entrepreneurial front. The youth in Japan is
risk-averse and more oriented
towards taking up jobs with large
MNCs. Its ageing population is not
helping the cause either.
Huge India interest: P 9
-
presents
AA
Reality Check
t e c h n o p a k
As a society,
Japan has not
been able to
make
entrepreneurship
a priority.
Indians can fill
up this void.
LEADE RSHIP FORUM
H E
A L T
F-I
C A R E
Speakers: Hon’ble Union Minister of Health and Famil y yWelfare, Ghulam NabiAzad. * Hon’ble Minister
of State for Health and Famil y yWelfare, Mr. Dinesh Trivedi. * Dr. Prathap. C. Reddy, Dr. Devi Shetty,
Dr N.KJairam are some of the key speakers who will be participating in the forum.
Place: Hotel Taj Palace, New Delhi,India Date: 9th October, 2009. Time: 09:30 am onwards
KANWAL REKHI
VENTURE CAPITALIST
SENSEX 159.91pts; Nifty: 47.90pts; Rs/$: 0.12p; Rs/£: 0.03p; Rs/€: 0.43p; Gold: Rs.30; Silver: Rs.35
*
Tentatively confirmed
Participation by yinvitation only. y.
For registration, please write to us at paruLsharma@technopak.com