FINAL PROJECT REPORT ON STUDY ON

STUDY ON UNITED BEVERAGE GROUP. (A report Submitted to Ishan Institute of Management & Technology, Greater Noida as a partial fulfillment to full time post graduate diploma in Marketing management.)

UNDER THE GUIDANCE OF Pratul MIshra

Submitted To, Dr. D.K Garg, Chairman, IIMT Gr. Noida (U.P)

Submitted By, Pramod Kumar Yadav Enr : 5080 (Marketing) Deo Kumar Enr : 5047 (Marketing) Batch: 16th

Ishan Institute Of Management And Technology 1 A, Knowledge Park 1 , Greater Noida, Dist. G.B. Nagar (UP) Website: www.ishanfamily.com E-mail: student@ishanfamily.com

CERTIFICATE

ACKNOWLEDGEMENT

No research can blossom from single persons mind without proper guidance, assistance and inspiration from various quarters. Our project was given its present shape by assistance of many people whom we are greatly indebted to. We owe deep intellectual debt to the numerous people who through their rich and various contributions have greatly improved our understanding of various concepts of our project. We express our sincere thanks to honble Mr. Pratul Mishra for his stimulate discussion, constructive and valuable suggestions that helped us in this endeavour. We would like to thank all those people who graciously helped us by sharing their valuable time, experience & knowledge for completion of this project. We take an opportunity to express our sincere thanks to Dr. D.K.Garg (Chairman, IIMT), and all the staff members of the PGDM department for making available all the facilities in fulfilling the requirements for this reasonable work.

It Is My Proud Privilege To Express My Deep Sense Of Appreciation And Gratitude To My Parents And Friends For Their Support And Co-Operation In The Course Of The Project Either Directly Or Indirectly Involved In Time With Their Valuable Contribution.

DECLARATION
The Final Project on - Study of United beverage group under the guidance of Mr. Pratul Mishra is the original work done by us. This is the property of the institute and use of this report without prior permission of the institute will be considered illegal and actionable.

DATE:

Pramod Kumar Yadav ENR: 5080 (Marketing) 16th BATCH Deo Kumar ENR: 5047 (Marketing) 16th BATCH

TABLE OF CONTENT
CHAPTER 1: INTRODUCTION ...007 1.1 Overview of the beverage industry ..007 CHAPTER 2: Company profile of United Beverage Group24 2.1 - History..24 2.2 Product mix 43 2.3 Product line..45 2.4 Vision, mission, objective...56 2.5 Quality statement.57 CHAPTER 3: Business of United Beverage Group58 3.1 Beverage alcohol.58 3.2 Aviation. .75 3.3 Fertilizer..96 3.4 Engineering...131 CHAPTER 4: Competitors133 4.1 Company profile133 4.2 Locations...159 4.3 Turnover....165 4.4 Manufacturing units..168 CHAPTER 5: Brand awareness among public..176 5.1 Brand knowledge...176 5.2 Brand image..178 5.3 Brand loyalty.196 CHAPTER 6: Distribution channel201 6.1 Breweries...201 6.2 Retailer......213 6.3 Consumer..217 CHAPTER 7: Marketing strategies218 7.1 Product...233 7.2 Price...234 7.3 Place..235 7.4 Promotion.236 7.5 Different seasonal offers...242 CHAPTER 8: Financial aspect...243 8.1 Corporate governance.. 243 5

8.2 Code of conduct247 8.3 Quarterly financials..251 8.4 Annual report257 CHAPTER 9: Beyond the business. 9.1 Corporate social responsibility269 CHAPTER 12: CONCLUSION. 271 FINDINGS AND LIMITATIONS274 SUGGESTION AND RECOMMENDATION275 BIBLIOGRAPHY.276

CHAPTER 1: INTRODUCTION
1.1 OVERVIEW OF THE BEVERAGE INDUSTRY
The Indian beer industry has been witnessing steady growth of 10 - 17% per year over the last ten years. The rate of growth has increased in recent years, with volumes passing 170m cases during the 2008-2009 financial years. With the average age of the population on the decrease and income levels on the increase, the popularity of beer in the country continues to rise. The Indian beer industry has witnessed a big change during the last five years. The industry was previously dominated by competition between the Vijay Mallyacontrolled United Breweries Group and the Manu Chabbria-controlled Shaw Wallace. The scenario changed, however, with the entry of. The international beer giant started by acquiring small breweries in the south but then completely changed the landscape with the acquisition of Shaw Wallaces beer portfolio for a reported US$264m in 2003. This gave SABMiller ownership of strong brands like Hawards 5000, along with its existing brands. After the acquisition, SABMiller focused on spreading its footprint across India, including opening new breweries in states where Shaw Wallace did not have a presence. On the other hand, rival UB bolstered its presence in the country in 1999 by creating sister company Millennium Alcobev, which produces beer brands like Zingaro and Sandpiper. Today, this is a joint-venture between the UB Group and Scottish & Newcastle (S&N). The company started as a 61:39 joint venture between the UB Group and Ravi Jain, a friend of Mallyas. In January 2002, this was expanded to accommodate Scottish & Newcastle (when it became a 40:40:20 joint venture between UB, S&N and Ravi Jain). In early 2006, Ravi Jain ceased to be an equity partner and Millennium Alcobev became a 50:50 joint-venture. The SABMiller acquisition of Shaw Wallace gave the company a good position in the strong beer sector (beer with an alcohol content of 6% or more) which is the fastest-growing segment in the market. While SABMillers Haywards 5000 is the biggest-selling strong beer brand (a fact hotly contested by UB Group), UBs Kingfisher is the largest-selling beer brand overall in the market. UB has been making inroads into the strong beer segment during the last year. Kingfisher Strong, whose sales five years ago were only equal to one-fifth of Haywards 5000, is now running neck and neck with Haywards indeed both companies claim market leadership for their brands. Between them, UB along with Millennium Alcobev and SABMiller account for nearly 85% of the Indian beer market. There are some smaller, regional players 7

too; of them, one of the most important is Mount Shivalik Breweries, which owns brands like Thunderbolt. Mohan Meakin is also a strong regional player in the country, though family rifts have prompted the family-owned business to put itself up for sale. Consensus between family members is proving difficult to reach, but, with companies such as SABMiller, UB and APB showing interest, the companys fate should be decided soon. In a country that still frowns on drinking, about 220 million cases of beer and branded liquor were sold last year and annual sales of alcoholic beverages are growing by about 20 percent annually. More than half of India's 1.1 billion population is below the age of 25 years and incomes are rising, but strict government controls on advertising, manufacturing capacities, distribution, retail and pricing pose a big challenge to firms seeking growth. An upwardly mobile young population with a propensity to spend is guzzling booze like never before. Consumption of beer has jumped 51% from 70 million cases in 2002 to 105 million cases in 2006 while consumption of Indian made foreign liquor (IMFL) grew 53% to 115 million cases during the period. The country has one of the youngest population, with around 50% citizens below 25 years. A free media and increasing exposure to western influences have lifted the stigma off liquor consumption, while rising income is stoking the shift from country liquor to more refined varieties, said a report by SSKI Research. Wine makes up only a fraction of the $1.8-billion alcoholic drinks market, but is growing nearly three times as fast as whisky or rum, the traditional favorites. India's top three wine makers have more than two-thirds of the market of more than 5 million bottles, valued at $60 million, and they are seeing bigger demand even for pricey sparkling wine. One estimate has it that India's total wine market is around 0.9 million cases. Of this, imported wine constitutes 150,000 cases. In a global perspective, this is really minuscule. The wine market in the US is estimated at 250 million cases and in France, around 320 million cases. To the savvy marketer, this obviously translates into a huge opportunity. Per capita consumption of beer, at 0.7 liter, is among the lowest in the Asia Pacific, and imported beer brands have less than 0.5 per cent of a market forecast to grow nearly 20 per cent annually to 1.2 million liters by 2010, or worth $22 billion. However, India has quietly emerged as the largest international whisky market, toppling the US by volume. Industry data for '05-06 suggests that Indian whiskies, non-matured alcohols mostly made from molasses, and hence not considered whisky by the Scotch Whisky Association (SWA), reported depletions of about 60m cases (9-litre each). In comparison, the US recorded combined sales of Bourbon, American and Scotch whiskies at 48-50m cases, putting it one notch below India. 8

Indian whiskies account for 98% of domestic whisky consumption, reporting 810% growth annually, which makes it one among the fastest growing whisky markets anywhere in the world. The industry's prospects are attractive, given the inherent strengths of the incumbents, the high barriers to entry for new players in terms of procuring licenses and tying up nation-wide bottling arrangements and the long gestation period involved in building brands, especially as there is a ban on direct advertising. The fast growth in the domestic alcohol market has caught the attention of a number of domestic and international firms. That has already drawn the likes of top drinks maker Diageo, Pernod Ricard, LVMH's Moet Hennessey and SABMiller, with Anheuser-Busch Companies Inc and Danish brewer Carlsberg also firming up entry plans. Liquor major Seagram has most recently entered the locally produced wine segment, while the nascent industry has also seen an increase in private equity interest this year. In the beer business, leading names such as Anheuser-Busch and In Bev, to name just two, could be potential entrants, what with several breweries under construction in the northern States. On the spirits side, Diageo, the largest drinks company in the world, has already inked a joint venture with Radico Khaitan for a new line of products. In time, choice, it seems, will be the buzzword for the Indian consumer. United Spirits is a good play on the Indian consumption theme, more so after the consolidation has bestowed on it significant size and scale. But the stock's sharp run-up in the homestretch to the completion of the restructuring exercise warns to adopt a cautious stance. An entry into the stock on dips from the current level can be made. The complexion of the liquor business in India changed with the UB Group finally acquiring the spirits businesses of both Shaw Wallace and Herbertsons. These two outfits, along with a few more, have been folded into McDowell's to form United Spirits, which will control about 50 per cent of the total spirits market. Apart from giving the business scale, the acquisition also provides the UB Group combine with enough headway to change it cost structure, be it in rationalizing facilities, phasing out tail-end brands or optimizing advertising expenses. The UB Group is keen on taking a "re-look" at its manufacturing activities as part of the group's plan to become a global leader in spirit business. According to the President & Chief Financial Officer of the UB Group, Ravi Nedungadi, "We have an aggressive plan in the spirits business. In fact, $1 billion have been earmarked for overseas acquisition." He indicated that the group was considering the possibility of acquiring a scotch whisky-making unit in Scotland. Similarly, it was on the lookout for vineyards in South Africa and Australia. Investors can consider buying into Radico Khaitan in small lots. The company has made significant strides over the past few years and has a 12 percent market share. Radico Khaitan says that in the current year (2006-07) and next year (2007-08) he 9

expects the top line to grow by 25 percent in turnover, and the bottom-line by 2025 percent. At the moment he has no active plans for manufacturing wine in India; "the wine market is not large, it is only half-a-million cases or 5 percent of the total liquor market which is 100 million cases. In 3-5 years. Radico is to become an Indian company with a very strong global presence. Market Size - A 70 million cases market Market growing at 10-12 % per annum South and west zones account for bulk (> 75 %) of this market Major beer consuming centers - Maharashtra (Mumbai) Karnataka (Bangalore); Tamilnadu (Chennai)

Industry Structure
Minimum economic size : 5000 kilo liters; 15000 kilo liters for NRI proposals Around 40 units in organised sector, mostly regional players 4 large breweries have 84% of the market Major beer brands (manufacturers) - King Fisher, Kalyani Black Label (UB Group), Golden Eagle (Mohan Meakins), Haywards (Shaw Wallace), London Pilsner (Associated Breweries and Distilleries) Foreign brands - Strohs, Fosters Licensing required except for smaller units employing under 50 persons or not using power Cap on additional capacities (frequently circumvented under pretext of modernization) Installed Capacities, Production In Hecta liters Beer Installed Capacities (1997-98) Production (1998-99) 6,750,000 HL 4,352,570 HL Duties Import duty on beer - 100 % basic; 10 % surcharge; SAD : 4 % Sales taxes - 45% , 5% cess (State subject). Excise Duty - Rs. 4/ Bulk litre in Karnataka (State subject) Fortified wines are created by adding a distilled beverage (often brandy) to a wine.

Serving Neat or straight The spirit is served at room temperature without any additional ingredient. Straight up This term refers to an alcoholic drink that is shaken or stirred with ice, strained, and served in a stemmed glass. On the rocks The spirit is served over ice. The spirit is served with water. 10

The spirit is served with a simple mixer such as club soda, tonic water, juice, or cola. The spirit is served as an ingredient of a cocktail. The spirit is served with water poured over sugar (as with absinthe) Collection of absinthe spoons. These specialized spoons are used to hold the sugar cube over which ice-cold water is poured to dilute the absinthe. Note the slot on the handle that allows the spoon to rest securely on the rim of the glass. Traditionally, absinthe is prepared by placing a sugar cube on top of a specially designed slotted spoon and then placing the spoon on the glass which has been filled with a shot of absinthe. Ice-cold water is then poured or dripped over the sugar cube so that the water is slowly and evenly displaced into the absinthe, typically 1 part absinthe and 3 to 5 parts water. During this process, components not soluble in water (mainly those from anise, fennel, and star anise) come out of solution and cloud the drink. The resulting milky opalescence is called the louche " or "shady". Releasing these components allows herbal aromas and flavours to "blossom" or "bloom" and brings out subtleties originally over-powered by the anise. This is often referred to as "The French Method." "The Bohemian Method" is an alternative that is popular primarily due to the use of fire. Like the French method, a sugar cube is placed on a slotted spoon over a glass containing one shot of absinthe. The difference is that the sugar is presoaked in alcohol, usually more absinthe, and then set ablaze. The flaming sugar cube is then dropped into the glass igniting the absinthe. Finally, a shot glass full of water is added to douse the flames. This method tends to produce a stronger drink than the French method. A variant of "The Bohemian Method" is to allow the fire to burn itself out. This variant, called "Cooking the Absinthe" or "Flaming Green Fairy," removes much but not all of the alcohol. Slow drip absinthe fountain Originally a waiter would serve a dose of absinthe, ice water in a carafe, and sugar separately, and the drinker would prepare it to his preference. With increased popularity, the absinthe fountain, a large jar of ice water on a base with spigots, came into use. It allowed a number of drinks to be prepared at once, and with a hands-free drip, patrons were able to socialize while louching a glass. Although many bars served absinthe in standard glasses, a number of glasses were specifically made for absinthe. These had a dose line, bulge, or bubble in the lower portion denoting how much absinthe should be poured in. One "dose" of absinthe is around 1 ounce (30 ml), and most glasses used this as the standard, with some drinkers using as much as 1 ounces (45 ml). In addition to being drunk with water poured over sugar, absinthe was a common cocktail ingredient in both the United Kingdom and the United States, and continues to be a popular ingredient today. One of the most famous of these is Ernest Hemingways "Death in the Afternoon" cocktail, a concoction he contributed to a 1935 collection of celebrity recipes. His directions are as follows: "Pour one jigger absinthe into a Champagne glass. Add iced Champagne until it attains the proper opalescent milkiness. Drink three to five of these slowly. 11

WHAT IS LIQUOR
A distilled beverage, liquor, or spirit is a drinkable liquid containing ethanol that is produced by distilling, or less commonly freeze distilling, fermented grain, fruit, or vegetables. This excludes uninstalled fermented beverages such as beer and wine. The term hard liquor is often used to distinguish distilled beverages from (implicitly weaker) uninstalled ones. Beer and wine are limited to a maximum alcohol content of about 15% ABV, as most yeasts cannot reproduce when the concentration of alcohol is above this level; consequently, fermentation ceases at that point. The term spirit refers to a distilled beverage that contains no added sugar and has at least 20% ABV. Popular spirits include brandy, fruit brandy(also known as eaude-vie / Schnapps), gin, rum, tequila, vodka, and whisky. Distilled beverages that are bottled with added sugar and added flavorings, such as Grand Marnier, Frangelico, and American schnapps, are liqueurs. In common usage, the distinction between spirits and liqueurs is widely unknown or ignored; consequently all alcoholic beverages other than beer and wine are generally referred to simply as spirits.

HISTORY OF LIQUOR
The origin of liquor and its close relative liquid, was the Latin verb liquere, meaning to be fluid. According to the Oxford English Dictionary, an early use of the word in the English language, meaning simply "a liquid," can be dated to 1225. The first use that the OED mentions in reference to a liquid for drinking occurred in the early- to mid-1300s. Its use as a term for an intoxicating alcoholic drink appeared in the 16th century. The origin of "spirit" in reference to alcohol stems from Middle Eastern alchemy. These alchemists were more involved in medical elixirs than in creating gold from lead. The vapors given off and collected during some of their alchemical processes were described as being the spirits of the original object. When processes akin to distillation were carried out by accident alcohol was produced and the result known as a spirit. The first evidence of distillation comes from Babylonia and dates from the 2nd millennium B.C. Specially shaped clay pots were used to extract small amounts of distilled alcohol through natural cooling for use in perfumes. By the 3rd century A.D., alchemists in Alexandria, Egypt, may have used an early form of distillation to produce alcohol for sublimation or for coloring metal. Alcohol was distilled for the first time by Persian chemists in the 8th and 9th centuries. The development of the still with cooled collectornecessary for the efficient distillation of spirits without freezingwas an invention of alchemists during this time. In particular, Jbiribn Hayyn (721815) invented the alembic still. He observed that heated wine from this still released a flammable vapor, which he described as "of little use, but of great importance to science". Not much later Razi (864930) described the distillation of alcohol and its use in medicine. 12

By that time, distilled spirits had become fairly popular beverages and the poet Abu Nuwas describes a wine that "has the colour of rain-water but is as hot inside the ribs as a burning firebrand". The terms "alembic" and "alcohol," and possibly the metaphors "spirit" and aqua vitae (water of life) for the distilled product, can be traced to Arabic alchemy. Names like "life water" have continued to be the inspiration for the names of several types of beverages, like Gaelic whisky, Scandinavian akvavit and French eaux-de-vie, and possibly vodka, as vodka is a diminutive of voda (water). Freeze distillation, the "Mongolian still," is known to have been in use in Central Asia sometime in the early Middle Ages. This method involves freezing the alcoholic beverage and removing the ice. The freezing method had limitations in geography and implementation and consequently was not widely used. A notable drawback to this technique is that it concentrates toxins such as methanol and fusel alcohols, rather than reducing concentrations. Distilled alcoholic beverages first appeared in Europe in the 12th century among alchemists who were more interested in brewing medical elixirs than in making gold from lead. They first appeared under the name aqua ardens (burning water) in the Compendium Salerni from the medical school at Salerno. The production method was written in code, suggesting that it was being kept secret. Taddeo Alderotti in his Consilia medicinalis referred to serpente, which are believed to have been the coiled tube of a still. In 1437, burned water (brandy) was mentioned in the records of the county of Katzenelnbogen in Germany. It was served in a tall, narrow glass called goderulffe. Paracelsus gave alcohol its modern name, taking it from an Arabic word that means "finely divided," in reference to what is done to wine. His test was to burn a spoonful without leaving any residue. Other ways of testing were to burn a cloth soaked in it without actually harming the cloth. In both cases, to achieve this effect the alcohol had to have been at least 95 percent, close to the maximum concentration attainable through distillation. Claims upon the origin of specific beverages are controversial, often invoking national pride, but they are plausible after the 12th century A.D. when Irish whiskey and German brandy became available. These spirits would have had a much lower alcohol content (about 40% ABV) than the alchemists' pure distillations, and they were likely first thought of as medicinal elixirs. Consumption of distilled beverages rose dramatically in Europe in and after the mid 14th century, when distilled liquors were commonly used as remedies for the Black Death. Around 1400 it was discovered how to distill spirits from wheat, barley, and rye beers; even sawdust was used to make alcohol, a much cheaper option than grapes. Thus began the "national" drinks of Europe: jenever (Belgium and the Netherlands), gin (England), schnapps (Germany), grappa (Italy), (Scandinavia), vodka (Russia and Poland), rakia (the Balkans), poitn (Ireland). The actual names only emerged in the 16th century but the drinks were well known prior to that date. 13

The basic process of distillation has not changed since the 8th century. Freeze distillation also remained in limited use, for example during the American colonial period applejack was made from cider using this method. There have been many changes in the methods used to prepare organic material for the still, and the ways the distilled beverage is finished and marketed. Knowledge of the principles of sanitation and access to standardised yeast strains have improved the quality of the base ingredient; larger, more efficient stills produce more product per square foot and reduce waste; ingredients such as corn, rice, and potatoes have been called into service as inexpensive replacements for traditional grains and fruit. For tequila, the blue agave plant is used. Chemists have discovered the scientific principles behind aging, and have devised ways to accelerate aging without introducing harsh flavors. Modern filters have allowed distillers to remove unwanted residue and produce smoother finished products. Most of all, marketing has developed a worldwide market for distilled beverages among populations that previously did not drink spirits. Micro distilling is a trend that began to develop in the United States following the emergence and immense popularity of micro brewing and craft beer in the last decades of the 20th century. It is specifically differentiated from mega distilleries in the quantity, and arguably quality, of output. In most jurisdictions, including those that allow unlicensed individuals to make their own beer and wine, it is illegal to distill beverage alcohol without a license with the notable exception of New Zealand, where personal alcohol distillation is legal (although selling still requires an appropriate licence). Although illegal, moon shining has a long tradition in some locations. Absinthe (ab-sinth) is historically described as a distilled, highly alcoholic (45 74% ABV) beverage. It is an anise-flavored spirit derived from herbs, including the flowers and leaves of the herb Artemisia absinthium, commonly referred to as grande wormwood. Absinthe traditionally has a natural green colour but can also be colourless. It is commonly referred to in historical literature as the Green Fairy. Although it is sometimes mistakenly called a liqueur, absinthe is not bottled with added sugar and is therefore classified as a spirit. Absinthe is unusual among spirits in that it is bottled at a very high proof but is normally diluted with water when consumed. Absinthe originated in the canton of Neuchtel in Switzerland. It achieved great popularity as an alcoholic drink in late 19th- and early 20th-century France, particularly among Parisian artists and writers. Owing in part to its association with bohemian culture, absinthe was opposed by social conservatives and prohibitionists. Charles Baudelaire, Paul Verlaine, Arthur Rimbaud, Henri de Toulouse-Lautrec, Amedeo Modigliani, Vincent van Gogh, Oscar Wilde, Aleister Crowley, and Alfred Jarry were all notorious "bad men" of that day who were (or were thought to be) devotees of the Green Fairy. Absinthe has been portrayed as a dangerously addictive psychoactive drug. The chemical thujone, present in small quantities, was singled out and blamed for its alleged harmful effects. By 1915, absinthe had been banned in the United States 14

and in most European countries except the United Kingdom, Sweden, Spain, Portugal, Denmark, Andorra and the Austro-Hungarian Empire. Although absinthe was vilified, no evidence has shown that it is any more dangerous than ordinary spirits. Its psychoactive properties, apart from those of alcohol, have been much exaggerated. A revival of absinthe began in the 1990s, when countries in the European Union began to reauthorize its manufacture and sale. As of February 2008, nearly 200 brands of absinthe were being produced in a dozen countries, most notably in France, Switzerland, Spain, and the Czech Republic. Commercial distillation of absinthe in the United States resumed in 2007. The French word absinthe can refer either to the alcoholic beverage or, less commonly, to the actual wormwood plant grande absinthe being Artemisia absinthium, and petite absinthe being Artemisia pontica. The Latin name artemisia comes from Artemis, the ancient Greek goddess of the hunt. Absinthe is derived from the Latin absinthium, which in turn is a stylization of the Greek, for wormwood. The use of Artemisia absinthium in a drink is attested in Lucretius De Rerum Natura (I 936950), where Lucretius indicates that a drink containing wormwood is given as medicine to children in a cup with honey on the brim to make it drinkable. This was a metaphor for the presentation of complex ideas in poetic form. Some claim that the word means undrinkable in Greek, but it may instead be linked to the Persian root spand or aspand, or the variant esfand, which meant Peganum harmala, also called Syrian Rue although it is not actually a variety of rue, another famously bitter herb. That Artemisia absinthium was commonly burned as a protective offering may suggest that its origins lie in the reconstructed Proto-Indo-European root spend, meaning to perform a ritual or make an offering. Whether the word was a borrowing from Persian into Greek, or from a common ancestor of both, is unclear. Variant spellings of absinthe are absinth, absynthe, and absenta. Absinth is a spelling variant used by central European distillers. It is the usual name for absinthe produced in the Czech Republic and in Germany, and has become associated with Bohemian style absinthes. The precise origin of absinthe is unclear. The medical use of wormwood dates back to ancient Egypt and is mentioned in the Ebers Papyrus, circa 1550 BC. Wormwood extracts and wine-soaked wormwood leaves were used as remedies by the ancient Greeks. Moreover, there is evidence of the existence of a wormwood-flavoured wine, absinthites onions, in ancient Greece. The first clear evidence of absinthe in the modern sense of a distilled spirit containing green anise and fennel, however, dates to the 18th century. According to popular legend, absinthe began as an all-purpose patent remedy created by Dr. Pierre Ordinaire, a French doctor living in Couvet, Switzerland, around 1792 but the exact date varies by account. Ordinaires recipe was passed on to the Henriod sisters of Couvet, who sold absinthe as a medicinal elixir. By other accounts, the Henriod sisters may have been making the elixir before Ordinaires arrival. In either case, a certain Major Dubied acquired the formula from the sisters and in 15

1797, with his son Marcellin and son-in-law Henry-Louis Pernod, opened the first absinthe distillery, Dubied Pre et Fils, in Couvet. In 1805 they built a second distillery in Pontarlier, France, under the new company name Maison Pernod Fils. Pernod Fils remained one of the most popular brands of absinthe up until the ban of the drink in France in 1914. Absinthes popularity grew steadily through the 1840s, when absinthe was given to French troops as a malaria treatment. When the troops returned home, they brought their taste for absinthe with them. It became so popular in bars, bistros, cafs, and cabarets that, by the 1860s, the hour of 5 p.m. was called the green hour. Absinthe was favoured by all social classes, from the wealthy bourgeoisie to poor artists and ordinary working class people. By the 1880s, mass production had caused the price of absinthe to drop sharply. By 1910, the French were drinking 36 million liters of absinthe per year (compared to their consumption of almost 5 billion litres of wine). Absinthe has been popular outside of France, including in Spain, New Orleans and the Czech Republic. Absinthe was never banned in Spain, and its production and consumption has never ceased. During the early 20th century it gained a temporary spike in popularity corresponding with the French influenced Art Nouveau and Modernism aesthetic movements. New Orleans also has a historical connection to absinthe consumption. The city has a prominent landmark called the Old Absinthe House, located on Bourbon Street. Originally called the Absinthe Room, it was opened in 1874 by a Catalan bartender named Cayetano Ferrer. The building was frequented by many famous people, including Mark Twain, Oscar Wilde, Franklin Roosevelt, Aleister Crowley and Frank Sinatra. Absinthe has been consumed in the Czech Republic which was then part of AustriaHungary since at least 1888, notably by Czech artists, some of whom had an affinity for Paris, frequenting Pragues famous Cafe Slavia. Its wider appeal in Bohemia itself is uncertain, though it was sold in and around Prague. There is evidence that at least one local liquor distillery in Bohemia was making absinthe at the turn of the 20th century. Spurred by the temperance movement and the winemakers associations, absinthe was publicly associated with violent crimes and social disorder. Absinthe makes you crazy and criminal, provokes epilepsy and tuberculosis, and has killed thousands of French people. It makes a ferocious beast of man, a martyr of woman, and a degenerate of the infant, it disorganizes and ruins the family and menaces the future of the In 1905, it was reported that Jean Lanfray murdered his family and tried to kill himself after drinking absinthe. The fact that Lanfray was an alcoholic who had consumed much more than his usual two glasses of absinthe in the morning was either overlooked or ignored; the murders were blamed solely on absinthe. The murders were the last straw, and a petition to ban absinthe in Switzerland was signed by more than 82,000 people. The prohibition of absinthe was then written into the Swiss constitution in 1907. 16

In 1906, Belgium and Brazil banned the sale and distribution of absinthe, although they were not the first. Absinthe had been banned as early as 1898 in the colony of the Congo Free State. The Netherlands banned absinthe in 1909, Switzerland in 1910, the United States in 1912, and France in 1914. The prohibition of absinthe in France led to increased popularity of pastis and of ouzo, to a lesser extent, anise-flavoured spirits that do not contain wormwood. The Pernod brand resumed production at the Banus distillery in Catalonia, Spain, where absinthe was still legal, but slow sales in the 1960s eventually caused them to shut it down. In Switzerland, the ban drove absinthe underground. Clandestine home distillers produced absinthe, focusing on la Bleue, which was easier to conceal from the authorities. Many countries never banned absinthe, notably Britain, where it had not been as popular as in continental Europe. In the 1990s an importer, BBH Spirits, realized that there was no UK law prohibiting the sale of absinthe, as it had never been banned there. They began to import Hills Absinth not a true Absinthe from the Czech Republic, which encouraged a modern resurgence in absinthes popularity. Absinthe had also never been banned in other European countries where it was never popular. As a result, it is in these countries where absinthe first began to reappear during the revival in the 1990s. These absinthes mostly Czech, Spanish, and Portuguese brands are generally of recent origin, typically consist of Bohemian-style products, and are therefore considered by absinthe connoisseurs to be of inferior quality. La Fe Absinthe, released in 2000, was the first brand labelled absinthe distilled and bottled in France since the 1914 ban, initially for export from France, but now one of roughly 50 French-produced absinthes available in France. French absinthes now must be labelled as boissons spiritueuse aux plantes d'absinthe to be sold within that country as per the most recent guidelines. Absinthes produced in other countries must be relabelled to meet these same guidelines to be legally imported and sold within France. Absinthe has a deep history in the Northern Catalan region encompassing Barcelona, Tarragona, Lleida, and a section of the Pyrenees mountains. While the drink was never officially banned in Spain, it fell out of favour from the early 1940s to present day. Since 2007 it has enjoyed a significant resurgence in the region and has at least one major export brand. Absinthe has never been illegal to import or manufacture in Australia. Importation requires a permit under the Customs (Prohibited Imports) Regulation 1956 due to a restriction on importing any product containing oil of wormwood. In 2000 there was an amendment by Foods Standards Australia New Zealand (FSANZ) as part of a new consolidation of the Food Code across Australia and New Zealand. This made all wormwood species prohibited herbs for food purposes under Food Standard 1.4.4. Prohibited and Restricted Plants and Fungi, however it was found to be inconsistent with other parts of the pre-existing Food Code.[36][37] The proposed amendment was withdrawn in 2002 during the transition between the two Codes, thereby continuing to allow absinthe manufacture and importation 17

through the existing permit-based system. These events were erroneously reported by the media as Australia having reclassified it from a prohibited product to a restricted product. There is now an Australian-produced brand of absinthe called Moulin Rooz. In the Netherlands, restrictions on the manufacture and sale of Absinthe were successfully challenged by the Amsterdam wine seller Menno Boorsma in July 2004, making absinthe legal once again. Belgium, as part of an effort to simplify its laws, removed its absinthe law on 1 January 2005, citing (as did the Dutch judge) European food regulations as sufficient to render the law unnecessary and in conflict with the spirit of the Single European Market). In Switzerland, the constitutional ban on absinthe was repealed in 2000 during an overhaul of the national constitution, although the prohibition was written into ordinary law instead. Later that law was repealed, so from 1 March 2005, absinthe was again legal in its country of origin. Absinthe is now not only sold but is once again distilled in its Val-de-Travers birthplace, with Kbler and La Clandestine Absinthe among the first new brands to re-emerge. On March 5, 2007, the French Lucid brand became the first genuine absinthe to receive a COLA Certificate of Label Approval for importation into the United States since 1912, following independent efforts by representatives from Lucid and Kbler to topple the long-standing U.S. ban. In December 2007, St. George Absinthe Verte, produced by St. George Spirits of Alameda, California, became the first brand of American-made absinthe produced in the United States since the ban. Since that time, other micro-distilleries have started making small batches of high-quality absinthe in the U.S.

GROWTH OF LIQUOR INDUSTRY

The consumption of alcohol is perhaps as old as civilization itself, and has played a significant role in religion, medicine and culture. Throughout the history of the world, drinking has been associated with revelry and feasting. Over the years, alcohol became an integral part of 'celebrations' - birthdays, holidays and religious events. Alcohol is believed to have the ability to give the consumer an overall sense of well-being. It is also known to help people overcome their inhibitions . Regulations: Currently, most countries do not have a legal definition of absinthe (unlike Scotch whisky or cognac). Manufacturers can label a product 'absinthe' or 'absinth', whether or not it matches the traditional definition. Due to many countries never banning absinthe, not every country has regulations specifically governing it. Australia Bitters can contain a maximum 35 mg/kg thujone, while other alcoholic beverages can contain a maximum 10 mg/kg of thujone. In Australia, import and sales require a special permit although absinthe is readily available in many bottle shops. Regulation 5H of the Customs (Prohibited Imports) Regulations 1956 the 18

Regulations prohibits the importation of Absinthe (Schedule 8), unless the permission (in writing) of the Secretary or an authorized person has been granted permission to import the goods and the permission has been produced to the Collector. Item 12A of Schedule 8 of the Regulations, refers to "oil of wormwood, being an essential oil obtained from plants of the genus Artemisia, and preparations containing oil of wormwood." The administrative arrangements include the Secretary and authorized officers (appropriately delegated TGA officers) of the Therapeutic Goods Administration may grant permission to import absinthe. The Australian Customs and Border Protection Service is the Collector for the importation of Schedule 8 goods. The domestic production and sale of Absinthe is regulated by State licensing laws.

Canada This section needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (May 2008) In Canada, liquor laws are established by the various provincial governments. As with any spirit, importation by individuals for personal use is allowed, provided that conditions for the individual's duration outside the country are satisfied. (Importation is a federal matter, and is enforced by the Canada Border Services Agency). British Columbia: no established limits on thujone content Alberta, Nova Scotia, Ontario: 10 mg/kg Manitoba: 68 mg Quebec: 5 mg/kg New Brunswick: no absinthe sold Newfoundland and Labrador: no absinthe sold Absinthe is not sold in some provinces, although, in Saskatchewan, an individual is permitted to import one case (usually 12 bottles x 750 ml or 8 x 1L) of any liquor. Individual provincial liquor boards must approve each product before it may be sold. Production of spirits in Canada is provincially regulated. Okanagan Spirits in British Columbia released the Taboo brand in 2007: this is possibly the first commercial absinthe crafted in Canada. Brazil Absinthe was prohibited in Brazil until 2007, but the beverage must obey the liquor laws established by the Brazilian government. The Absinthe sold in Brazil must not contain more than 53.8% of alcohol. European Union The European Union permits a maximum thujone level of 10 mg/kg in alcoholic beverages with more than 25% ABV, and 35 mg/kg in alcohol labelled as bitters. Member countries regulate absinthe production within this framework. Sale of absinthe is permitted in all EU countries unless they further regulate it. France 19

In addition to EU standards, products explicitly called 'absinthe' cannot be sold in France, although they can be produced for export. Absinthe is now commonly labelled as spiritueux base de plantes dabsinthe ('wormwood-based spirits'). France also regulates fenchone, a chemical in the herb fennel, to 5 mg/l. This makes many brands of Swiss absinthe illegal without reformulation. Republic of Georgia It is legal to produce and sell absinthe in the Republic of Georgia, which has several absinthe production facilities. Germany A ban on absinthe was enacted in Germany on 27 March 1923. In addition to banning the production of and commercial trade in absinthe, the law went so far as to prohibit the distribution of printed matter that provided details of its production. The original ban was lifted in 1981, but the use of Artemisia absinthium as a flavouring agent remained prohibited. On 27 September 1991, Germany adopted the European Union's standards of 1988, which effectively re-legalized absinthe.[86] Unlike Switzerland and France, there are no further restrictions. New Zealand Although the substance is not banned at national level, some local authorities have banned it. The latest is Mataura in Southland. The ban came in August 2008 after several issues of misuse drew public and police attention. One incident resulted in breathing difficulties and hospitalization of a 17-year-old for alcohol poisoning. The particular brand of absinthe that caused these effects contained 89.9% vol. alc. The sale and production of absinthe has never been prohibited in Sweden. However, the only store that may sell alcoholic beverages containing more than 3.5% alcohol by volume is the government-owned chain of liquor stores called Systembolaget. Systembolaget did not import or sell absinthe for many years. In Switzerland, the sale and production of absinthe was prohibited from 1910 to 2005; the ban was lifted on 1 March 2005. To be legally made or sold in Switzerland, absinthe must be distilled and must be either uncoloured or naturally coloured. The prevailing consensus of interpretation of United States law and regulations among American absinthe connoisseurs is that, with the revision of thujone levels by the Alcohol and Tobacco Tax and Trade Bureau (TTB), it is now legal to purchase such a product for personal use in the U.S. According to the US Food and Drug Administration (FDA) food and beverages that contain Artemisia species must be thujone free. Thujone free is defined as containing less than 10ppm thujone. There is no corresponding US Drug Enforcement Administration (DEA) regulation. Regarding importation of absinthe, U.S. Customs and Border Protection allows importation of absinthe products subject to the following restrictions: The product must be thujone-free as described above. The name "absinthe" can neither be the brand name nor stand alone on the label, and the packaging cannot "project images of hallucinogenic, psychotropic or mind-altering effects." 20

Absinthe imported in violation of these regulations can be seized. Absinthe can be and occasionally is seized by United States Customs and Border Protection if it appears to be for human consumption. The Absinthe (Prohibition) Act 1915, passed in the New Hebrides, has never been repealed, and is included in the 1988 Vanuatu consolidated legislation, and contains the following all-encompassing restriction: The manufacture, importation, circulation and sale wholesale or by retail of absinthe or similar liquors in Vanuatu shall be prohibLiquor Types Before we introduce the different liquors, first a little about alcohol proof. In the US proof is exactly double the alcohol content. Therefore if the bottle is 80 proof, it contains 40% alcohol. The term originated during the 18th century in Britain when sailors would "proof" their rum rations by dousing gunpowder in them to see if it would ignite. They did this to make sure their rations had not been watered down. Consumed in wide varieties across the world, alcohol denotes any drink that has intoxicating properties. Alcohol binds to the receptors on neurons throughout the body. It acts on those regions of the brain that control the autonomic nervous system, responsible for controlling breathing, heartbeat, and other functions over which a person has no conscious control. The action on these cells explains the physical dependence. However, alcohol also affects the brain systems that control motivation and gives vivid, positive feelings and memories of this experience by the release of a neurotransmitter called dopamine. This 'feel-good' effect is what causes people to drink compulsorily. The moderate use of alcoholic beverages by adults is considered normal and acceptable in most countries. However, it has become the most widely abused substance in the world. In fact, alcoholism is now regarded as a disease in many countries. Alcoholism is a chronic, often progressive disease characterized by excessive and repetitive consumption of alcohol despite a decline in the health and social/economic functioning of the individual. Addiction leads to dependence, which leads to physiological problems, if a person stops consuming alcohol. In 1990, 62 million people worldwide were alcohol dependent. The ills of alcohol were first documented in England in the 18th century. By the end of the 20th century, studies around the world had confirmed that alcohol consumption often led to addiction, increased the likelihood of various types of injury, and increased the chances of heart disease, cardiovascular disease, liver problems, various cancers and nervous system disorders.

In addition, in developing countries, alcoholism led to serious social problems such as increase in domestic violence, poverty and crime rates. Though analysts have also claimed that mild to moderate alcohol consumption could actually result in a decreased rate of coronary disease, they invariably add that excessive consumption is definitely harmful. 21

Not surprisingly, alcohol reportedly accounted for 5-10% of the global disease burden and resulted in 2 million deaths annually worldwide. Increasing awareness about the problems associated with alcohol induced governments to introduce prohibition as a tool to control its consumption. Prohibition refers to the legal prevention of the manufacture, sale, or transportation of alcoholic beverages with the aim of obtaining partial or total abstinence through legal means. The history of prohibition is also almost as old as alcohol itself with reports of attempts made in Aztec society, ancient China and feudal Japan. Over the centuries, governments have experimented with prohibition in the Polynesian islands, Iceland, Finland, Norway, Sweden, Russia and Canada. However, only a few countries mostly Islamic nations have been able to successfully implement prohibition at a national level. Most countries that have experimented with the ban soon lifted it. Finland, for instance, adopted prohibition in 1919 and repealed it in 1931, and the United States adopted it in 1919 and repealed it in 1933 (Refer Box). Indian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters. Major National Players United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitan who entered the IMFL space some 8 years back has already cornered 12 % market share and gaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc. International players The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo has tied up with Radico for entering Indian markets in brown spirits) Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth and more people entering the drinking club with newly obtained prosperity or from up trading from the existing brand. Since liberalization, the economy has been growing at steady pace with per capita income rising from INR 23,222 in 2005 to INR 6,012 in 1991. Shift from country liquor to IMFL is expected with rising per capita income and limiting the sale of country liquor by states due to hygiene factor. Industry has one of the lowest per capita consumption of both Liquor and Beer and also since the margins are amongst the lowest. 22

In modern times, beer began to be exported to India in the early days of the British Empire the early 1700s. The demand for beer in the hot climate of many parts of India by the British administrators and the troops was so great that it led to the creation of a completely new style of beer by George Hodgson in his London brewery India Pale Ale also known as IPA. IPA is a strong, highly hopped ale designed to survive the five month ocean voyage to India without spoiling. India Pale Ale was shipped with every voyage for over a century and became very popular in Britain and North America. The first modern brewery in India was set up in Kasauli, in the Himalaya mountains, near Shimla, in the late 1820s by the Englishman Edward Dyer. Dyer's brewery produced Asia's first beer, called Lion. The brewery was soon shifted to nearby Solan (close to the British summer capital Shimla), as there was an abundant supply of fresh spring water there. The Kasauli brewery site was converted to a distillery which Mohan Meakin Ltd. still operates. Dyer set up more breweries at Shimla, Murree, Rawalpindi and Mandalay. Another entrepreneur, H G Meakin, moved to India and bought the old Shimla and Solan Breweries from Edward Dyer and added more at Ranikhet, Dalhousie, Chakrata, Darjeeling and Kirkee. In 1937, when Burma was separated from India, the company was restructured with its Indian assets as Dyer Meakin Breweries, a public company on the London Stock Exchange. Following independence, in 1949 N.N. Mohan took over management of the company and the name was changed to Mohan Meakin Ltd. The company continues to produce beer across India to this day and Lion is still available in northern India. Lion was changed from an IPA to a lager in the 1960s, when due to East European influence, most brewers in India switched from brewing Ales to brewing lagers. Today no brewer in India makes India Pale Ale. All Indian Beers are either lagers (4.3% alcohol such as Australian lager) or strong lagers (15 % alcohol - such as Australian Max super strong beer). International Breweries Pvt. Ltd. have recently announced an intention to work with Mohan Meakin to produce and launch an India Pale Ale called Indian IPA from India's first brewery at Solan. Kingfisher, Haywards, Kalyani Black Label, Golden Eagle, Australian, Max, Royal Challenge, Kings and Belo are popular Indian beer brands. In various parts of north-eastern India, traditional rice beer is quite popular. Several festivals feature this nutritious, quite intoxicating, drink as part of the celebrations. The rice is fermented in vats that are sometimes buried underground. Elephants are known to attack villages, with the primary agenda of drinking from these vats. Following one such raid in north-eastern India, a police officer in Dumka was quoted in the press as saying: "Tribals who love rice beer brew the liquor at home. Elephants too are fond of this beer. Often it is found that, attracted by the strong smell of the liquor, wild elephants tear down the tribal houses where the brew is stored."

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CHAPTER 2: COMPANY PROFILE OF UNITED BEVERAGE GROUP

2.1 - HISTORY
Name: United Breweries Limited Type: Conglomerate Founded: 1915 Founder: Thomas Leishman Headquarter: Bangalore Area Served: India Key Person: Dr. Vijay Mallya Industry: a) Brewery b) Alcoholic Beverage c) Engineering d) Pharmaceuticals e) Airlines Owner: Dr. Vijay Mallya United Breweries Limited: (BSE: 532478) United Spirits Limited: (BSE: 532432) Divisions: a) Kingfisher Airlines b) Mangalore Chemicals and Fertilizers c) United Breweries Global (Trading) Parent: United Breweries Group Products: Liquor, Airlines, Pharmaceuticals Total Assets: USD 2 billion Website: www.ubmail.com

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UB Groups Headquarters in Bangalore, India

25

THE LOGO

The Pegasus, which is the symbol of the United Breweries, first found its place as the Group logo in 1940. Then, the Helladic horse associated with beer and nectar in Greek mythology- carried a beer cask between the wings, ostensibly because beer formed the core operations of the Group. Later, the beer cask was removed to represent the Groups multifaceted operations . Now, it is just the Pegasus.

26

BUSINESS INTERESTS OF UB GROUP

Beverage Alcohol: The UB Group is 3rd largest spirits marketer in the world, with overall sales of 60 million cases. The company offers 140 brands at varying price points. Some of the famous brands of the UB Group are: Bagpiper Whisky, McDowell's No.1 Whisky, Director's Special Whisky, McDowell's No.1 Brandy and McDowell's Celebration Rum. Pharmaceuticals: The group's company Aventis Pharma Limited is the second largest pharmaceutical multinational in India. It develops and markets branded prescription drugs and vaccines. Media: The UB Group also has a shareholding in Asian Age Holdings Ltd, the company that owns and manages daily newspaper, The Asian Age. International Trading: The Group's company UB Global Limited is a recognized export house engaged in the export of Beer, Spirits, Leather Footwear and Processed Foods. The Company also exports Pharmaceutical Products and customized perfumeries. Research & Development: Vittal Mallya Scientific Research Foundation (VMSRF) was established in 1987 with the objective of developing newer and novel technologies that will have substantial application in industry and health care. The foundation is it is recognized by the Departments of Scientific & Industrial Research (DSIR), Dept. of Biotechnology (DBT), Council for Scientific and Industrial Research (CSIR) and the Ministry of Finance, Govt. of India. Aviation: UB Group entered aviation sector in 2005 with the launch of Kingfisher Airlines Limited. Kingfisher Airlines has captured an impressive market share and has established a niche identity for itself. The airlines recently acquired 25% stake in Deccan Airlines. Fertilizer: Mangalore Chemicals & Fertilizers Limited is under UB Group's management. It has a manufacturing capacity of 217800 MT of Ammonia and 380000 MT of Urea.

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28

COMPANIES UNDER THE UB GROUP

1. 2. 3. 4. 5. 6. United Breweries Holdings Limited United Spirits Limited- Spirits and Wines Branch United Breweries Limited- Beer Branch Kingfisher Airlines Mangalore Chemicals and Fertilizers Limited UB Engineering

29

Group Information

Founder of the UB Group (Late) Vittal Mallya The youngest of three children, Vittal Mallya was born in Dhaka, now in Bangladesh, on February 8, 1924. He was born in an army family to Mrs. Devi Mallya and Lt. Col. Bantwal Ganapathi Mallya (a Medical Doctor with an FRCS degree). Vittal Mallya grew up to be a smart young man to graduate at a very young age. He received several double promotions during his academic career for outstanding performance and this demonstrated his exceptional calibre and sharp intellect. Following graduation, young Vittal Mallya travelled the world for two years, during which period he visited Latin American countries very extensively and even learnt to speak Spanish. Vittal Mallya saw an opportunity in 1946-47 and started acquiring the shares of United Breweries Limited, of which he became the Chairman. His foresight and business acumen led to the aggressive expansion of the United Breweries Group. Meanwhile, the acquisition of control over McDowell & Company Limited marked the Groups entry into the Wines and Spirits business. The Group took a further stride with the acquisition of Kissan Products Limited in 1950-60.

It also began its association, about this time, with Hoechst AG of Germany while copromoting Hoechst Pharmaceuticals Limited, now known as Aventis Pharma India. Having set the pace for the Groups progress, Vittal Mallya had to slow down because of a health set-back. In 1965, the family moved back to Calcutta. Vittal Mallya acquired Phipson & Company Limited and Carew & Company Limited to further reinforce the Groups presence in the Beverages Alcohol industry. It was 1977, the Morarji era of prohibition. Swimming against the current and showing once again a rare sense of timing and business opportunity, Vittal Mallya 30

acquired several breweries and distilleries. What set Vittal Mallya apart was his humility and simplicity. Despite his poor eyesight, his vision remained unfailing and fully focussed. A vision that has created one of Indias leading corporate houses. A vision that is a shining example and an inspiration.

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Dr. Vijay Mallya Chairman

The UB Group is one of Indias largest conglomerates with annual sales of over US$ 4 billion and a market capitalization of approximately US$ 12 billion. The Group has diverse interests in brewing, distilling, real estate, engineering, fertilizers, biotechnology, information technology and aviation. It is also the largest Indian manufacturer of beverage alcohol (beer and spirits). Dr. Vijay Mallya is the Chairman of the Group. Dr. Mallya, was elected by shareholders as Chairman of UB in 1983, at the age of 28 . He previously assisted his father, the former Chairman, who passed away in the same year. Prior to being entrusted with the responsibilities of a classical Indian corporate conglomerate, Dr. Mallya worked for the American Hoechst Corporation (now Sanofi-Aventis) in the USA and with Jenson & Nicholson in the U.K. Since 1980, he assisted his father, the then Chairman of The UB Group, in managing the important Brewing and Spirits Divisions and in re-launching the Kingfisher Brand of Beer. In 1983, the sales volume of the UB Spirits division was approximately 2.85 million cases and UBs beer business trailed behind that of Golden Eagle from Mohan Meakins.

32

Also included in the Group were activities such as pharmaceuticals, agrochemicals, paints, petrochemicals and plastics, the manufacture of electro-mechanical batteries, the manufacture of food products and carbonated beverages, a fast-food pizza chain and several medium and small scale industrial units. Upon assuming the position of Chairman in October 1983, Dr. Mallya initiated the process of defining a corporate structure with performance accountability, inducting professional management and consolidating the unwieldy empire into individual operating divisions. In 1988, Dr. Mallya became a non-resident Indian to pursue global opportunities and to transform the UB Group into Indias first multinational company. While, in the initial stages, overseas representative offices had been commissioned, the real break came in 1988 when Dr. Mallya, in a leveraged buyout, acquired the global Berger Paints Group with operating companies across four continents. The exit strategy for this investment was profitably executed when Dr. Mallya successfully directed five Initial Public Offerings on the London, Singapore (Main Boards), Nairobi, Jamaica and Abidjan Stock Exchanges. The paints business was divested for significant value in 1996. Dr. Mallya also founded a software company in the USA in 1993 which was subsequently listed on the NASDAQ in 1996 and which provides a considerable window of opportunity to the vast US market. He also initiated several ventures for the promotion and globalization of UB brands and, in particular, Kingfisher and McDowell. In 1990, following the Government of Indias liberalised economic policies, Dr. Mallya decided that the UB Group would only retain interests in businesses that were globally competitive and which did not depend upon fiscal tariff protection. He also decided to focus on areas of core competence and transformed the vastly diversified UB conglomerate into a handful of key operating businesses. On entering the new millennium, the UB Group is considerably more focused and has dramatically increased value for its shareholders through its various operating businesses. Sales of the UB Spirits Division have crossed 90 million cases (9 litres each) during the fiscal year 2008-09. In addition, this Division is one of only three in the world to own 22 millionaire brands and at least five brands rated by Drinks International, UK to be amongst the ten fastest growing brands in the world in their respective categories. The market share of the Spirits Division in India is currently 60% and exports to the Middle East, Africa and Asian countries are growing rapidly. In 2007, United Spirits Limited, the flagship of The UB Group, acquired a hundred percent of premium scotch distillers Whyte & Mackay and Liquidity Inc, a United States-based maker of specialty vodkas. The Delaware-based Liquidity Inc produces speciality brands like Pinky Vodka and Marakesh. The UB Groups Brewing Division has also assumed undisputed market leadership 33

with a national market share in excess of 48%. Through a process of aggressive acquisition and market penetration, The UB Group today controls 60% of the total manufacturing capacity for beer in India. The flagship brand, Kingfisher, is now sold in over 50 countries worldwide having received many accolades for its quality. Kingfisher, one of the flagship brands of The UB Group, has partnered with NDTV, Indias leading broadcast group in a first-of-its-kind media alliance for the promotion of NDTV Good Times. The UB Groups Kingfisher Airlines is today the undisputed market leader in Indias aviation market. In the short span since it was launched, Kingfisher Airlines has redefined the whole experience of flying and has raised the bar by unleashing a host of product and service innovations. It has received numerous awards since its inception. Kingfisher Airlines offers Full Service and an unparalleled experience to the Indian air traveller. In-flight entertainment has been taken to a new level with the introduction of Live TV to compliment the latest and finest Audio and Video on Demand system that is available. With the merger of Air Deccan and Kingfisher Airlines, the airline covers all segments of air travel from low fares to premium fares and offers the maximum number of flights offered by any single airline network in India. Dr. Mallya is the Chairman of public companies both in India as well as in the USA. He has been the Chairman of Aventis Pharma India (previously Hoechst) as well as the Chairman of Bayer Crop Science in India (previously Agrevo) for over 20 years, in addition to his Chairmanship of several other corporations. Dr. Mallya is the first Indian ever to become the owner of a Formula One Team. The Netherlands-based Mol Family and Dr. Mallya have formed a consortium that is now the joint owner of Force India Formula One, which is also Indias first-ever Formula One Team and represents Indias first, truly global sports foray. He is a keen sportsman and is an ardent aviator and yachtsman of distinction. He not only participates in various sporting events but also supports various sporting activities worldwide, particularly for the under privileged. Dr. Mallya has received several professional awards both in India and overseas. He was conferred a Doctorate of Philosophy in Business Administration, by the Southern California University, Irvine. He has also been nominated as a Global Leader for Tomorrow by the World Economic Forum. He was conferred Frances highest civilian honour Officier de la legion d Honneur for his exceptional career as businessman heading a multinational with diversified interests. Dr. Mallya has always believed that Corporations have a responsibility to society and mankind. To this end, he has contributed generously to various Charities and 34

Foundations in several countries in addition to establishing The Mallya Hospital, The Mallya-Aditi School and the Vittal Mallya Scientific Research Foundation in Bangalore, India.

1826 McDowell and Co. is established as a trading company with its Headquarters in Madras, by an enterprising Scotsman, Angus McDowell. 1898 McDowell & Company Limited is incorporated.

1951 Vittal Mallya acquires McDowell, initiating a new era in the history of the company. 1959 Vittal Mallya envisions an enterprise of his own, built on the foundation of McDowell. The first distillery is established in Cherthala, on the banks of Keralas famed Vembanad Lake. 1961 The first ever distillation plant in the country to produce Extra Neutral Alcohol with French collaboration, is commissioned in Cherthala. It begins bottling Beehive French Brandy for Herbertsons Limited. 1963-64 Vittal Mallya envisions an enterprise of his own, built on the foundation of McDowell. The first distillery is established in Cherthala, on the banks of Keralas famed Vembanad Lake. 1968 McDowells No. 1 Whisky launched and proves to be an instant success. 1969-73 McDowells Hyderabad distillery is commissioned, followed by one in Ponda (Goa) in 1971 and in Hathidah (Bihar) in 1973. 35

1973 Vittal Mallya acquires Herbertsons. Vijay Mallya, his son, is inducted as Director of McDowell & Co. 1976 Herbertsons launches Bagpiper Whisky. It is a sell-out clocking 100,000 cases in its year of launch. 1977-80 Vittal Mallya goes on a distillery acquisition spree bagging distilleries in Udaipur, Alwar, Mirganj, Serampore and also sets up a plant in Pondicherry. 1980 Royal Challenge (a Shaw Wallace brand at that time) trailblazers from the North to win the hearts of whisky drinkers across India.

1983 Dr. Vijay Mallya takes over as Chairman of the UB Group and McDowell. The Company soon earns itself a reputation for innovation in product development and marketing strategy.

1987 McDowell shifts headquarters from Chennai to Bangalore. 1988 The Group creates a full-fledged Technical Development Centre, one of Asia's finest where continuous research work is carried out for product and process development. 1990 McDowell's No.1 Rum is launched - Celebration (Dark) and Carribean (White). 1991-92 McDowell acquires the spirits business of Forbes Forbes Campbell & Company Limited with a manufactory at Nashik and its brand portfolio. 1992 McDowell launches Asia's first Single Malt, Duet Gin and Vodka variants. Shaw Wallace launches Antiquity Rare Premium Whisky, a blend of exclusive scotch, fine Indian malts and premium neutral alcohol. India's first joint venture in alcoholic beverages is created - United Distillers India Limited is formed with United Distillers p.l.c. of UK. Black Dog 12 YO Deluxe Scotch, Black & White, VAT 69 and White Horse are bottled in India at the Group's Nashik Unit. 36

1994 A prized new product, slated to be the 'Best Indian Whisky', is introduced. A wellrounded bouquet of Indian peated malts with a generous infusion of exclusive scotch, it is named McDowell's Signature.1995 Carew Phipson Limited, Consolidated Distilleries Ltd and a few other companies merge into McDowell& Co. which now owns 9 manufacturing facilities. 1998 McDowell & Co. Ltd celebrates its centenary. With five millionaire brands in its portfolio: No.1 McDowells Whisky with annual sales of over 2.5 million cases, No.1 McDowells Brandy with annual sales in excess of 2 million cases and Celebration Rum, Old Cask Rum and Diplomat Whisky with sales of over one million cases each. 2005 McDowell & Co. completes acquisition of Shaw Wallace and Company, for long its traditional competitor in the market place. 2006 USL, the flagship of the US $ 3 billion plus, UB Group is created through the merger of McDowell & Co., Herbertsons Limited, Triumph Distillers and Vinters Private Limited, Baramati Grape Industries Limited, United Distillers India Limited, Shaw Wallace Distilleries Limited and four other companies. Bouvet Ladubay, subsidiary of France-based Taittinger is acquired. 2007 Together, Shaw Wallace, McDowell, Herbertsons and Triumph Distillers & Vintners account for group sales exceeding 66 million cases with retail sale value of over Rs 14,000 crore. USL acquires Whyte and Mackay, the UKs leading Scotch Whisky distillers. In this year, USL also acquires US-based Liquidity Inc., makers of Pinky Vodka. 2008 USL introduces McDowell's No.1, Royal challenge and Antiquity in new, international packaging. Whyte & Mackay Special, bottled at Nashik facility is launched. Romanov Red Vodka makes waves in the prestige vodka market. In FY09 the company clocked sales of 90 million cases, growing at 20% over the previous year. THE BEER STORY Success It was the late 19th century. Beer was delivered in bullock carts in casks called hogsheads. Consumers were mostly defense personnel. Over hundred years have passed. Beer from United Breweries is now delivered all over the world, catering to the needs of consumers across generations and continents. From 37

modest, local beginnings, the UB Group has transformed into a global conglomerate. The early days The history of beer-making in India and UBL is interlinked. We can trace it to the early days when breweries were set up in South India to cater to the British troops stationed in Bangalore, Madras and Pune. The Rose & Crown Brewery at Ketti in the Nilgiris was started to meet the demand of Boer prisoners captured by the British during the South African war of 1899-1902. The Castle Brewery which dates back to 1857 (the year of the Indian mutiny) was set up for the European planters scattered over the Nilgiris. So was the Nilgiris Brewery Company. The British Brewing Corporation set up in Madras (1902) catered to the elite of the port town of Madras while the Bangalore Brewery Company had been supplying beer for the troops stationed at Pune and Bangalore since 1885. United Breweries Limited (UBL) was founded on March 15, 1915, in Madras by Thomas Leishman, a Scotsman, also its first Managing Director. UBL manufactured and sold only bulk beer for troops of both the world wars. It was a classic case of role reversal India being introduced to this exotic brew and in turn becoming its major exporter. Consolidating growth The Companys brewing tradition has a legacy of nearly 130 eventful years. Along its journey through the global Alcoholic Beverages landscape, UBL has consistently influenced business paradigms, beer-drinking habits and conventional mindsets. One man played a pivotal role in the Groups growth Vittal Mallya who was elected to the Board of Directors of UBL in 1947 at the age of 22 and a year later became its Chairman. Bangalore has been at the core of UBLs existence. The Registered Office of UBL was shifted to Bangalore in June 1952, into the spacious 22-acre factory of the Bangalore Brewery Company. The Bangalore Brewery buildings, dating as far back as 1885, have since given way to newer construction. The only relic that still stands is the present godown adjacent to the UB Towers building, which earlier housed the bottling cellars, pasteurizing and packing departments. The five acres of land across the road donated to the Jesuit Society now forms the campus of St Josephs Indian High School. Exploring Opportunities In 1951, United Breweries Limited added liquor to its product cabinet when McDowells became its first subsidiary. Under the dynamic guidance of Vittal Mallya, the Company became the first to manufacture Indian substitutes of foreign liquor. This gave rise to a new term IMFL (Indian Made Foreign Liquor). McDowell has since then been the undisputed market leader and one of the largest and fastest moving consumer goods companies in the country. Vittal Mallya was not a man to 38

rest on his laurels. He continued to pursue opportunities in the Alcoholic Beverages business and at the same time diversified into Polymers and Batteries in addition to Pharmaceuticals and Foods that the Company had been making till then. The UB Group (United Breweries) Group is a multi-faceted conglomerate with business interests in Beverage Alcohol, Pharmaceuticals, Media, International Trading, Aviation, Fertilizer, Research & Development, and Infrastructure Development. The United Breweries Group was founded by a Scottish gentleman Mr. Thomas Leishman in 1915. The company used to manufacture beer at that time and took its initial lessons in manufacturing beer from South Indian based British breweries. In August 1947, Mr. Vittal Mallya became the company's first Indian director. A year later he became the Chairman of the Group. United Breweries came into limelight by manufacturing bulk beer for the British troops, which was transported in huge barrels. In 1950s and 60s, the group expanded rapidly and made several acquisitions. McDowell was added as one of the Group subsidiaries. This helped UB Group to venture into wines and spirits business. Kingfisher, the Group's most visible and profitable brand, made its entry in the sixties. Thereafter, the Group moved into agrobased industries and medicines when it acquired Kissan Products and formed a longterm relationship with Hoechst AG of Germany to promote Aventis Pharma. After Mr. Vittal Mallya's death in 1983, his son Mr. Vijay Mallya assumed the mantle of the group.Mr. Vijay Mallya inducted professional management and consolidating the Group into individual operating divisions. In 1988, United Breweries Group acquired the global Berger Paints Group with operating companies across four continents. The paints business was divested for significant value in 1996. After India adopted economic liberalization in 1991, the United Breweries Group decided to retain interests in only those businesses that were globally competitive and did not depend upon fiscal tariff protection. Today, United Breweries Group is the second largest manufacturer of Spirits products in the world. In 2005, the Group entered aviation sector with the launch of Kingfisher Airlines Limited. Within a short time the airlines has captured an impressive market share and has established a niche identity for itself. The beginnings of what is today The UB Group are rooted in the flagship company, United Breweries Limited, (UBL) also referred to as the Beer Division of the UB Group. Led by Mr. Kalyan Ganguly, President & Managing Director, it has around 48% market share in the country. Millennium Alcobev Pvt Ltd., (MABL), is the Joint Venture Company in which UB along with its subsidiary and Scottish & Newcastle of the UK have equal stake of 50%. United Breweries Limited, the flagship company of the UB Group, has an association with the brewing dating back over five decades, starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market. 39

Here, innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other. A concerted emphasis on quality. UBL today boasts an impressive spread of own and contract manufacturing facilities throughout the Country. Quality and hygiene are the key elements of the United Breweries' manufacturing philosophy. To this end, the Central Scientific Laboratory (CSL), headquartered at Bangalore sets standards for all its breweries. Quality Management Systems laid out along the lines of ISO 9000 are strictly adhered to, controlling quality at every stage of production, from raw materials to the end product. Also, besides controlling the production process, the CSL analyses the Company's beer taken off market shelves all over the Country, the competition's beers and beers across the world. These beers are tested as per the standards laid down by the European Brewery Convention on 40 different parameters. By these standards, United Breweries' beers don't just equal, but even surpass, several Dutch and American beers. Its flagship brand 'Kingfisher', has achieved international recognition consistently, and has won many awards in International Beer Festivals. Kingfisher Premium Lager beer is currently available in 52 countries outside India and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the UK. In addition, UBL has also entered into mutli-faceted strategic alliance with Scottish & New Castle Plc (S&N), an international brewery major, with $6 billion in revenue and a market capitalization of $5.4 billion. This alliance, apart from having a joint venture in India, will allow S&N to market it International brands like Kronenbourg in India, while UBL will utilize S&N's global network to further globalize its Kingfisher. UB Group acquires Whyte & Mackay for 595 m . Mumbai May 16 After months of being fodder for whisper columns, Scottish spirits maker Whyte & Mackay, popularly identified by its iconic double red lion symbol, is finally part of the United Breweries (UB) Group. United Spirits Ltd (USL), the flagship of the UB Group, has acquired 100 per cent equity in Whyte & Mackay for 595 million (about Rs 4,783 crore), with the deal being sealed on Wednesday morning in Glasgow, Scotland. The acquisition plugs a "missing link" in the UB product portfolio by giving the company the strong presence it needed in the scotch whiskey market, said UB Group Chairman, Mr Vijay Mallya, speaking to the Indian media from Glasgow. The acquisition pushes USL's consolidated sales up to 75 million cases per annum. USL closed 2006-07 at 66.4 million cases, he said. "Until today, the only missing link in our portfolio has been Scotch and due to the shortages and rapidly increasing prices of Scotch Whisky, we needed a reliable supply source to secure our future considering that we use scotch in our Indian blends. The potential for premium Scotch Whisky in India is enormous and, with the acquisition of Whyte & Mackay we now have a strong portfolio of internationally recognised brands that we will immediately introduce into the Indian market and use our strong distribution muscle fully to our 40

advantage. In addition we now have access to international distribution and can look forward to exporting our brands from India," he said. Whyte & Mackay recorded sales of 9 million case and case equivalents in the last 12 months. The leading Scotch whiskey distiller owns brands including The Dalmore, Isle of Jura, Glayva, Fettercairn, Viadivar vodka and Whyte & Mackay blended Scotch. The company has 140 brands, some dormant, but that can be revived, he said. USL will look to bring the W&M brands into India and China and there will be a revamp of the product portfolio depending on the requirements of these markets, he said. Global demand for Scotch whisky is showing strong growth and prices are increasing rapidly, Dr Mallya said. W&M's bulk scotch inventories of 115 million litres will allow USL the opportunity to meet their growing requirements for their brands in India. Explaining the corporate structure of the deal, Mr Mallya said that W&M is a 100 per cent subsidiary of USL, through an intermediary holding company established for the purpose. Acquisition finance for the transaction to United Spirits was provided by ICICI Bank and Citibank. The debt of 325 million was extended by ICICI to the intermediary holding company, while 310 million was extended by Citibank to USL, said the UB Group President (finance), Mr Ravi Nedungadi. In the day of consolidated statements, these financial details would be reflected in the company's accounts, he added. "I have repeatedly stated that we will not over pay in any acquisition and I am satisfied that the price agreed is attractive. Further, the combined profits of United Spirits and Whyte & Mackay are expected to be earnings accretive from the first completed year of operations after accounting for the cost of funds applied to the acquisition," Mr Mallya said. Mr Vivian Imerman, Chairman and Chief Executive Officer and majority shareholder in W&M, will remain in the group as a Strategic Advisor to Mr Mallya. The acquisition brings into USL's fold The Invergordon Distillery, near Inverness. W&M also owns four malt whisky distilleries in Scotland and a bottling facility in Grangemouth.

Business Interests of UB Group:

Beverage Alcohol: The UB Group is 3rd largest spirits marketer in the world, with overall sales of 60 million cases. The company offers 140 brands at varying price points. Some of the famous brands of the UB Group are: Bagpiper Whisky, McDowell's No.1 Whisky, Director's Special Whisky, McDowell's No.1 Brandy and McDowell's Celebration Rum. Media: The UB Group also has a shareholding in Asian Age Holdings Ltd, the company that owns and manages daily newspaper, The Asian Age. International Trading: The 41

Group's company UB Global Limited is a recognized export house engaged in the export of Beer, Spirits, Leather Footwear and Processed Foods. The Company also exports Pharmaceutical Products and customized perfumeries. Fertilizer: Mangalore Chemicals & Fertilizers Limited is under UB Group's management. It has a manufacturing capacity of 2,17, 800 MT of Ammonia and 3,80,000 MT of Urea. Research & Development: Vittal Mallya Scientific Research Foundation (VMSRF) was established in 1987 with the objective of developing newer and novel technologies that will have substantial application in industry and health care. The foundation is it is recognized by the Departments of Scientific & Industrial Research (DSIR), Dept. of Biotechnology (DBT), Council for Scientific and Industrial Research (CSIR) and the Ministry of Finance, Govt. of India. Aviation: UB Group entered aviation sector in 2005 with the launch of Kingfisher Airlines Limited. Kingfisher Airlines has captured an impressive market share and has established a niche identity for itself. The airlines recently acquired 25% stake in Deccan

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2.2 PRODUCT MIX

PRODUCT LEVELS
There are 5 product levels which coincide with 5 different needs of the Customers like stated, unstated, delight, Real and Secret Needs. All the various needs may not be fulfilled by the same product. But eventually all the needs are covered with the following Product level.

Core Product

Destination - Maurtitius Main aim where He want to reach or go Ticket Booking Hotel Booking, Sight Seeing Authentic Information, Information of packages Different Information Leading to destination Differentiation Strategy Laptop & Wi-fi Connectivity Future Expansion Different Island for Business House

Basuc Product

Epected Product

Augmented product

Potential Product

The noun product is defined as a "thing produced by labor or effort"or the "result of an act or a process", and stems from the verb produce from the Latin prdce(re), (to) lead or bring forth. Since 1575, the word "product" has referred to anything produced. Since 1695, the word has referred to "thing or things produced". The economic or commercial meaning of product was first used by political economist Adam Smith. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. In retailing, products are called merchandise. In manufacturing, 43

products are purchased as raw materials and sold as finished goods. Commodities are usually raw materials such as metals and agricultural products, but a commodity can also be anything widely available in the open market. In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project. In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. In United Breweries much emphasis is given on the quality of product which would be served to the consumers. No compromise is made on the issue of quality.

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2.3 PRODUCT LINE

ALCOHOL & BEVERAGE BUSINESS OF UB GROUP

United Spirits Limited (USL) is the largest Spirits Company in India and among the top three spirits companies in the world. Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 19 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market share for its first line brands in India.

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United Breweries is the 3rd largest spirits marketer in the world, with overall sales of 60 million cases. In the period 1950 to 1960, United Breweries expanded rapidly and made numerous acquisitions. It entered the spirits business by acquiring McDowell in 1951, and launched its flagship brand Kingfisher Lager Beer, in 1955. Mr. Vittal Mallya started creating a global conglomerate by moving into agricultural-based products and medicines by acquiring Kissan Products and forming a long-term relationship with Hoechst AG of Germany to promote a company today known as Aventis Pharma. In the mid-1970s, when liquor prohibition seemed a possibility in India, the late Mr. Vittal Mallya acquired breweries and distilleries across the country. The significant amount of financial risk taken by Mr. Vittal Mallya in acquiring these breweries and distilleries enabled United Breweries to attain a market leadership position at the end of the prohibition threat. United Breweries now has greater than a 40% share of the Indian brewing market. Recently UB financed a takeover of the spirits business of the rival Shaw-Wallace company giving it a majority share of India's spirits business. The group also owns the Mendocino Brewing Company in the United States.

Alcohol and Beverages are divided into three categories:

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1. SPIRITS

United Spirits Limited (USL) - the INR 5500 crore spirits arm of the UB Group is Indias largest and the worlds third largest spirits company. USL was earlier McDowell and Company Limited. USL has a portfolio of more than 140 brands, of which 19 are millionaire brands* (selling more than a million cases a year) and enjoys a strong 59% market share for its first line brands in India. United Spirits recorded global sales of 90 million cases for the year ended on March 31, 2009. United Spirits brands have won the most prestigious of awards across flavors, ranging from the Mondial to International Wine and Spirit Competition (IWSC) to International Taste and Quality Institute (ITQI); a total of 99 awards and certificates (as of November 2008). The Company is known to be an innovator in the industry and has several firsts to its credit such as the first premixed gin, the first Tetrapack in the spirits industry in India and the first single malt manufactured in Asia. In 2007, United Spirits acquired the Glasgow-based Whyte and Mackay and ramped up its premium scotch and single malts portfolio significantly. Whyte & Mackay is a leading distiller of Scotch Whisky owning brands including The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar vodka and the eponymous Whyte & Mackay blended Scotch. The Company also owns several other Scotch Whisky brands such as Mackinlays, John Barr, Cluny and Claymore to name a few. Whyte & Mackay also owns four malt whisky distilleries in Scotland and a state-of-the-art bottling facility in Grangemouth with a capacity of 12 million cases per annum. At a time when global demand for Scotch Whisky is showing strong growth and prices are increasing rapidly, Whyte & Mackays bulk scotch inventory is not only valuable but provides United Spirits the opportunity to meet their own growing requirements in India. Whyte & Mackay recorded sales of 1.68 million cases of W&M brands and 1.56 million cases of third party owned labels (Tescos, Label 5), for the fiscal ending March 31, 2009 47

Whisky Bagpiper McDowells No.1 Directors Special McDowells Green Label Royal Challenge DSP Black Signature

Brandy McDowells No.1 Honey Bee John Ex-Shaw

Rum Celebration Rum Old Cask Rum Old Adventurer Rum

Vodka & Gin White Mischief Romanov Blue Riband

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1. WINES

With the acquisition of Bouvet Ladubay in 2006, the UB Group has made a strategic entry into of the wines category. Bouvet-Ladubay, located in the the Loire valley of the Saumur region in France, has a heritage of over 156 years. Bouvet-Ladubay has won many international awards and has also been associated with Art and Theatre, sponsoring the Festival dAnjou, the Premiers Plans festival (Debut films festival) in Angers, Arcachon, Biarritz, Brest and Mont Dor and the Company has been present at The Cannes film festival for the past five years. The company currently has a capacity of 8 million bottles per annum, with further scope for expansion when required. The company has also commissioned a green field project, coming up in Baramati, which will be Indias best and biggest winery. 6 different ranges will be produced during the first year of operation and 8 more brands will be added over the next 3 years, including manufacturing of premium wines that will go through French oak barrels. Plans to manufacture sparkling wines using traditional French method (methode champagnoise) and under the technical guidance of Bouvet-Ladubay are also in the pipeline. The wines are marketed under the brand names - ZINZI & FOUR SEASONS. For its annual production requirement, the company has already entered into long term contractual agreement with local farmers for 500 acres and will enter into contractual agreements for a further 2000 acres of vineyards. Besides, the company will also share its technical expertise with the local farmers of Baramati and help in viticulture. This project will act as a catalyst to the socio-economic development of the local community by generating approximately 2000 direct and indirect job 49

opportunities for the people of Baramati. Simultaneously, it will also promote wine tourism at its winery & vineyards. The most popular brands under Spirits and Wines are: Dalmore Jura Whyte & Mackay Black Dog Antiquity Signature Royal Challenge McDowell's No.1 Celebration Rum Bouvet Ladubay Pinky Romanov White Mischief

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2. BEER

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United Breweries Limited (UBL)- The beginning of what is today The UB Group is rooted in the flagship company, United Breweries Limited, (UBL) also referred to as the Beer Division of the UB Group, has around 48% market share in the country. United Breweries Limited has an association with brewing, dating back over five decades; starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogsheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market. Here innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other with concerted emphasis on quality. Its flagship brand 'Kingfisher', has achieved international recognition consistently and has won many awards in International Beer Festivals. Kingfisher Premium Lager beer is currently available in 52 countries outside India and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the UK.

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THE MOST POPULAR BRANDS ARE:

Kingfisher lager Kingfisher light lager Kingfisher strong lager Kingfisher super strong lager Flying horse royal lager Kalyani black label strong lager Kalyani Black Label Premium Beer Raj Kobra Taj mahal premium lager UB Premium Ice Sand Piper Lager Zingaro Strong Beer

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AVIATION BUSINESS OF UB: KINGFISHER AIRLINES ABOUT KINGFISHER AIRLINES

On May 8, 2005, "the king of good times" had more than one reason to celebrate. Not only was it Vijay Mallya's son Siddhartha's 18th birthday, it was also the launch of his Kingfisher Airlines (KFA).

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Mumbai's Air-India hangar had 2,000 guests -- industrialists, top politicians, glitterati and the media -- sipping champagne and checking out the impressive new Airbus A320 aircraft, flanked by Kingfisher's red-liveried hostesses. In seven months, KFA has earned Rs 200 crore (Rs 2 billion), flown over 500,000 passengers, grown to a fleet of nine Airbus A320 and expanded from four flights a day to 56. The 25-million seats Indian aviation industry was growing at 20 per cent, but it was on the backs of the new, low-cost players. Entrenched players like Indian Airlines and Jet Airways, too, were slashing ticket prices to cater to the new breed of have-ticketwill-travel passengers. The challenge for the new airline was to stand out in the crowd. The way ahead was clear: extend the Kingfisher brand into aviation, and focus on the young business traveller.

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2.4 VISION, MISSION, OBJECTIVE

MISSION STATEMENT:We constitute a large, global group based in India. We associate with world leaders in order to adopt technologies and processes that will enable a leadership position in a large spectrum of activities. We are focused on assuming leadership in all our target markets. We seek to be the most preferred employer wherever we operate. We recognize that our organization is built around people who are our most valuable asset. We will always be the partner of choice for customers, suppliers and other creators of innovative concepts. We will continually increase the long-term value of our Group for the benefit of our shareholders. We will operate as a decentralized organization and allow each business to develop within our stated values. We will be a major contributor to our National Economy and take full advantage of our strong resource base. We commit ourselves to the ongoing mission of achieving Scientific Excellence.

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2.5 - QUALITY STATEMENT :Quality leadership is vital to the long-term success of the UB Group in an increasingly competitive marketplace. Building quality into our workplace, products and service is essential to a successful future for our customers, employees, suppliers communities and shareholders. The UB Group will work to provide products and services that always meet or exceed expectations Management will commit resources and create an environment in which each employee can contribute skills, talents and ideas to a never-ending process of improvement and innovation in all aspects of our business.

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CHAPTER 3: BUSINESS OF UNITED BREWERIES GROUP

3.1 BEVERAGE ALCOHOL:DALMORE

With over 160 years of existence in the art of whisky-making, Dalmores Highland malt whisky is recognized as one of the finest distilleries in the world. To enrich the rich taste of Dalmore, the malts used for brewing the fine liquor are fermented in oak wooden casks for as long as 21 long years. With subtle transformation, the malt tends to emit an orange, healthier aroma with subtle hints of smoke. To find more you simply have to follow your nose and taste it with the help of Richard Patersons tasting notes. The pure water of River Alness is used to produce the Dalmore and its because of the wholesomeness of the river many other Highland malt whiskies of Scotland have set up their production lines along the banks. From Norse to Gaelic, Dalmore means the big meadowland referring the fertile Black Isle located on the opposite side of the distillery. The Dalmore offers 26 unusually distinct aromas with a choice of flavor from chocolate and spice. Each of these exceptional malts has its own unique character and has bagged numerous prestigious awards. 58

JURA

Established in 1810, the name of JURAs single malts is inspired from the Island of JURA described as one of the most un-getable places by English writer George Orwell because of its distant location in London. The serenity of the location contributes to the unique blending process where whisky not only absorbs the flavors of the wood, but also the islands sea breeze passing over the porous walls of barrels. Often the smallest of factors can affect the balance of flavors in whisky. Jura, as they say is an island rich in history, myths and superstitions and thelegacy dates back to 8000 years ago where the pre-historic graveyard at Kilearnadil was said to be the resting place of a saint. For true whisky enthusiasts a visit to the distillery is the major attraction. The island of Jura may be hard to get to, but those who have been there will find it even harder to leave. The fastest route from London involves changing a couple of flights and then a ferry. After winning numerous awards in its category JURAs single malt is distinguished for its subtle flavors world over.

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WHYTE AND MACKAY

Established on the docks of Glasgow in 1844, the brand was named after two founders, James Whyte and Charles Mackay. The finest whiskey Whyte and Mackay is proud of its Glasgow roots to produce the rich flavor by combining the best of 35 selected malts in Scotland. The brand has always believed in the philosophy of good things comes to those who wait, and thats how Whyte and Mackay had been known for using the unique double marriage process in blending their whisky which not only guarantees a smooth, mellow and distinctive character but ensures every drop of Whyte & Mackay tasting as good as the first. There is an old saying which goes something like this You Cant Hurry Love. The simple meaning of the saying signifies the double marriage process. At 12 years old, when other producers bottle their aged blends, Whyte & MacKays Master Blender brings together the finest malt whiskies, then returns them to sherry casks to marry for another year of loving union. At 13 years old, the second marriage takes place, when the finest grain whiskies are introduced to this blend of malts to create the masterpiece that is THE THIRTEEN. There are 3 different variants of scotch whiskey based on the period of maturation, viz.

Whyte and Mackay The Thirteen (13 year old blended scotch whiskey) Whyte and Mackay 19 Years Old Blend (19 year old blended premium scotch whiskey) Whyte and Mackay 22 Years Old (Rare edition blended scotch whiskey)

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BLACK DOG

The birth of the great whisky took place almost 125 years ago when James McKinley from the second generations of the Leith Scotch-whisky blending family launched the masterful whisky by the name of Millard Black Dog. It is said that in the year 1883 Walter Millard, a Scot from British East India company came searching for the perfect Scotch and eventually discovered the great taste of whisky in these misty shores of Scotland. Today Black Dog is considered as a 100% genuine Scotch-whisky distilled, matured and blended in the lowland regions of Scotland. After more than 125 years every time-honored process is followed the same way to produce the impeccable blend of robust, yet smooth Scotch-whisky which is relished as an intricate fusion of delicate tones and soft aromas. Available in 2 enchanting blends - 12 Year Old Deluxe Scotch-whisky and 8 Year Old Centenary Scotch-whisky. For 12 Year Old Deluxe Scotch-whisky, the Master blender guarantees a lavish finishing with a touch of cream. On the other hand the 8 Year Old Centenary Scotch-whisky comes with a promise of giving a balanced, long and intense finishing.

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ANTIQUITY

It was during the era of sizzling 80s, Antiquity captured the fascination of whisky and scotch drinkers with its exceptional creation. It is a unique blend of exclusive Scotch, fine Indian malts and alcohol with zero artificial flavors. Needless to say the blend composition was derived after numerous experiments and till date the composition is a closely guarded secret, known only to the Master Blender. Quality of the product is maintained using strict quality control norms including finger-printing using the sophisticated Gas Chromatographic technique. A timeless packaging that's earned global recognition, bagging prominent awards like World-star, Asia-star and Indiastar. Available in two distinct blends - Antiquity Blue and Antiquity Rare, the brand is known for its indomitable spirit and superior taste. Both variants come in colors of Antique Gold with fantastically long and smooth finishing. As far as the aroma goes Antiquity Blue gives a whiff of peat as the delicate spice is married beautifully with honey, vanilla and tropical fruits double the excitement. On the other hand its sibling Antiquity Rare couples the delicate balance of malt and wood with a rare touch of heather.

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SIGNATURE

In the late 80s and early 90s, finding a Scotch or expensive whisky was a tough task. Every connoisseur stocked his bar largely from the bootlegger or trips abroad. With bootlegger, the risk of getting original stock always remained a question mark and secondly bulk purchase requirements of corporate partners could not be met. That saw the birth of Signature Whisky. Thats how in 1991, McDowell & Company launched this prized blend of imported Scotch having impeccable Indian malts and called it McDowell's Signature which soon started expanding its consumer franchisee to become the Best Indian Whisky of all time. The full-bodied Signature blend with a well-rounded bouquet of peated malts and a generous infusion of Scotch, adds to its superior value delivery. The physical identity of brand Signature played an instrumental role in creating a premium, aspirational and exclusive imagery for it. As it stepped into the new millennium, the focus shifted towards premium whisky drinkers who were younger, well-heeled, well-exposed and on-the-way-to-the-top. Thus was born the New Signature, known commonly for its rich "Scotch like Taste," McDowell's Signature is clearly young, modern, and stylish for the discerning.

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ROYAL CHALANGE

Royal Challenge is the largest selling premium whisky in India with a rich heritage of innovation and unsurpassable quality. Blended for 24 years, Royal Challenge has won the hearts of whisky drinkers across the nation since its inception in the 80s. It is said that the Master Blender spent a lot of time in studying the properties of various oak wood casks to select the right procedure for maturation. The kind of imagery it lends to its customers goes in to prove its leadership in the market. As the UB Group acquired Shaw Wallace in 2005, Royal Challenge commonly referred as RC amongst whisky drinkers became a part of USL's proud legacy. An amazingly smooth whisky, the secret of its velvet-like texture lies in the use of leisurely matured malt spirit. With its rare texture of antique gold, the finishing gets long, smooth, deep and yet so delicate.

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McDowells No.1

McDowells No.1 has undoubtedly been the top-of-the-line whiskey both literally and laterally. Over the years the brand has reinvented itself in all possible ways and has looked at greater accomplishments in product, packaging, marketing and promotions. In the beginning, it had the tag 'Mera No.1' attached to it. However, over the years, it has evolved and transformed from an "icon" to a brand character. The brand has reinvented itself in all possible ways and has looked at greater accomplishments over the years. With the simple proposition of celebrations in life begin with McDowell, the trademark cheer finger has quite evidently made an impression. The proof of its quality and appeal is that it has not only survived the Scotch invasion, but is on its way to becoming one of the biggest whisky brands in the world even beating pure Scotch! Apart from the popular McDowell's No. 1 Reserve Whisky, McDowell has another variant under its label DietMate Whisky, world's first diet whisky, created especially for the fitness conscious drinkers. The brand's ability to change itself constantly and remain connected to the ever - changing customer aspirations is the key to its success. Its aroma has a subtle vanilla-like sweetness and no wonder which gives it a light, smooth and warm finishing.

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McDowells No.1 Platinum

The No.1 spirit of leadership. A true leader is he who thinks, and acts unconventionally. Bearing testimony to this belief is McDowells No.1 Platinum - A brand that celebrates real leaders. As drinking whiskey is perceived as a sign of achievement among todays youth, McDowells No.1 Platinum serves as an inspiration to the young leaders of tomorrow to dream big and work towards achieving it. Based on the insight, in todays world successful leader is he who makes unconventionality a way of his life, the brand reaches out across different media to awaken the leader in each one of us. A leader in his own right. It is said, the task of a leader is to get his people from where they are, to where they have not been. Case in point is MS Dhoni having led the Indian team to victory in the World Cup 2011. Gifted with leadership qualities that have inspired millions, it is no surprise that MS Dhoni fits the bill to be the brand ambassador for Mc Dowells No. 1 Platinum. Undoubtedly one of the best captains of all time, MS Dhoni embodies the brands ethos - Think and lead differently. And this platinum partnership certainly is a great unison of two iconic brands that synergize each other in an immaculate manner.

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Defining leadership. In its endeavor to emphasize the true essence of unconventional leadership, McDowells Platinum No.1 recently shot a television commercial (TVC) starring MS Dhoni. The authentic plot of the TVC revolves around the thought Successful leaders think differently. And takes us to the last over of the final T20 match in September 2007, where Dhoni, being the epitome of unconventional leadership, led India to a glorious win. This inspiring TVC, features a stirring narration by the captain himself. Further, its also a visual treat that offers a grand mix of stunning visuals and mind-blowing graphics. Currently on air in all leading TV channels and out-of-home media, it aims at reinforcing in the consumers minds the brands philosophy The No.1 Spirit of Leadership.

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BAGPIPER

Bagpiper is one of the flagship brands of United Spirits Limited and the worlds largest selling whisky. The brand sold more than 16 million million cases in 2009-10. The 33 year old flagship brand of USL is the market leader with 27% market share. Bagpiper Whisky was launched in 1976 by Herbertsons which was acquired by the UB Group in 1973. With a distinct style and blend, Bagpiper is been promoted as the whisky of the cinestars, endorsed by the reigning macho heartthrob. Bagpiper has many firsts to its credit including the guala caps and tetra packs. Bagpiper is exported to 22 countries. The brands promise of Khoob Jamega Rang jab mil baithenge teen yaar... Aap, Mein Aur Bagpiper is synonymous with the Bollywood glamor. Bagpiper Whisky is known for its strong blend and light malt-like aroma with a hint of woody/earthy character at the background. The malt spirits used in the blend are chosen from malts matured in pre-identified American oak casks. These malt spirits, when blended in certain proportions, give a smooth woody aroma to the whisky.

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MC DOWELLS CELEBRATION

Mc Dowells Celebration Rum is the 2nd largest rum in the world and a market leader in India. Available in 2 variants - No.1 Celebration Rum and No.1 Celebration Rum Dry & White, both of which are matured, distilled and blended with exceptional finesse. It captures the traditional roots of rum making and full credit to the Master Blender who did a rigorous study before creating this superior blend. Its chocolate brown texture makes it full-bodied rum with richness of toffee and caramel in its aroma. Take a sneak peek at the residential bar of any defense personnel you can be doubly sure to find atleast one bottle of Celebration Rum.

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BOUVET-LADUBAY

With the acquisition of BOUVET-LADUBAY in July 2006, the UB Group has made a strategic entry into the wines category. BOUVET-LADUBAY based in Saumur in the Loire Valley region in France, has a heritage of over 160 years. BOUVETLADUBAY has won many International Awards and Recognition for the longstanding quality of its fine Sparkling Wines. (360 Medals, 100 Gold Medals until today). BOUVET-LADUBAY considers Wine as Lifestyle Art the French "Art de Vivre" & has always been partnering with Arts : Contemporary Art through its Art Center, Theatre through its 19th Century Theatre, Cinema through numerous events during each year Cannes Film Festival for instance for over 15 years. The Company currently produces 5.5 Million bottles per annum and has a 8 Million bottles production capacity through its new Winery BOUVET-LADUBAY Full Metal inaugurated in December 2008 by Dr Vijay Mallya, Mr Ravi Nedungadi and his Excellency Ranjan Mathai, Indian Ambassador to France.

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PINKY

Its pink with an exotic combination of flowers and fruit. Packaged in its chic perfumed styled bottle, Pinky offers a shot of sheer feminity. Created in Sweden by champion wine tasters, Pinky owes its elegance and distinctive pink taste to a bouquet of violets, rose petals, wild strawberries and other botanical herbs hand blended into the vodka after distillation for maximum flavor. To accentuate its sensuous appeal the brand name is printed in metallic silver on a black layered mono carton. The brands unusual typeface adorned with rose thorns suggests its beauty while alluding to its ingredients.

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ROMANOV

Romanov gets its name from the last czar of Russia and true to its calling remains committed to the finest vodka making, the way Russians traditionally made their vodkas. A premium offering for the fastest growing vodka consumers in the country, Romanov is at the forefront of all innovations. The finest grains from different harvest seasons are fermented with utmost care to retain all the natural characters. With multidistillation and multi-filtration techniques, a never before blend of Romanov Red is finally blended to perfection with a rigorous 7 step manufacturing process. Keeping in step with the changing times Romanov offers 2 peppy flavors namely Green Apple and Tropical Thrill, orange,lemon. A World class triple-distilled blend with a tinge of de-mineralized water, Romanov induces a sense of refreshing energy, and its piquancy leaves you craving for more.

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WHITE MISCHIEF

White Mischief is triple-distilled vodka filtered to the highest levels of purity to ensure the flamboyant spirit of youth - its core essence being flirtatious mischief. The clean and dry Extra Neutral Alcohol is blended in close supervision and strict quality control parameters to ensure a high quality vodka blend. The frosty and smooth look of the bottle with shades of royal blue and white on the vial stand for the stylish youth of today. White Mischief is the market leader today with 46% market share.

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FOUR SEASONS

Four Seasons range of premium wines is a delight for every season. Be it sprightliness of a fresh spring morning, the joyous warmth of a glorious summer afternoon the tingling nip of a crisp autumn twilight or the biting chill of an icy winter night, it offers wines in 6 distinct flavors - Sauvignon Blanc, Chenin Blanc, Blush, Cabernet Sauvignon, Shiraz and Zinfandel. Four Seasons uses fine French varieties of wine grapes cultivated in the Western Ghats of Maharashtra to produce wines at the stateof-the-art winery in Baramati. The lush rolling Western Ghats which occupies almost 1000 acres of Nasik and Sahyadri ranges offer not just a breathtaking landscape of beauty but are endowed with the perfect natural conditions to nurture the grapes. All thanks to Mr. Abhay Kewadkar the Cheif Winemaker and Business Head for the UB Group who seamlessly used his expertise in setting up its wine business.

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3.2 AVIATION

OVERVIEW OF AVIATION INDUSTRY IN INDIA

Aviation Industry in India is one of the fastest growing aviation industries in the world. With the liberalization of the Indian aviation sector, aviation industry in India has undergone a rapid transformation. From being primarily a government-owned industry, the Indian aviation industry is now dominated by privately owned full service airlines and low cost carriers. Private airlines account for around 75% share of the domestic aviation market. Earlier air travel was a privilege only a few could afford, but today air travel has become much cheaper and can be afforded by a large number of people. The origin of Indian civil aviation industry can be traced back to 1912, when the first air flight between Karachi and Delhi was started by the Indian State Air Services in collaboration with the UK based Imperial Airways. It was an extension of LondonKarachi flight of the Imperial Airways. In 1932, JRD Tata founded Tata Airline, the first Indian airline. At the time of independence, nine air transport companies were carrying both air cargo and passengers. These were Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways. After partition Orient Airways shifted to Pakistan. In early 1948, Government of India established a joint sector company, Air India International Ltd in collaboration with Air India (earlier Tata Airline) with a capital of Rs 2 crore and a fleet of three Lockheed constellation aircraft. The inaugural flight of Air India International Ltd took off on June 8, 1948 on the Mumbai-London air route. The Government nationalized nine airline companies vide the Air Corporations Act, 1953. Accordingly it established the Indian Airlines Corporation (IAC) to cater to domestic air travel passengers and Air India International (AI) for international air travel passengers. The assets of the existing airline companies were transferred to these two corporations. This Act ensured that IAC and AI had a monopoly over the Indian skies. A third government-owned airline, Vayudoot, which provided feeder services between smaller cities, was merged with IAC in 1994. These governmentowned airlines dominated Indian aviation industry till the mid-1990s. In April 1990, the Government adopted open-sky policy and allowed air taxioperators to operate flights from any airport, both on a charter and a non charter basis and to decide their own flight schedules, cargo and passenger fares. In 1994, the Indian Government, as part of its open sky policy, ended the monopoly of IA and AI in the air transport services by repealing the Air Corporations Act of 1953 and replacing it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 75

1994. Private operators were allowed to provide air transport services. Foreign direct investment (FDI) of up to 49 percent equity stake and NRI (Non Resident Indian) investment of up to 100 percent equity stake were permitted through the automatic FDI route in the domestic air transport services sector. However, no foreign airline could directly or indirectly hold equity in a domestic airline company. By 1995, several private airlines had ventured into the aviation business and accounted for more than 10 percent of the domestic air traffic. These included Jet Airways Sahara, NEPC Airlines, East West Airlines, ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania Airways. But only Jet Airways and Sahara managed to survive the competition. Meanwhile, Indian Airlines, which had dominated the Indian air travel industry, began to lose market share to Jet Airways and Sahara. Today, Indian aviation industry is dominated by private airlines and these include low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made air travel affordable. Airline industry in India is plagued with several problems. These include high aviation turbine fuel (ATF) prices, rising labor costs and shortage of skilled labor, rapid fleet expansion, and intense price competition among the players. But one of the major challenges facing Indian aviation industry is infrastructure constraint. Airport infrastructure needs to be upgraded rapidly if Indian aviation industry has to continue its success story. Some steps have been taken in this direction. Two of India's largest airports-Mumbai and New Delhi-were privatized recently. Two greenfield airports are coming up at Bangalore and Hyderabad in southern India. Investments are pouring into almost all aspects of the industry, including aircraft maintenance, pilot training and air cargo services. The future prospects of Indian aviation sector look bright.

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AVIATION BUSINESS OF UB: KINGFISHER AIRLINES

On May 8, 2005, "the king of good times" had more than one reason to celebrate. Not only was it Vijay Mallya's son Siddhartha's 18th birthday, it was also the launch of his Kingfisher Airlines (KFA).

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Mumbai's Air-India hangar had 2,000 guests -- industrialists, top politicians, glitterati and the media -- sipping champagne and checking out the impressive new Airbus A320 aircraft, flanked by Kingfisher's red-liveried hostesses. In seven months, KFA has earned Rs 200 crore (Rs 2 billion), flown over 500,000 passengers, grown to a fleet of nine Airbus A320 and expanded from four flights a day to 56. The 25-million seats Indian aviation industry was growing at 20 per cent, but it was on the backs of the new, low-cost players. Entrenched players like Indian Airlines and Jet Airways, too, were slashing ticket prices to cater to the new breed of have-ticketwill-travel passengers. The challenge for the new airline was to stand out in the crowd. The way ahead was clear: extend the Kingfisher brand into aviation, and focus on the young business traveller.

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KINGFISHER AIRLINES LAUNCH STRATEGY Backed with an ad budget of Rs 25 crore, KFA began its ad campaign a few weeks before the launch, booking every possible touch point relevant to the business traveller. Newspaper ads, radio spots, and a presence in up market stores like Westside and Shoppers' Stop, premium clubs like the Cricket Club of India, even restaurants like Tendulkar's. Competitions and quizzes with free KFA tickets as prizes ensured customer interest.

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In mid-August, KFA launched its second campaign -- "Freedom from boring air travel" -- to coincide with Independence Day. In keeping with the patriotic theme, KFA's trademark red carpets were laid out in the Mumbai up market Inox multiplex, to welcome moviegoers to Mangal Pandey : The Rising. Customer interest was definitely hooked, not least because of Mallya himself. Media analysts credit a large part of KFA's success to its flamboyant promoter and his directly addressing the press and customers. Kingfisher's adopted a PR-driven communication instead of a regular, advertisingdriven communication. The value-adds have been critical for KFA too. Attractive cabin crew in designer uniforms, gourmet meals and personal screens for each seat add to the premium experience. On board, passengers watch a safety video featuring model-actress Yana Gupta and can then choose from five video channels and 10 radio channels. They are called "guests" and given gifts at the end of the flight -- sachets of flavoured tea and umbrellas during the monsoon.

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PRICING
The price segments that kingfisher targets is the higher income group as well as the upper middle class background. There are a few segments that are majorly for the youth and the high lifestyle segments. Sec A, sec B+ socio economic class mainly in the age group of 25-45 years are the main segments for which there are specific prices offered by Kingfisher. Some of the services offered by Kingfisher emphasize on their policy to target those segments that are willing to pay for luxury.

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MACRO ENVIRONMENT FACTORS AFFECTING THE BUSINESS OF KINGFISHER AIRLINES

POLITICAL FACTORS
OPEN SKY POLICY The Indian government announced the implementation of an Open Sky policy in the aviation sector in 2005. This policy enables private air carriers to freely operate within the nations that are a part of the agreement with India, namely the ASEAN nations, United Kingdom and the United States of America. Prior to the implementation of this policy, private air carriers could operate only within the country and some operators were allowed to operate international flights but with special permission from the ministry. This policy has enabled the growth of the aviation industry as well as develops better ties, commerce and tourism with the participating nations. Also, the introduction of this policy means an end to the monopoly enjoyed by the state-controlled international carrier Air India, for a long time. With the entry of new players, the sector will witness increased investment, better service and quality and a drop in fares which will benefit the traveler greatly.

FDI LIMITS
The Foreign Direct Investment in the Indian aviation sector was raised to 49% in July 2004. The government also proposed to withdraw tax exemptions on aircraft leasing. The FDI limit was 40% earlier. The increase in the limit saw increased investment in the aviation sector and its infrastructure but the withdrawl of tax exemption on aircraft leasing was widely criticized as it would hamper the growth of the low-cost airlines existing in India. Kingfisher acquired a controlling stake in the low-cost carrier Air Deccan in 2007 and renamed it Kingfisher Red. The move to withdraw tax exemptions for leasing aircraft has affected the cost and infrastructural capabilities of the airline. The airline will now have to purchase aircraft in order to expand its service and reach resulting in increased long-term cost and a larger time-frame to break even.

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ECONOMIC FACTORS
CONTRIBUTION TO THE ECONOMY
With a growth rate of 18 per cent per annum, the Indian aviation industry is one of the fastest growing aviation industries in the world. The government's open sky policy has led to many overseas players entering the market and the industry has been growing both in terms of players and number of aircrafts. India has jumped to 9th position in world's aviation market from 12th in 2006. The scheduled domestic air services are now available from 82 airports as against 75 in 2006. Kingfisher Airlines has been giving stiff competition to the leading player Jet Airways, since it was launched in 2005. With the easing of regulations in the sector and increasing growth, Kingfisher will have a large role to play in developing and growing the aviation sector in India and its contribution to the economy.

RISING COST OF FUEL

The high cost of Air Turbine Fuel (ATF) and skyrocketing oil prices have severely impacted the revenues and profits of the various players in the aviation industry. India has the highest prices of ATF in the Asia Pacific region and this has taken its toll on the bottom lines of the various airlines. Around 40 percent of an airline tickets cost is charged to cover fuel expenses of the airline. An increase in ATF prices and crude oil cost results in an increase in the price charged to the consumer. This has an adverse effect in a growing market like India as travelers opt for cheaper modes of transport. Moreover, low-cost airlines are the worst-affected in case of an increase in fuel prices. Kingfisher Airlines has been adversely affected by rising fuel prices. As of July 2009, Kingfisher Airlines owed three state-run oil companies a total of Rs.950 crore. The dues of Kingfisher, as of other airlines, had started accumulating from the current fiscal year, when jet fuel prices soared on record high crude oil prices.

INVESTMENT IN THE SECTOR

The Indian Civil Aviation market grew at a compound annual growth rate (CAGR) of 18 per cent, and was worth US$ 5.6 billion in 2008. The Centre for Asia Pacific Aviation (CAPA) forecasted that domestic traffic will increase by 25 per cent to 30 per cent till 2010 and international traffic growth by 15 per cent, taking the total market to more than 100 million passengers by 2010.

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By 2020, Indian airports are expected to handle more than 100 million passengers including 60 million domestic passengers and around 3.4 million tonnes of cargo per annum. Moreover, significant measures to propel growth in the civil aviation sector are on the anvil. The government plans to invest US$ 9 billion to modernise existing airports by 2010. The government is also planning to develop around 300 unused airstrips.

RECESSION
The Indian economy has been booming in the last few years, the India aviation industry was expanding too. There were new budget airlines and private players like Vijay Mallya's King Fisher coming in to play and thus making the public sector Air India and Indian Airlines more competitive in the process. As there were more flights coming in to business, the number of job opportunities in the industry has also gone up. Then the US economic recession came. India was hoping that it would not be affected by the global economic recession. But those hopes are not found to be true. Slowly the effects of recession have reached India too. And it affected the aviation industry of India too. As the cash starved managements started looking for cost cutting measures, lay offs started to come in to action. Right now, it is a sober moment for the aviation industry in India. But it would come back up on its feet and be on the run again soon.

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SOCIAL FACTORS
DEVELOPMENT OF CITIES AND INFRASTRUCTURE
The development of the metropolitan and cosmopolitan cities in India and the rise of the tier-II and tier-III cities such as Ahmedabad, Jaipur, Pune, Visakhapatnam, Guwahati etc, has resulted in high income levels and facilities to these areas. Better standards of living have helped in the introduction and growth of airlines in these cities leading to the development of infrastructure such as airports and hangars. This has enabled the aviation industry to tap into the large group of middle class households with high disposable incomes. This segment of the population has been the key driver of growth in the aviation industry.

AIRLINE TRAVEL AS STATUS SYMBOL

Until the development of the aviation sector in India recently, air travel was out of reach of a majority of the population. High tariffs and the existence of a small number of players were hindering the accessibility to the aam junta. Hence, air travel was a luxury available only to the affluent and well-off, and considered a status symbol. Although air travel is much more widely available and accessible today, it is still considered a status symbol.

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TECHNOLOGICAL FACTORS

GROWTH OF E-COMMERCE AND ONLINE TICKETING

Electronic commerce (or e-commerce) encompasses all business conducted by means of computer networks. Advances in telecommunications and computer technologies in recent years have made computer networks an integral part of the economic infrastructure. More and more companies are facilitating transactions over web. There has been tremendous competition to target each and every computer owner who is connected to the Web. Although business-to-business transactions play an important part in e-commerce market, a share of e-commerce revenues in developed countries is generated from business to consumer transactions. E-commerce provides multiple benefits to the consumers in form of availability of goods at lower cost, wider choice and saves time. People can buy goods with a click of mouse button without moving out of their house or office. Similarly online services such as banking, ticketing (including airlines, bus, railways), bill payments, hotel booking etc. have been of tremendous benefit for the customers. Most experts believe that overall e-commerce will increase exponentially in coming years. Business to business transactions will represent the largest revenue but online retailing will also enjoy a drastic growth. Online businesses like financial services, travel, entertainment, and groceries are all likely to grow. For developing countries like India, e-commerce offers considerable opportunity. Ecommerce in India is still in nascent stage, but even the most-pessimistic projections indicate a boom. It is believed that low cost of personal computers, a growing installed base for Internet use, and an increasingly competitive Internet Service Provider (ISP) market will help fuel e-commerce growth in Asias second most populous nation. Amongst the Asian nations, the growth of e-commerce in India between 1997 and 2003 was highest in India. Cridit Lyonnais forecasts that India will have 30 million Internet users by 2004 and that the potential Internet market will reach 47 million households in 2005. According to a McKinsey-Nasscom report by the year 2008, e-commerce transactions in India are expected to reach $100 billion. Indian middle class of 288 million people is equal to the entire U.S. consumer base. This makes India a real attractive market for e-commerce. To make a successful ecommerce transaction both the payment and delivery services must be made efficient. There has been a rise in the number of companies' taking up e-commerce in the recent past. Major Indian portal sites have also shifted towards e-commerce instead of depending on advertising revenue. Many sites are now selling a diverse range of products and services from flowers, greeting cards, and movie tickets to groceries, electronic gadgets, and computers. With stock exchanges coming online the time for true e-commerce in India has finally arrived. On the negative side there are many challenges faced by e-commerce sites in India. The relatively small credit card population and lack of uniform credit agencies create a variety of payment challenges 87

unknown in the United States and Western Europe. Delivery of goods to consumer by couriers and postal services is not very reliable in smaller cities, towns and rural areas. However, many Indian Banks have put the Internet banking facilities in place for the up coming e-commerce market. The speed post and courier system has also improved tremendously in recent years. Modern computer technology like secured socket layer (SSL) helps to protect against payment fraud, and to share information with suppliers and business partners. With further improvement in payment and delivery system it is expected that India will soon become a major player in the e-commerce market. While many companies, organizations, and communities in India are beginning to take advantage of the potential of e-commerce, critical challenges remain to be overcome before e-commerce would become an asset for common people.

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DEMOGRAPHIC FACTORS
AGE
Around 70% of Indias population comprises of people under the age of 35 which makes India one of the youngest nations in the world. With a rapidly growing economy and increasing job and career opportunities, the propensity to travel within and outside the country has increased for the average urban Indian. Airlines offer a variety of packages and pricing to the upwardly-mobile young urban Indian. There is an increased focus on this segment as marketers have the opportunity to create customers for the long-run.

INCOME
With a burgeoning economy and high disposable incomes, Indians have begun to travel like never before. With the existence of a large number of airlines, people have a variety of options for air travel within and outside the country. Also, the low-cost airline model has greatly benefited the industry as the middle income group of the population has begun travelling by air, thus benefiting both the airline companies and the economy.

NATURAL ENVIRONMENT
With the increased concern about global warming and the effects of development and industrialization on the environment, organizations are trying to make their businesses as ecologically sustainable as possible. The aviation industry particularly has been facing a lot of flak as it consumes large quantities of fuel, which causes depletion of the natural resource. The industry also faces the problem of high carbon emissions which harm the environment.

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Kingfisher Airlines - SWOT Analysis

Kingfisher's meteoric rise has taken rival and unquestioned number one domestic carrier in the country, Jet Airways, quite by surprise. Used to competing with only Sahara, Jet enjoyed several years of unfettered success after it had trounced Indian Airlines' monopoly and market, becoming India's premier airline since 1993. This supremacy has now been challenged by a nimble and aggressive Kingfisher which, in just two years and following Mallya's buyout of Air Deccan, is commanding the same market share as Jet Airways and Jetlite. In its initial avatar Kingfisher was aiming to be a low-fare carrier, but soon after its launch Mallya converted it to premium service, taking Jet head-on. Mallya is spending money like water (the airline lost Rs 400 crore in the first year) and has left no stone unturned to grab Jet's market, launching direct advertising campaigns asking Jet fliers to convert to Kingfisher, luring them with miles, better food and a slicker, cooler yet equally efficient option.

Other than the corporate flyer, Kingfisher is trying to attract the young, upwardly mobile Indian who aspires to fly Kingfisher simply because he identifies with Mallya and his style statement of living life kingsize. Mallya's passion for his airline is very clear. In 2006, Jet's initial troubles were compounded by its messy buyout of Air Sahara which many feel was simply a move to thwart Kingfisher from acquiring it. Against the advice of his senior colleagues, Goyal offered Rs 2,300 crore (Rs 23 billion) for it, a pretty high price for the airline.

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STRENGTHS
Superior product on ground; in the air Jet business class is being equated with Kingfisher's economy. UB group backing for raising financing. Well capitalised airline, prepared to take losses. Better handling of employees and staff; less centralised style of functioning. Chairman Mallya's grand vision where it is looking to be among the best in the world. The Deccan deal - which gives it market share, a new market segment and was cheap.

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WEAKNESSES
Kingfisher is yet to build itself into an organisation; structures yet to fall in place. Not as professionally run as Jet; yet to build a professionally competent team. Mallya's knowledge of the sector does not parallel Goyal's. Chairman's people skills are better but employees have to work very erratic hours. Unable to leverage connections to the same extent while lobbying. Kingfisher's loads are lower than Jet's, which could be a reflection of its marketing and sales ability

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OPPORTUNITIES
Under penetrated domestic market International market Untapped air cargo market Expanding tourism industry

THREATS
Existing operators like Jet and other low-cost airlines Problems with infrastructure securing new aircraft and hangars High Air Turbine Fuel (ATF) prices The slowdown in the economy

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MARKETING MIX OF KINGFISHER AIRLINES

THE 7 Ps OF MARKETING
PRODUCT Fleet size All new aircraft International foray PROMOTIONS Advertisements Magazine and Newspaper ads Exposure at non-corporate events Participation in International air shows Events like IPL (Bangalore Royal Challengers) and Force India Kingfisher Calender PRICE Dynamic pricing model - Multiple fare levels Uniform rules No hidden restrictions. Pricing model - 8 different levels Discounts provided from time to time

PEOPLE Backbone of the brand Extensive training Kingfisher Training Academy Hospitality industry and treat their customer as Guests Interpersonal skills, aptitude, and service knowledge PLACE Online Booking - www.flykingfisher.com Online Booking - Yatra.com, MakeMyTrip.com, ezeego1.com Credit Cards & Debit Cards Payment SMS / Call Outlets in every major city and at every airport across the country

PHYSICAL EVIDENCE Personal valets Exclusive lounge space 94

Hi! Blitz Gourmet cuisine world class cabin crew 5 trendy video- Fun TV; 10 music stations -Kingfisher Radio

PROCESS Booking the ticket - online booking/ tele-booking or from any of the kingfisher outlets

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3.3 Fertilizer
Mangalore Chemicals & Fertilizers Limited
Mangalore Chemicals and Fertilizers Limited (MCF), with a turnover of over Rs.2,470 Crore (FY 2008-2009), is the only manufacturer of chemical fertilizers in the state of Karnataka. The factory is strategically located at Panambur, 9 km north of Mangalore City, on the banks of the Gurpur River, in front of the New Mangalore Port. The plant is well connected, both by rail and road. The West Coast National Highway (NH-l7) from Kochi to Mumbai separates MCF from the New Mangalore Port. The Company is a part of the UB Group with Group shareholding of 30.44%. Dr. Vijay Mallya is Chairman of the Board of Directors. The operations are managed by a team of highly dedicated and experienced professionals. The New Mangalore Port is an all-weather port capable of handling ships up to 30 feet draft. Naphtha, Fuel Oil, Ammonia and Phosphoric Acid - the main raw material are obtained through the port. The plant site is well linked, both by rail and road. The Company has capacity to manufacture 2,17,800 MT Ammonia (intermediate product), 3,79,500 MT Urea, 2,55,500 MT Phosphatic Fertilizers (DAP & NP 20:20:00:13), 15,330 MT Ammonium Bi-Carbonate (ABC) and 33,000 MT Sulphuric Acid (SAP) annually. The design and engineering of the Ammonia/Urea plants was done by Humphreys & Glasgow Limited, London, a leading international firm in the fertilizer field and their associates, Humphreys & Glasgow Consultants Pvt. Ltd., Bombay. (The firm is now merged with Jacobs Engineering, USA). The Phosphatic plant is designed and engineered by Toyo Engineering Corporation, Japan. PDIL and Furnace Fabrica the Indian firms were involved in the construction of ABC and SAP respectively. The construction work started with the first pile driven on October 15, 1972 by the then Chief Minister, Shri D. Devaraj Urs.

96

The Ammonia/Urea plants were commissioned in March 15, 1976. 1976 - Ammonia & Urea production commenced 1982 60 tons per hour auxiliary boiler installed Ammonium Bi-carbonate plant commissioned

1984 - Purge gas recovery unit installed 1985 - Captive power plant commissioned 1986 - Di-ammonium phosphate plant went on stream 1993 - 2.5 Million Gallons reservoir constructed 1999 - Marketing of Granulated Fertilizers 2002 - Installation of Pipe Reactor. 20:20:0 & 16:20:0 complexes produced Marketing of micro nutrient - Zinc Sulphate 2003 - SAP R/3, integrated software system, OPERATION MITE, implemented. MCF receives ISO 14001 Certification 2005 - Receives OHSAS certification 2006 - Installation of 100 TPD Sulphuric Acid plant 2008 - Installation of Imported Fertilizers Handling Unit

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BOARD OF DIRECTORS

Dr. Vijay Mallya, is the Chairman of the $ 2 billion UB Group. Dr. Mallya took over the reins of the Group in 1983 at the age of 28 and has, since then, steered the UB Group to a multinational conglomerate. Instrumental in shaping the Kingfisher brand as one of the most popular beers across the globe. Dr. Mallya has received several awards both in India and overseas. He was conferred a Doctorate in Philosophy in Business Administration ( honoris causa ) by the University of Southern California and nominated as a Global Leader for tomorrow by the Geneva based World Economic Forum ( WEF). In recognition of Dr. Vijay Mallyas contribution to the development of Trade and Industry in Karnataka, the Federation of Karnataka Chambers of Commerce and Industry conferred upon him Sir M. Visveswaraiah Memorial Award for the year 2001. Dr. Mallya is a former Member of Parliament and on board of several Public Companies in India and abroad. Mr. S. R. Gupte, Handled diverse assignments in sectors like finance, administration and personnel with oil major Caltex and airline major Air India, both in India and abroad for more than two decades. He joined Air India in 1969 and worked in various positions in India and abroad. He was entrusted with the functions of Deputy Managing Director and took over in the acting capacity as Chairman and Managing Director of Air India in 1990. Mr. Gupte joined the UB Group in March 1992 as Executive Vice Chairman and is on the Board of a number of Public Limited Companies. He has been on the Board of the Company from December 1996.

Dr. Vijay Mallya Chairman

S. R. Gupte UB Group Nominee

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Mr. Deepak Anand, has over 36 years senior managerial experience in India and Overseas with large companies. He started his career in the management consultancy division of A.F.Ferguson & Co. (AFF), the then largest firm of chartered accountants and management consultants in India. During his 15 years (1973-1988) with AFF, he rose to become a Director in the Firm and directed assignments in India and abroad. Mr. Anand joined the UB Group in 1988 as Senior Vice President, Corporate Planning and Coordination. He held various senior management positions in the group including Head of Liquor manufacturing, CEO of Kissan Food Products and CEO of UB Global Corporation Ltd ( UBGCL ). Mr. Deepak Anand, took over as Managing Director of Mangalore Chemicals & Fertilizers Limited, in April 2005. MCF has been growing rapidly under his leadership. Mr. Anand is now charting out a new vision and growth strategy for the Company.

Deepak Anand Managing Director

Mr. Shrikant G Ruparel, was the Managing Director of Kolhapur Sugar Mills between 1971 and 1981. He was also on the board of State Bank of India for 18 years. He held Chairmanships of various companies and councils including Indo-US joint Business Council, Indo-France joint Business Council and Indo-Swedish Business School. Shrikant G Ruparel Independent Director Mr. Ruparel is also on the Advisory Board of Stanford Research Institute and holds important positions in various other educational centres. He is on the Board of several public Companies.

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Mr. Pratap Narayan, started his career in the Sales Tax Department of Madhya Pradesh. He worked in Indian Railways in various capacities before taking over as Deputy Director and Joint Director Planning in Railway Board. Mr. Pratap Narayan was the first Executive Director of Fertilizer Industry Co-ordination Committee and retired as a Director General of the Fertilizer Association of India. He has taken up various international assignments and was member of various committees appointed by the Government on policy issues such as Gokak Committee to review pricing of phosphates and energy consumption norms under Stage II of new pricing scheme for Indian Urea Industry etc., Mr. Narayan has co-authored a book with Dr. H L S Tandon on Indian Agriculture, Past, Present and Future. Mr. N Sunder Rajan, served in various capacities in the Finance Ministry, Ministry of Tourism and Civil Aviation, Lok Sabha Secretariat and the Office of the Director of Audit, Washington DC before retiring as Deputy Comptroller and Auditor General of India. He has served on the Boards of Vayudooth Limited, Hotel Corporation of India Limited, Airline and Allied Services Limited. He retired from the Government in May 2003 as Deputy Comptroller and Auditor General of India.

Pratap Narayan Independent Director

N. Sunder Rajan IndependentDirector

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Mr. B S Patil, IAS, held several important assignments. He has wide ranging experience from heading State financial institutions to industrial development. The industrial and IT development in Karnataka owes a great deal to him for initiating imaginative policies for attracting investments. He retired as the Chief Secretary to the Government of Karnataka. B. S. Patil, IAS Independent Director Mr. Prabhakar Rao, has been working with MCF since 1978 and has handled various responsibilities in the Company. As Director (Works), he is presently responsible for production, maintenance, quality control, technical services, projects, safety and logistics at the Companys plant in Mangalore. Mr. Rao has widely travelled and participated in many National and International symposiums. He has attended various Management Development Programs in premier Institutions such as IIM Bangalore & Ahmedabad.

K. Prabhakar Rao Director (Works)

101

Management Team

Deepak Anand K. Prabhakara Managing Director Rao Director (Works)

Mr.V.C.Prakash Vice President (Marketing)

S. Ramaprasad Senior Vice President (HR & Legal) & Company Secretary

K. Raghuveeran Vice President (Finance)

102

PRODUCTS OF MANGALORE CHEMICALS & FERTILIZERS LIMITED

Mangala Urea

Product Description

Urea is a Synthetic organic compound containing 46% Nitrogen in Amide form. Available in the form of white solid prills free flowing for easy application. Being Hygroscopic, urea is packed in moisture proof High Density Poly Ethylene bags.

Details Features & Benefits

Less acidifying than many other nitrogenous fertilizers. Hence most suited for high pH soils. High concentration of nutrients makes packing, storage and transport cost cheaper.

Application

Can be applied to soil. Also suitable in solution form as spray. Application is recommended in split doses for better use efficiency.

Technical Details

Moisture per cent by weight (Maximum) - 1% Total Nitrogen per cent by weight (Minimum)- 46% Biuret percent by weight (Maximum) - 1.5%

Packing

Packing - 50 kg HDPE Bag 103

Mangala DAP

Product Description`

DAP contains the second most important primary nutrient element, Phosphorous besides Nitrogen, Single most important source of nutrient Phosphorous. Available in free flowing granular form. For differentiation with other low analysis compound fertilizers, DAP granules are coloured with black. Granules are stronger, harder and of uniform size.

Details Features & Benefits

It is completely soluble in Water It has good storage properties. Total water soluble P2O5 helps plants to utilise moisture better and makes roots grow stronger and deeper even in acidic soils Being non- hygroscopic, DAP can be conveniently stored well even in high rainfall areas High concentration of nutrients makes packing, storage and transport costs per unit cost of nutrient very low. Nitrogen being present in an easily absorbed Ammoniacal form, loss due to leaching is minimum.

104

Application

DAP is suitable for all crops and soils Recommended for initial application

Technical Details

Moisture per cent by weight (Maximum) - 1.5% Total Nitrogen per cent by weight (Minimum) - 18% Ammoniacal nitrogen form per cent by weight (Minimum) - 15.5% Total Nitrogen in the form of Urea per cent by weight (Maximum) - 2.5% Neutral ammonium citrate soluble phosphates (P2O5) per cent by weight (Minimum) - 46% Water soluble Phosphates (as P2O5) per cent by weight (Minimum) - 41%

Packing

Packing - 50 kg HDPE Bag

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Mangala 20:20:00:13

Product Description

Contains 20% Nitrogen & 20% P2O5 Contains 13 % Sulphur, a Major Secondary plant nutrient. Granules are uniform and light grey in colour

Details Features & Benefits

It has good storage properties. Least hygroscopic and does not readily absorb moisture from the air. It can be kept indefinitely without quality deterioration Due to high water solubility, has a greater mobility in the soil. Being non- hygroscopic, can be conveniently stored well even in high rainfall areas

Application

Suitable for all crops both for initial application and top dressing Granules are stronger, harder and of uniform size which facilitates easy application.

Technical Details

Moisture per cent by weight (Maximum) - 1% Total Nitrogen per cent by weight (Minimum) - 20% Ammoniacal nitrogen form per cent by weight (Minimum) - 18% Total Nitrogen in the form of Urea per cent by weight (Maximum) - 2% Neutral ammonium citrate soluble phosphates (P2O5) per cent by weight (Minimum) - 20% 106

Water soluble Phosphates (as P2O5) per cent by weight (Minimum) - 17%

Packing

Packing - 50 kg HDPE Bag

107

SULPHURIC ACID Product Description

Colorless, nonflammable liquid. Sulphuric acid (H2SO4) monohydrate is very hygroscopic.

Details Features & Benefits

Sulphuric acid is the strong mineral acid. It is soluble in water at all concentrations. Sulfuric acid has many applications and is one of the exhaustively used chemicals in chemical industry.

Application

Used as an intermediate for manufacturing of phosphatic fertilizer. Used in lead-acid batteries.

Technical Details (as per IS 266:1993)

Total acidity (as H2SO4) percent by mass, min 98.00% Residue on Ignition percent by mass, max. 0.050% Iron (as Fe) percent by mass, max. 0.010% Lead (as Pb) percent by mass, max. 0.005% Arsenic (as As) percent by mass, max. 0.004%

For Battery Grade:

Iron (as Fe) ppm, max. 20

Packing

Transport by road tank truck.

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CHEMCF NL - SULPHONATED NAPHTHALENE FORMALDEHYDE LIQUID :Product Description

ChemCF NL is an aqueous solution of Sulphonated Naphthalene Formaldehyde, Sodium salt polymer. This is an excellent dispersing agent. It is a powerful water reducing element in Concrete Admixtures. Engineered & designed to offer wider tolerances in formations of admixture manufacturing. Compatible with most of the additives used in admixture formulations which helps in producing versatile applications.

Details Features & Benefits

Water reduction in concrete up to 18% - 25%. Higher slump with lower water / cement ratio. Flowable & pumpable concrete with improved rheology. Homogeneous, honey comb free, dense concrete. High strength due to reduced water / cement ratio.

Application

Construction industry: High Range water reducer in concrete. Textile industry: It works as an effective wetting agent in cotton. Leather industry: Used as a dying & leveling aid. Tanning industry: Acts as a good dispersing agent. Oil industry: Functioning as an anti friction agent in oil rigging operation.

Technical Details

Appearance : Brown coloured liquid Specific Gravity : 1.190 - 1.240 at 250 C pH Value : 8.0 - 10.0 Solid (%) : 40- 45 Sulphate content ( % ) : Max 4.00 Chloride Content : Maximum 250

Packing
Supplied in Bulk Tankers of 10 t, 16 t & 20 t capacity. It can also be supplied in customized pack size in HDPE barrels or jerry cans.

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CHEMCF NP - SULPHONATED NAPHTHALENE FORMALDEHYDE POWDER :

Product Description

ChemCF NP is a Sulphonated Naphthalene Formaldehyde (SNF) poly Condensate product. It is a powerful water reducing agent used for concrete and cement grouts. This is an excellent dispersing agent. Designed to offer wider tolerances in formulations for concrete admixture manufacturers. It is compatible with most of the additives used in admixture formulations. It helps in producing concrete with various unique properties.

Details Features & Benefits

Water reduction in concrete up to 25%. Higher slump with lower water cement ratio. Flow able & pump able concrete with improved rheology. Possess homogeneous, free from Honeycombing and dense concrete. High strength due to reduced water cement ratio.

Application

Construction industry: High Range water reducer in concrete. Textile industry: It works as an effective wetting agent in cotton. Leather industry: Used as a dying & leveling aid. Tanning industry: Acts as a good dispersing agent. Oil industry: Functioning as an anti friction agent in oil rigging operation.

Technical Details

Appearance : Brown coloured powder pH Value : 7.0 to 9.0 Solid (%): Minimum 93.0 110

Bulk Density (g/mL) : 0.60 0.80 Sulphate content (%) : Maximum 10

Packing

Packing Supplied in customized pack sizes of 25 kg and 40 kg HDPE bags

111

OTHER PRODUCT
MANGALA MOP

Product Description

Contains 60% Potash (K). By far the most widely used K fertilizer. Available in white and reddish crystalline form.

Details Features & Benefits

Readily dissolves in water On application to soil, it ionizes to dissociate into K & Cl ions. K gets attached or adsorbed on the soil complex. As such, though MOP is readily soluble in water, it is not leached. High concentration of nutrients makes packing, storage and transport costs per unit cost of nutrient very low.

Application

Extensively used in manufacture of compound fertilizers and also for direct application to the soil. Suitable for all crops both for basal application & top dressing Essential for all crops for healthy growth and better yields.

Technical Details

Moisture % by weight (Maximum) - 0.5 % Water soluble Potash (as K2O) per cent by weight (Minimum) - 60% Sodium as NaCl percent by weight (on dry basis) Maximum - 3.5 %

Packing

Packing - 50 Kg HDPE Bag 112

SPECIALTY FERTILIZERS
Speciality fertilizers are high analysis totally water soluble fertilizers. These are available in mono, double and multi nutrient combinations. They are available in liquid and crystalline forms and can be applied to plants through soil application (broadcasting), fertigation or foliar application to maximize fertilizer use efficiency and crop productivity, minimize production cost and to improve quality of crop and its produce.

Product Range

Mangala Bio20 Product Description

Mangala Bio 20 is a highly concentrated emulsion containing macro and chelated micro elements suitable for foliar spray and fertigation. It helps in better availability of essential nutrients to plants. It contains an organic material derived from a single seaweed variety which has proven beneficial effects on plants by stimulating metabolic activities in the plant system.

Details Features & Benefits

High quality product Available in saturated liquid form Mangala Bio20 is formulated also to maximize the production potential of crops at risk of damage from stress conditions such as temperature stress, moisture stress and disease stress.

113

Application

Mangala Bio-20 promotes greater root biomass and therefore helps maximize utilization of moisture and nutrients. It maximizes the production potential of crops that are at the risk of damage from stress conditions caused by high or low temperatures, excess soil moisture. Mangala Bio-20 is formulated to supply plants with essential plant nutrients. It has an organic material derived from a single seaweed variety that stimulates root development. It improves vegetative and reproductive activities in the plant system. It helps in increasing biomass production resulting in higher yields of improved quality.

Packing

50mL sachet, 250, 500, 1000 and 5000 mL HDPE containers

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MANGALA 3X

Product Description

Mangala 3X is a highly concentrated emulsion containing macro and chelated micro elements suitable for foliar spray and fertigation. It helps in supply of essential nutrients to plants.

Details Features & Benefits

Highly concentrated, Totally soluble in water Free flowing formulations for maximum bio- effectiveness on a wide range of crops. Fully water soluble fluid emulsion fertilizer containing NPK, magnesium and chelated trace elements

Application

Mangala 3X supplies plant with essential plant nutrients in balanced proportion. It is suitable for application at different stages of the crop. Its application stimulates metabolic activities improves growth, health of plants leading to better yields.

Packing

50mL sachet, 250, 500, 1000 & 5000 mL HDPE containers

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MANGALA CALMAX

Product Description

Mangala Calmax is a fully water soluble fluid emulsion product containing high level of calcium and balanced range of micro nutrients. Mangala Calmax is specifically formulated for use as a foliar fertilizer. It can be applied to all fruit and vegetable crops to improve fruit firmness, storability, colour, and skin finish.

Details Features & Benefits

Highly concentrated, free flowing formulation It can be applied to all fruit and vegetable crops to improve growth of plants and quality of produce.

Application

Calcium is a primary constituent of cell walls and membranes. Restriction in the availability of calcium will adversely affect cell division; impair the structural stability and the permeability of cell walls. Increasing fruit calcium promotes longer storage life and resists a range of physiological break down including soft nose, blossom end rot, bitter pit and internal browning.

Packing

250 mL, 500 mL and 1 litre

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MANGALA SULPHOMEX

Product Description

Mangala Sulphomex is a clear solution containing water soluble sulphur and nitrogen. Crops will respond immediately to application of Mangala Sulphomex. The nutrients will be rapidly absorbed and quickly utilized by the plant.

Details Features & Benefits

It will meet the sulphur requirement of all the crops Use of Mangala Sulphomex also avoids the unpleasant dusts and caking characteristics of many elemental products.

Application

Sulphur and nitrogen are major constituents of plant enzymes and proteins. Deficiencies of either element will be reflected in both crop yield and produce quality. Many arable crops including sugar beet, brassicas, cereals, and certain fruit crops will benefit from sulphur applications.

Packing

250, 500and 1000 ml

117

FERTIGATION PRODUCTS

This comprehensive range of powder formulations is manufactured only from technical grade raw material and blended to exacting quality standards. These ranges of products may be used in all fertigation systems to provide a balanced nutrient programme containing NPK, magnesium and essential microelements. With suitable dilution, the stock solution can be used in drip irrigation system or foliar spray. The products are fully water soluble.

PRODUCT RANGE

MANGALA 18-18-18+2MGO+TE

Product Description

18:18:18 has immediate beneficial effect on plant growth. 18:18:18 has better nutrient use efficiency, and maintaining soil fertility. 18:18:18 provides a balanced nutrition to crops.

Details Features & Benefits

Highly concentrated with high quality. Fully water soluble fertilizer containing NPK, magnesium and essential chelated micronutrients Free flowing formulations for maximum bio-efficacy on a wide range of crops.

118

Application

Nitrogen, phosphorus and potassium (NPK) along with micronutrients should be readily available to the growing crop. Deficiencies will negatively affect root and soot development, vigor of plant and yield. They help plants in bearing more flowers and fruits of improved quality. Magnesium is often deficient in crops grown on sandy soils and together with other micro nutrients is vital for chlorophyll and protein synthesis.

Packing

1 and 25 kg

119

MANGALA 19-19-19 :-

Product Description

19:19:19 application stimulates with immediate effect plant growth and development. 19:19:19 has high nutrient use efficiency. 19:19:19 provides a balanced nutrient containing NPK

Details Features & Benefits

It is highly concentrated with high quality containing NPK. It is totally soluble and free flowing for maximum bio-effectiveness on a wide range of crops.

Application

NPK improves vegetative and reproductive activities in the plant system. It helps in increasing biomass production. Its application improves bearing of flowers and fruits, and improves quality.

Packing

1 and 25 kg

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SOIL CONDITIONERS

In the changing agriculture scenario, where the fertile and productive land area is shrinking due to unscientific and surfeit use of chemicals and fertilizers, there is an urgency to correct the soil condition to suit for modern agriculture. Soil conditioners are termed as materials which when added to the soil help in improving or maintaining its physical conditions with improved physical and chemical health of soil that resultantly improve biological health. In the Integrated Nutrient Management approach, soil conditioners are integral part of the agronomic package. For precise application, soil conditioners are formulated specifically to tackle different problematic soils.

121

PRODUCT RANGE
MANGALA SETRIGHT FOR ALKALINE SOILS

Product Description

Mangala Setright for Alkaline Soils brings down the pH of alkaline soils and neutralizes the adverse properties. It improves physical and chemical health of the soil.

Details Feature & Benefits

It is powder form convenient for broadcast application. Efficient is rectification of soil pH and correction of adverse soil properties. Efficient at lower dosage than conventional soil amendments.

Application

Unfavorable soil conditions are the primary reasons for lower productivity of soil. Their rectification is prerequisite for a profitable agriculture. Mangala Setright for Alkaline soils application brings about the rectification more readily and efficiently. Mangala Setright for Alkaline Soils has to be mixed with soil at least 3 weeks prior to sowing or planting/transplanting.

Packing

50 kg HDPE bags.

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MANGALA SETRIGHT FOR ACIDIC SOILS Product Description

Mangala Setright for Acidic Soils brings increases the pH of acidic soils and neutralizes the toxicities. It improves physical and chemical health of the soil.

Details Feature & Benefits

It is powder form convenient for broadcast application. Efficient is rectification of soil pH and correction of adverse soil properties. Efficient at lower dosage than conventional soil amendments.

Application

Unfavorable soil conditions, such as low soil acidity, toxicity of certain ions such as Fe, Al, Mn etc, are the primary reasons for lower productivity of soil. Their rectification is prerequisite for a profitable agriculture. Mangala Setright for Acidic Soils application brings about the rectification more readily and efficiently. Mangala Setright for Acidic Soils has to be mixed with soil at least 3 weeks prior to sowing or planting/transplanting.

Packing

50 kg HDPE bags.

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ORGANIC PRODUCTS

The productivity of Indian soils has drastically come down. This has necessitated increasing the productivity per unit area per unit time. This is becoming difficult as the soil health has deteriorated alarmingly. One of the main reasons of this is the ever reducing soil organic matter content. Improving the soil organic carbon content by application of suitable organic matter and manures is the only option. For realising the benefit of application of organic matter, the product should be well decomposed and of good quality. Moreover, if the product can offer more benefits to the farmer than a mere organic manurial value, it is then the farmer realised more value for money. Considering this, MCF Limited has offered high quality organic products.

PRODUCT RANGE : BULKY ORGANIC MANURE MANGALA BIO GOLD

Product Description Mangala BioGold is a well decomposed organic matter fortified with neem cake, castor cake, pongamia cake and vermicompost. It contains N fixing bacteria - Azatobactor, Azosprillium; PSB and Trichoderma. Details Feature & Benefits High quality product available in free flowing brown powder form.

124

Improves soil health, repels soil borne insects and imparts tolerance to certain diseases. Creates a healthy rhizosphere.

Application The organic manure helps in improving the soil physical, chemical and biological properties there by it increases the fertility and productivity status of soil. There is a better root proliferation. Helps improving soil health, increases use efficiency of applied as well as natively available nutrients. Packing

40 kg HDPE bag.

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MANGALA GOLD

Product Description

Mangala Gold is an organic product containing humic substances in the form of humic acid, fulvic acid and humin. The humic substances are extracted from vegetable mold and also produced by action of acids on certain sugars and carbohydrates.

Details Feature & Benefits Mangala Gold is brown coloured well decomposed humic substance derived from vegetable and other organic origin. It application stimulates growth of roots and shoots. Improves soils CEC (Cation Exchange Capacity) and helps retention of nutrients and make them bio-available. Increases the water holding capacity of the soil thus improving the drought tolerance. Improves growth resulting in increased yield of improved quality produce. Application It is available as ready-to-use granule and liquid. Granules are to be applied preferably at sowing or at the initial stage of seedling establishment. Technical Details Mangala Gold Granule contains 1.5% humic substances. Mangala Gold Liquid contains 6.0% humic substances. Dosage Mangala Gold Granules : 5-10 kg/ac. Mangala Gold Liquid in : 1-2 L per ac. 126

Packing

Mangala Gold Granules in 5 kg Polypropylene Bag Mangala Gold Liquid in 5 litre Can

127

MANGALA NEEM ORGANIC MANUR

Product Description

Mangala Neem Organic Manure is a good quality neem product in the form of cake, pellets and powder. All the three forms are de-oiled.

Details Feature & Benefits High quality product. Available in free flowing powder, pellets and cake form. The oil content in the three forms is given below: Cake : 9-10% Pellets : 9-10 % Powder : 4%

The neem organic manure provides good organic value to the soil/crop. Improves fertility and productivity of the soil.

Application Neem Organic manure is a good organic manure source and acts as soil borne insect repellent against nematode, grubs, white ants and others. Neem acts as nitrification inhibitor and helps in slow release of nitrogen resulting in improving nitrogen use efficiency. Packing

50 kg HDPE bags

128

MANGALA ORGANIC GRANULES

Product Description

Mangala Organic Granules is an organic product containing bio-available amino acids, carbohydrates, seaweed extracts, herbal extracts and nutrient elements with bentonite material as the carrier.

Details Feature & Benefits

Mangala Organic Granules improves root-growing conditions and stimulate root growth. It enhances moisture retention capacity and imparts tolerance to stress.

Application Mangala organic granules help in improving the soil physics. It also helps in increasing the activity of soil fauna and microbes. It has to be applied at the time of sowing or planting/transplanting or at the initial stage of active growing period. Packing

5 and 10 kg

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Product Range : Concentrated Organic Nutrient Products Mangala Megacal

Product Description

Mangala Megacal (G) is a gluconate product produced by fermentation process and contains high levels of calcium, magnesium, boron with other nutrient elements and is available in granular as well as liquid forms.

Details Feature & Benefits Mangala Megacal is a gluconate product having high levels of bioavailable nutrients. It supplies much needed calcium, magnesium and boron in available (organic) form to plants. It improves healthy growth of plants. Calcium is required in large quantities by the crops that are succulent and those producing fruits and vegetables. Application of Mangala Megacal helps in improving quality, including shelf life, of produce. Application Mangala Megacal ensures better growth resulting in increased yield with improved quality. Mangala Megacal (Granules) has to be applied at the beginning of peak growth stage and reproductive stage. In case of fruits and vegetables, minimum 2 sprays of Mangala Megacal (Liquid) has to be given during filling and ripening of fruit and vegetable part. Packing

Mangala Megacal (Granules) : 10 and 25 kg for Mangala Megacal (Liquid) : 250, 500 and 1000 mL

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3.4 Engineering
UB Engineering-Fabricating Dreams & Building Reality
UB Engineering- the UB Group's Engineering Division - is one of the foremost Indian engineering companies in the field of installation of industrial plants. UB Engineering's activities are strongly focused on the Turnkey Division for projects in Power, Fertilizers, Oil & Gas, Fire Fighting, Effluent Treatment, Agrotech and other sectors like - concept to commissioning, on-site fabrication, installation, overhauling and maintenance. The range of its operations and concept to commissioning services combined with excellent track record in industrial construction worldwide has allowed UB Engineering to cut across geographical and political boundaries. Fully experienced in erecting plants running into millions of dollars in India and abroad, specialised multi-disciplinary teams adapt their skills to engineering and constructing smaller and medium size plants with speed and efficiency. UB Engineering Limited was recently awarded ISO 9001:2000 Certification for its operations covering Installation, Erection, Commissioning, Testing and Maintenance of Mechanical Projects. During the financial year 2004-05, the company recorded a turnover of Rs.150 Crore. The company achieved a turnover of Rs.162 Crore during the first 3 quarters of 200506 as against the previous year's annual turnover of Rs.150 Crore. The Company has already booked orders worth Rs.257 Crore upto January 2006 during the year 200506." One of the foremost Indian engineering companies in the field of installation of industrial plants. Strongly focused on the Turnkey Division for projects in Power, Fertilizers, Oil & Gas, Fire Fighting, Effluent Treatment, Agrotech and other sectors. Bagged a $21 million contract for installation of electro-mechanical and instrumentation works in Abu Dhabi. 1. UB Engineering Limited is the flagship Company of UB Groups Engineering Business. 2. UB Engineering Limited commenced its operations in 1963 as a partnership firm (then known as Western India Erectors) started by two foresighted technocrats and went public in the year 1972. 3. The Company came under the UB Umbrella in 1988. 4. The sphere of UB Engineerings activities encompasses EPC Projects, Infrastructure, On-site fabrication of structures, Installation, Testing and Commissioning of Electrical and Mechanical Equipments, Piping etc. for large 131

Industrial projects such as Power, Refineries, Steel, Cement, Fertilizer, Petrochemical and Desalination Projects. The Company enjoys prequalification credentials in Electrical Sub-station projects upto 400 KV in India. The Company also undertakes Overhauling and Maintenance of Operating Plants in varied Industries, both in India and Abroad.

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CHAPTER 4: COMPETITORS

i) COMPANY PROFILE 1) UNITED BREWERIES LIMITED

Name: United Breweries Limited Type: Conglomerate Founded: 1915 Founder: Thomas Leishman Headquarter: Bangalore Area Served: India Key Person: Dr. Vijay Mallya Industry: a) Brewery b) Alcoholic Beverage c) Engineering d) Pharmaceuticals e) Airlines Owner: Dr. Vijay Mallya United Breweries Limited: (BSE: 532478) United Spirits Limited: (BSE: 532432) Divisions: a) Kingfisher Airlines b) Mangalore Chemicals and Fertilizers c) United Breweries Global (Trading) Parent: United Breweries Group Products: Liquor, Airlines, Pharmaceuticals Total Assets: USD 2 billion Website: www.ubmail.com

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History
The UB Group (United Breweries) Group is a multi-faceted conglomerate with business interests in Beverage Alcohol, Pharmaceuticals, Media, International Trading, Aviation, Fertilizer, Research & Development, and Infrastructure Development. The United Breweries Group was founded by a Scottish gentleman Mr. Thomas Leishman in 1915. The company used to manufacture beer at that time and took its initial lessons in manufacturing beer from South Indian based British breweries. In August 1947, Mr. Vittal Mallya became the company's first Indian director. A year later he became the Chairman of the Group. United Breweries came into limelight by manufacturing bulk beer for the British troops, which was transported in huge barrels. In 1950s and 60s, the group expanded rapidly and made several acquisitions. McDowell was added as one of the Group subsidiaries. This helped UB Group to venture into wines and spirits business. Kingfisher, the Group's most visible and profitable brand, made its entry in the sixties. Thereafter, the Group moved into agrobased industries and medicines when it acquired Kissan Products and formed a longterm relationship with Hoechst AG of Germany to promote Aventis Pharma. After Mr. Vittal Mallya's death in 1983, his son Mr. Vijay Mallya assumed the mantle of the group.Mr. Vijay Mallya inducted professional management and consolidating the Group into individual operating divisions. In 1988, United Breweries Group acquired the global Berger Paints Group with operating companies across four continents. The paints business was divested for significant value in 1996. After India adopted economic liberalization in 1991, the United Breweries Group decided to retain interests in only those businesses that were globally competitive and did not depend upon fiscal tariff protection. Today, United Breweries Group is the second largest manufacturer of Spirits products in the world. In 2005, the Group entered aviation sector with the launch of Kingfisher Airlines Limited. Within a short time the airlines has captured an impressive market share and has established a niche identity for itself. The beginnings of what is today The UB Group are rooted in the flagship company, United Breweries Limited, (UBL) also referred to as the Beer Division of the UB Group. Led by Mr. Kalyan Ganguly, President & Managing Director, it has around 48% market share in the country. Millennium Alcobev Pvt Ltd., (MABL), is the Joint Venture Company in which UB along with its subsidiary and Scottish & Newcastle of the UK have equal stake of 50%. United Breweries Limited, the flagship company of the UB Group, has an association with the brewing dating back over five decades, starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market. Here, innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand 134

and exploiting it to the hilt on the other. A concerted emphasis on quality. UBL today boasts an impressive spread of own and contract manufacturing facilities throughout the Country. Quality and hygiene are the key elements of the United Breweries' manufacturing philosophy. To this end, the Central Scientific Laboratory (CSL), headquartered at Bangalore sets standards for all its breweries. Quality Management Systems laid out along the lines of ISO 9000 are strictly adhered to, controlling quality at every stage of production, from raw materials to the end product. Also, besides controlling the production process, the CSL analyses the Company's beer taken off market shelves all over the Country, the competition's beers and beers across the world. These beers are tested as per the standards laid down by the European Brewery Convention on 40 different parameters. By these standards, United Breweries' beers don't just equal, but even surpass, several Dutch and American beers. Its flagship brand 'Kingfisher', has achieved international recognition consistently, and has won many awards in International Beer Festivals. Kingfisher Premium Lager beer is currently available in 52 countries outside India and leads the way amongst Indian beers in the International market. It has been ranked amongst the top 10 fastest growing brands in the UK. In addition, UBL has also entered into mutli-faceted strategic alliance with Scottish & NewCastle Plc (S&N), an international brewery major, with $6 billion in revenue and a market capitalization of $5.4 billion. This alliance, apart from having a joint venture in India, will allow S&N to market it International brands like Kronenbourg in India, while UBL will utilize S&N's global network to further globalize its Kingfisher. UB Group acquires Whyte & Mackay for 595 m . Mumbai May 16 After months of being fodder for whisper columns, Scottish spirits maker Whyte & Mackay, popularly identified by its iconic double red lion symbol, is finally part of the United Breweries (UB) Group. United Spirits Ltd (USL), the flagship of the UB Group, has acquired 100 per cent equity in Whyte & Mackay for 595 million (about Rs 4,783 crore), with the deal being sealed on Wednesday morning in Glasgow, Scotland. The acquisition plugs a "missing link" in the UB product portfolio by giving the company the strong presence it needed in the scotch whiskey market, said UB Group Chairman, Mr Vijay Mallya, speaking to the Indian media from Glasgow. The acquisition pushes USL's consolidated sales up to 75 million cases per annum. USL closed 2006-07 at 66.4 million cases, he said. "Until today, the only missing link in our portfolio has been Scotch and due to the shortages and rapidly increasing prices of Scotch Whisky, we needed a reliable supply source to secure our future considering that we use scotch in our Indian blends. The potential for premium Scotch Whisky in India is enormous and, with the acquisition of Whyte & Mackay we now have a strong portfolio of internationally recognised brands that we will immediately introduce into the Indian market and use our strong distribution muscle fully to our advantage. In addition we now have access to international distribution and can look forward to exporting our brands from India," he said. 135

Whyte & Mackay recorded sales of 9 million case and case equivalents in the last 12 months. The leading Scotch whiskey distiller owns brands including The Dalmore, Isle of Jura, Glayva, Fettercairn, Viadivar vodka and Whyte & Mackay blended Scotch. The company has 140 brands, some dormant, but that can be revived, he said. USL will look to bring the W&M brands into India and China and there will be a revamp of the product portfolio depending on the requirements of these markets, he said. Global demand for Scotch whisky is showing strong growth and prices are increasing rapidly, Dr Mallya said. W&M's bulk scotch inventories of 115 million litres will allow USL the opportunity to meet their growing requirements for their brands in India. Explaining the corporate structure of the deal, Mr Mallya said that W&M is a 100 per cent subsidiary of USL, through an intermediary holding company established for the purpose. Acquisition finance for the transaction to United Spirits was provided by ICICI Bank and Citibank. The debt of 325 million was extended by ICICI to the intermediary holding company, while 310 million was extended by Citibank to USL, said the UB Group President (finance), Mr Ravi Nedungadi. In the day of consolidated statements, these financial details would be reflected in the company's accounts, he added. "I have repeatedly stated that we will not over pay in any acquisition and I am satisfied that the price agreed is attractive. Further, the combined profits of United Spirits and Whyte & Mackay are expected to be earnings accretive from the first completed year of operations after accounting for the cost of funds applied to the acquisition," Mr Mallya said. Mr Vivian Imerman, Chairman and Chief Executive Officer and majority shareholder in W&M, will remain in the group as a Strategic Advisor to Mr Mallya. The acquisition brings into USL's fold The Invergordon Distillery, near Inverness. W&M also owns four malt whisky distilleries in Scotland and a bottling facility in Grangemouth.

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Business Interests of UB Group: Beverage Alcohol:

The UB Group is 3rd largest spirits marketer in the world, with overall sales of 60 million cases. The company offers 140 brands at varying price points. Some of the famous brands of the UB Group are: Bagpiper Whisky, McDowell's No.1 Whisky, Director's Special Whisky, McDowell's No.1 Brandy and McDowell's Celebration Rum. Media: The UB Group also has a shareholding in Asian Age Holdings Ltd, the company that owns and manages daily newspaper, The Asian Age. International Trading: The Group's company UB Global Limited is a recognized export house engaged in the export of Beer, Spirits, Leather Footwear and Processed Foods. The Company also exports Pharmaceutical Products and customized perfumeries. Fertilizer: Mangalore Chemicals & Fertilizers Limited is under UB Group's management. It has a manufacturing capacity of 2,17, 800 MT of Ammonia and 3,80,000 MT of Urea. Research & Development: Vittal Mallya Scientific Research Foundation (VMSRF) was established in 1987 with the objective of developing newer and novel technologies that will have substantial application in industry and health care. The foundation is it is recognized by the Departments of Scientific & Industrial Research (DSIR), Dept. of Biotechnology (DBT), Council for Scientific and Industrial Research (CSIR) and the Ministry of Finance, Govt. of India. Aviation: UB Group entered aviation sector in 2005 with the launch of Kingfisher Airlines Limited. Kingfisher Airlines has captured an impressive market share and has established a niche identity for itself. The airlines recently acquired 25% stake in Deccan

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2) SABMILLER PLC
A) About Company
Name: SAB Miller plc Type: Public (LSE: SAB, JSE: SAB) Founded: 1895 Johannesburg, RSA Headquarters: London, England, UK Key people: J. Meyer Kahn (Chairman) Graham Mackay (CEO) Industry: Brewing Revenue: US$21,410 million (2008) Operating income: US$3,448 million (2008) Net income: US$2,288 million (2008) Employees: 69,116 (2008) Annual production: 239 million hectolitres Type: Active beers Name: Pilsner Urquell Pilsner Peroni Nastro Azzurro Lager Miller Genuine Draft Draft Castle Lager Lager Grolsch Website: http://www.sabmiller.com

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History
SABMiller plc (LSE: SAB) is one of the world's largest brewers; the company has brewing interests and distribution agreements on six continents. Six of the companys brands are in the worlds top fifty beer brands, and the group is one of the largest bottlers of Coca-Cola products in the world. The group reported annual revenue of $21,410m in 2008, up 15% from $18,620m in 2007. SABMiller has expanded rapidly from its South African origins, adding Miller to its name through acquisition of the Milwaukee, U.S.A. brewer in 2002, following SAB's pattern of acquiring local brands and brewing operations in Europe, Asia, and the Americas. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. The Company was founded in South Africa in 1895 as South African Breweries (SAB). The business operations were mainly limited to Southern Africa, where it had established a dominant position in the market, until 1990 when it began investing in Europe. SABMiller, beer producers above allSABMiller has quenched the thirst of millions of people the world over since its creation in 1895. Its biggest ambition remains the production and manufacturing of beer, like Castle lager, but it also makes fruit juice, sodas, wines and spirits, via its subsidiary Appletiser SA. Without forgetting the bottling of Coca-Cola and Schweppes products through its outlet ABI.This group originally from South Africa, which bought in May 2002 the Philip Morris brewery subsidiary (Miller brewing), is now established worldwide (Asia, Africa, Europe and America) and pursues its expansion through acquisitions as a proof the purchase of the italian company Peroni in 2003.On the other side, it has invested in the luxury hotel and attached casinos industry. It owns and manages, especially on the African continent, hotel chains such as Southern Sun and Southern Sun-Continental Africa, amongst others. SABs first investment in Europe was in 1990 through the purchase of an interest in Compaa Cervecera de Canarias SA in the Canary Islands. After listing on the London Stock Exchange in 1999 to raise capital for acquisitions, the group purchased the Miller Brewing Company in North America from the Altria Group in 2002, and changed its name to SABMiller. Altria Group retains a 28.7% ownership interest in SABMiller.

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3) CARLSBERG
BRANDS:
1) Haywards 5000 2) Indus Pride 3) Kozel 4) Lech 5) Miller High Life 6) Miller Lite 7) Grolsch 8) MGD6 9) FOSTERS

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History
Carlsberg A/S is one of the world's largest brewing companies. Its two principal brands, Carlsberg and Tuborg, are the leading beers in Denmark and are also two of the most widely sold beers in the global market. More than three-quarters of the brewery's sales come from outside Denmark. The company operates brewing facilities in Singapore, Malawi, Germany, Italy, Hong Kong, Cyprus, and a number of other countries and maintains licensing agreements for distribution of its brands in others, so that Carlsberg and Tuborg can be found in 150 different countries altogether. Carlsberg A/S has interests in a few businesses outside brewing as well. Most notably, the company owns Royal Scandinavia A/S, makers of renowned fine porcelain, silverware, and glassware. Carlsberg also owns a 43 percent interest in Tivoli Gardens, a well-known amusement park in Copenhagen. Carlsberg A/S was formed from the merger of two venerable Danish breweries, Carlsberg and Tuborg. The original Carlsberg brewery was founded in Copenhagen in 1847 by Captain J. C. Jacobsen. The captain was interested in brewing technology, and he studied modern brewing methods extensively before he opened his shop, which he named for his son Carl. His constant work to improve the quality of his beer soon made his lager very popular. Carl Jacobsen carried on his father's passion for beer making, and he studied brewing both in Denmark and abroad before taking his place in the family business in 1871. Carl eventually established his own brewery, called New Carlsberg. New Carlsberg and Old Carlsberg were united in 1906, as both father and son willed their breweries to a charitable foundation J. C. Jacobsen had established in 1876. The Carlsberg Foundation assumed the running of the breweries, carried on scientific research in beer making through its Carlsberg Laboratory, and supported Danish history and the arts through the establishment of several museums. Tuborg was founded in 1873 by a group of Danish businessmen headed by Phillip Heyman. The Tuborgs Fabrikker first included a glass factory and a sulfuric acid works, but Heyman spun off all but the brewery in 1880. Tuborg's Green Label pilsner quickly established a strong reputation in Denmark. By 1894 Tuborg was the major partner in an affiliation of 11 Copenhagen breweries. Carlsberg and Tuborg signed an operating agreement as early as 1903, stating that they would share profits and deficits and contribute equally to financing new plants and installations. The two brands dominated the Danish beer market. Though Danes were dedicated beer drinkers, the market was relatively small, as the total Danish population was only around five million people. Carlsberg and Tuborg eventually decided to expand their sales outside the country. After World War II, the two breweries began intensive marketing campaigns abroad. As a result, their exports tripled between 1958 and 1972, and the two companies established breweries in other European countries and in Asia. To reinforce their growing export presence, Carlsberg and Tuborg combined under one name in 1970, becoming United Breweries Ltd. Under the terms of the charter, the Carlsberg Foundation was awarded a mandatory ownership of at least 51 percent of the shares of the new company. 141

United Breweries continued to expand its business by penetrating foreign markets. One of its most important markets was Great Britain. In 1970 the company set up a partnership with the British beer maker Watney to build a lager brewery at Northampton. This was United's biggest operation outside Denmark. By 1975 the Carlsberg brand lager produced there accounted for about 14 percent of British lager sales. The Grand Metropolitan group took over Watney in 1972, and in 1975 it sold its 49 percent interest in Carlsberg U.K. back to United Breweries, leaving the Danish parent with 100 percent control. Grand Metropolitan continued to distribute Carlsberg lager through its 7,500 pub outlets. United Breweries took a different tack with its Tuborg brand, however. The largest British brewer, Bass Charington, distributed Tuborg, which was at first all imported directly from Denmark. Tuborg then was brewed under license at four Bass breweries, but that agreement ended in 1981. United took back independent control of Tuborg marketing in Britain, hoping to increase sales. The company also intensified its drive to market Tuborg internationally and in 1981 licensed a Hungarian brewery to produce the lager there. United Brewery's two main brands were available in almost every European capital by the middle 1980s. About 70 percent of United's beer was sold abroad, through direct exports, through licensed foreign breweries, or through breweries that the company owned. Despite its growing success in Europe, Asia, and Africa, United faced problems in its native Denmark. That country ranked eighth in the world in per capita beer consumption, and United had an 80 percent market share, but sales were stagnant. United worked under a fixed price system in Denmark, where it sold its products for the same price everywhere, regardless of volume. Some Danish supermarkets began to fight against what they considered United's monopolistic practices, by slashing beer prices to less than wholesale. United resorted to threatening to halt deliveries of Carlsberg and Tuborg to stores that discounted. Another problem with the Danish market was that younger drinkers were turning increasingly to wine. In an effort to win back its young customers, United entered into a distribution agreement with American brewer Anheuser-Busch to sell its Budweiser brand in Denmark. Younger people were interested in American imports and more apt to experiment with a new brand than older drinkers. Anheuser-Busch also began to import the Carlsberg brand to the United States for United. United Breweries diversified somewhat in the 1980s. It formed Carlsberg Biotechnology in 1983 and acquired interests in firms that made such things as ventilation plants and fishing industry equipment. The company acquired 83 percent of a German brewery in 1988, the Hannen Brauerei GmbH, and also bought Vingaarden A/S, a Danish wine and spirit maker. A separate financial branch, Carlsberg Finans A/S, was established in 1989 to manage the parent company's stock portfolios and pension funds. But by the end of the 1980s the company decided to sell off much of its nonbeverage business. United Brewery's name had been changed in December 1987 to Carlsberg A/S to give the firm a more distinct business profile. The renamed company consolidated its operations and gradually began to pare down its workforce to cope with what it perceived to be a mature beer market. Sales grew 142

steadily throughout the 1980s, from DKK 6.31 billion in 1982 to DKK 10.48 billion in 1990. Carlsberg A/S continued to make investments in international markets in the 1990s. The company acquired a controlling interest in Unicer, the largest brewery in Portugal, in April 1991. Carlsberg subsequently sold its stake in a Spanish brewery, Union Cervecera, which had been losing money. Guinness bought out Carlsberg's 60 percent share, and then Carlsberg acquired ten percent of Guinness's interest in a larger Spanish brewery, La Cruz del Campo S.A. Carlsberg also moved to secure its crucial British market by forming an alliance with Allied-Lyons, a large brewing and wholesale company. Britain provided almost half of Carlsberg's worldwide profit by the early 1990s, and competition among brewers there had become increasingly stiff. Previous to the 1991 merger with Allied-Lyons, Carlsberg had only a four percent share of the British beer market, with 1990 sales of DKK 1.31 billion. The new firm, a 50-50 joint venture called Carlsberg-Tetley P.L.C., had an 18 percent market share, just behind market leaders Bass, with 23 percent, and Courage, with 21 percent. The alliance gave Carlsberg access to Allied's six breweries, its strong distribution network, and a larger brand portfolio. Carlsberg had to wait almost a year for the British antitrust agency to approve the deal, but when Carlsberg-Tetley began operations in early 1993, it had a secure place among the top three British brewers. The situation in Britain, where three large companies including Carlsberg-Tetley controlled about two-thirds of the beer market, seemed a model to Carlsberg for what the global market was becoming. Global consumption of beer for 1991-92 was down, reflecting the European economic recession, and competition escalated among increasingly large international brewing companies. Carlsberg continued to strengthen its ties with foreign breweries, as it anticipated negative growth in beer consumption in the 1990s. Some of Carlsberg's slow growth in Europe was offset, however, by increased sales in Asia. Carlsberg had become the leading international beer brand in the Far East by the early 1990s, and Singapore, Malaysia, and Hong Kong were particularly good markets for the company. Carlsberg also had modest sales in South Korea, Japan, Indonesia, and Nepal. Carlsberg's subsidiary Danbrew worked on construction of a Carlsberg brewery in Thailand in the early 1990s, and by 1992 Carlsberg beer was introduced to China and Sri Lanka. In Denmark, Carlsberg undertook a major restructuring of its beer production facilities. In 1992 the company began to phase out its Tuborg brewery and transferred production to two other existing plants, in the interest of long-term operating economy. Carlsberg had been cutting its workforce since the mid-1980s, and this move further reduced the company's personnel. Carlsberg took another significant action concerning its home market in 1992, acquiring 80 percent of A/S Dadeko, the company in charge of the bottling and sale of Coca-Cola, Fanta, Sprite, and other soft drinks in Denmark. Throughout the early 1990s, Carlsberg's British joint venture, Carlsberg-Tetley, was faced with intense competition and declining market share and profits. In 1996 Allied Domecq PLC, Carlsberg's partner in Carlsberg-Tetley, decided to exit the business, selling its 50 percent interest to the company's strongest rival, Bass Brewers. 143

Carlsberg and Bass planned to merge the two companies, with Bass owning 80 percent and Carlsberg owning the remaining 20 percent. In 1997, however, Britain's Department of Trade and Industry blocked the merger on the grounds that it would operate against the public interest. Subsequently, the Department of Trade ordered Bass to divest itself of the Carlsberg-Tetley shares. Carlsberg bought the shares from Bass for approximately $183 million. In 1997 the company ended its partnership with St. Louis-based Anheuser-Busch, which for 12 years had been the sole U.S. distributor for Carlsberg products. Subsequently, Carlsberg handed over U.S. distribution rights to Labatt USA, a subsidiary of Labatt Breweries of Canada. Carlsberg also became more firmly entrenched in the soft drink market in 1997, when it entered into a joint venture with the Coca-Cola Company. The partnership, named Coca-Cola Nordic Beverages, was developed to bottle, sell, and distribute Coca-Cola soft drink products in Denmark and Sweden. To obtain European Union Commission approval for the joint venture, however, Carlsberg was ordered to sell off its interests in Bryggerigruppen A/S, the Danish bottler of PepsiCo soft drink brands, and A/S Dansk Coladrik, the maker of Jolly Cola. In 1998 Coca-Cola Nordic Beverages expanded its activities to include Norway and Finland. In 1998 Carlsberg acquired 50 percent of the shares of the Finnish brewing operation, Oy Sinebrychoff AB, of which it already owned ten percent. A Swedish subsidiary of Oy Sinebrychoff, Falcon Breweries, then assumed responsibility for brewing and marketing Tuborg beer in Sweden. The company's growth campaign continued in early 1999. In January, Carlsberg agreed to acquire full ownership of another of its joint ventures, Danish Malting Group, A/S. Under the agreement, Carlsberg purchased the 50 percent shareholdings owned by its partner in the operation, the U.S.-based ConAgra, Inc. Carlsberg added to its already-strong Asian presence in the spring of 1999 when it signed an agreement to invest in the Hite Brewery, Korea's largest brewery. The Hite Brewery had a market share of approximately 50 percent in Korea, which ranked in the top 20 beer markets in the world. Once the transaction was completed, Carlsberg would become the second largest holder of voting shares, owning 15 to 20 percent of issued share capital. Also in the spring of 1999, Carlsberg announced its plans to sell off its Vingaarden, the Danish wine and spirit producer it had purchased in 1988. Carlsberg achieved modest but steady growth in sales and profits through the 1990s, despite an intensely competitive international beer market. The company was poised to move into the new century with approximately 100 subsidiaries and associated companies and a presence in 150 markets. Due to declining beer consumption and increasing competition in many of the markets Carlsberg served, however, the company faced the possibility of lower profits in the years to come. Principal Subsidiaries: A/S Kjbenhavns Sommer-Tivoli (Denmark; 43%); Carlsberg Brewery Hong Kong Limited (51%); Carlsberg Brewery Malaysia Berhad (Malaysia; 27.6%); Carlsberg Brewery (Thailand) Co., Ltd. (8%); Carlsberg Finans A/S (Denmark); Carlsberg France S.A.; Carlsberg Importers S.A.-N.V. (Belgium; 10%); Carlsberg Italia S.P.A. (75%); Carlsberg Malawi Brewery Limited (Malawi; 49%); 144

Carlsberg-Tetley Brewing Ltd. (United Kingdom); Ceylon Brewery Ltd. (Sri Lanka; 8%); Coca-Cola Nordic Beverages A/S (Denmark; 51%); Danbrew Ltd. A/S (Denmark); Danish Malting Group A/S (50%); Falcon Holding AB (Sweden); Gorkha Brewery Limited (Nepal; 48.3%); Grupo Cruzcampo, S.A. (Spain; 11%); Hannen Brauerei GmbH (Germany); Hue Brewery Ltd. (Vietnam; 35%); Israel Beer Breweries Ltd. (20%); J.C. Bentzen A/S (Denmark); Nuuk Imeq A/S (Greenland; 23.68%); Okocimskie Zaklady Piwowarskie S.A. (Poland; 43.5%); Oy Sinebrychoff AB (Finland; 60%); Panonska Pivovara D.O.O. (Croatia; 40%); Royal Scandinavia A/S (Denmark; 60.96%); South-East Asia Brewery Ltd. (Vietnam; 35%); Tuborg Nord BCD: (Denmark); Trk Tuborg Bira Ve Malt Sanayii A.S. (Turkey; 2.2%); Unicer S.A.-Unio Cervejeira S.A. (Portugal; 31%); United Romanian Breweries Bereprod SRL; Vingaarden A/S (Denmark). Carlsbergs strategy is focused on value creation and expansion. We aim to create value by increasing our earnings and realising the value of hidden assets (including unused properties), and to expand by growing our business in existing markets and entering new markets. In order to achieve this strategy, we have introduced a range of targets and action plans to help shape the Carlsberg of tomorrow. The foundations of Carlsbergs core business are the beer markets of Western Europe, Eastern Europe (BBH) and Asia. These are markets that we have got to know particularly well through our presence and activities there over many years, which have meant that we have built up strong and profitable positions in these markets. Carlsbergs strategy is to focus on these three regions, because it is here that we have the expertise and strength needed to be a leading player. The markets in Carlsbergs business portfolio are at different stages of development. Some are mature with stagnating or declining consumption, while others are emerging and growing. These different stages of development often reflect standards of living, which means that factors such as income per capita and the size of the middle class will have a say in total beer consumption and its growth. The markets are also undergoing major changes. This requires constant adaptation to a market situation featuring keen competition on marketing, innovation, cost-efficiency, and brewery investments and acquisitions. Evaluating and comparing the individual markets stage of development, risk profile and potential profitability within the overall portfolio is key to the overall distribution of resources between the different regions. The challenge here is to strike the best possible balance between the mature markets of Western Europe, the growth markets of Eastern Europe (BBH), and the emerging markets of Asia. Following this, the groups next major acquisition was of a major interest in Bavaria S.A., South Americas second largest brewer and owner of the Aguila and Club Colombia brands in 2005. In the same year, SABMiller acquired a 29.6% stake in Harbin Brewery, Chinas oldest brewer, preparing the group to benefit from growth of the beer category in developing markets.

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SABMiller has grown from its original South African base into a global company with operations in both developed markets and in emerging economies such as Eastern Europe, China and India. The groups most established market to date, sales in South Africa contributed 27% to group EBITA in 2008. Drink division is also the countrys largest producer of products for the Coca-Cola Company. Brands include: Castle Lager, Grolsch, Castle Milk Stout, Hansa Marzen Gold, Hansa Pilsener, Carling Black Label, Castle Lite, Sterling Lite Lager, Redds, Brutal Fruit and Sarita. In China, the groups national brand in that country, Snow, is produced in partnership with China Resources Enterprise Limited, is the leading brand by volume in China. SABMiller is the second-largest brewer in India and has joint ventures in Vietnam and Australia. SABMiller acquired the Foster's brand for the Indian and Vietnamese markets. The region contributed 14% of the overall groups earnings before interest, tax and amortisation (EBITDA) in 2008. Brands include: 2M, Castle Lager, Castle Milk Stout, Eagle, Fosters, Kilimanjaro, Snow and Zorok. SABMillers entry into the European market began in 1995 with the acquisition of Dreher in Hungary. The groups European operations are mostly centred in the fast developing consumer markets in Central and Eastern Europe (Hungary, Romania, Poland, Czech Republic and Russia), although there are operations in Italy, France, UK and Germany where it imports its international brands. On 19 November 2007, the board of Royal Grolsch NV accepted a 816 million offer for the company by SABMiller. The takeover was completed with the delisting of Grolsch's shares on 20 March 2008. The region contributed 23% of the overall groups earnings before interest, tax and amortisation (EBITDA) in 2008. Brands include: Pilsner Urquell, Nastro Azzurro, Peroni, Tyskie, Ursus, Dreher, Grolsch and Lech. SABMiller first entered the Latin American Market with the acquisition of Cerveceria Hondurea in Honduras, making the company the first international brewer to enter Central America. Since then, the group has expanded its Latin American operations into six countries, including Colombia, El Salvador, Ecuador, Panama and Peru. The region contributed 25% of the overall groups earnings before interest, tax and amortisation (EBITDA) in 2008. Lager brands include: Aguila, Club Colombia, Costea, Poker (Colombia), Pilsen Callao, Pilsen Trujillo, Cusquea (Peru), Pilsener (Ecuador), Pilsener (El Salvador), Golden Light, Port Royal, Salva Vida, Imperial (Honduras), Atlas (Panama) and Balboa (Panama). The USA is the worlds most profitable beer market; On October 9, 2007, SABMiller and Molson Coors Brewing Company announced a joint venture to be known as MillerCoors. U.S. antitrust regulators approved the joint venture on June 5, 2008. The merger was completed on June 30, 2008 and MillerCoors began operation as a combined entity on July 1, 2008. The combined venture will be headquartered in Chicago, IL. 146

Pete Coors has been named as chairman of the new company, and Molson Coors Chief Executive Leo Kiely will be the new CEO of the joint venture. Tom Long, CEO of Miller, will be appointed president and chief commercial officer. The region contributed 11% of the overall groups earnings before interest, tax and amortization (EBITDA) in 2008. Brands include: Miller Lite, Miller Genuine Draft, Olde English 800, Milwaukees Best, and Miller Chill. SABMiller runs a number of sustainable development initiatives across its companies and in the countries it operates in. SABMiller along with other UK brewers, have introduced new lightweight bottles that use 30% less glass. The lightweight bottles are designed to not only reduce the amount of waste materials but also cut down on energy used in production and distribution reducing the company's carbon emissions. Along with their own sustainability reports 2008 Sustainable Development Report SABMiller submits to a number of third party annual reports that review the company's environmental record. The corporation provides links to such reports on their own website. SABMiller has a clear strategic focus, at the centre of which are the four priorities set out below and discussed in more detail within this section. Management uses a range of indicators to monitor progress against these four priorities. Some of the most important measures used are identified in the accompanying table and are expanded upon in the Chief Financial Officers review developing markets, and value growth as consumers around the world trade upwards from economy to mainstream and from mainstream to premium brands. Their aim is to develop an attractive brand portfolio that meets consumers needs in each of their markets. In many markets, because the growth is fastest at the top end, they have been focusing on their international premium brands, such as Peroni Nastro Azzurro and regional brands such as Kozel in Europe. Good operational performance has always been an SABMiller strength. While operational standards are already high we are continually pushing them higher as evidenced by growing EBITA and stable or rising margins. We are leveraging our global scale to grow the business. Our business platform enables us, for example, to distribute our international premium brands and build our regional brands. In addition we are using our scale to transfer skills, methods and our operational performance and efficiency. The principal risks facing the group, which have been considered by the board, are detailed below. The groups well developed risk management process is detailed in the Corporate Governance section and our financial risks are discussed in note 22 to the consolidated financial statements. The global brewing industry is expected to continue to consolidate. Should the group not participate in attractive value-adding transactions, this may inhibit its ability to leverage additional scale benefits. While participation in global consolidation provides opportunities to access scale benefits, enter growth markets and achieve benefits from the groups best operating practices, there is the risk that expected benefits may not be captured or may be inadequate, such that an appropriate return on 147

capital is not achieved over time. The group has continued to make significant progress during the period with regard to creating a balanced and attractive global spread of businesses, as set out in Strategic priority one. The continued development of our marketing and growth of our brand portfolios positions us well to benefit from changing consumer preferences in both developed and developing markets. However, markets continue to evolve and competitor activity is increasing and should the group fail to ensure the relevance and attractiveness of its brands, and the enhancement of brand marketing, there is the risk that significant growth opportunities may not be realised. The groups approach and progress this year in terms of developing strong, relevant brand portfolios in local markets is set out in Strategic priority two. The group now operates on six continents and it is essential to develop and retain a global management capability. Failure to maintain this capability at a high level or maintain our effective organisational leadership process which can capture shared learnings and leverage global synergies and expertise, could jeopardise our growth potential. The groups approach to leveraging its global scale is detailed in Strategic priority four. In many countries, regulatory constraints and restrictions on alcohol products, including sales and marketing activities, continue to be under the spotlight, and management interacts with the relevant authorities wherever appropriate. An increase in such impositions or in excise duties can have an adverse impact on our business in those countries where such actions may take place. Details of the groups activities regarding responsible alcohol consumption can be found in the Sustainable development review. The supply of some brewing raw materials and packaging materials has been constrained during the past two years, leading to supply shortages and cost increases. Should the group fail to ensure an adequate supply of brewing and packaging raw materials at competitive prices, there is the risk that margins could fall. Mitigating factors for the risk of supply constraints and rising cost of raw materials are covered in Strategic priority three

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4) COBRA
ABOUT COMPANY
Name: Cobra Beer Type: Beer company Founded: 1989 Founder(s): Karan Bilimoria Headquarters: Fulham, South London, (United Kingdom) Area served: United Kingdom India Industry: Brewing Products: Cobra 5% Premium Beer Cobra 0.0% Cobra Lower Cal King Cobra Cobra Bite Net income: Unknown Website: http://www.cobrabeer.com/

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HISTORY
Cobra Beer was founded in 1989 by Arjun Reddy and Karan Bilimoria, then aged 27 and 20,000 in debt. A Cambridge law graduate and qualified Chartered Accountant, Bilimoria launched Cobra Beer after spotting a gap in the market for a less gassy lager. The beer was originally planned to be named 'Panther', but this name was not popular when researched with customers prior to launch and was changed to 'Cobra' at the eleventh hour. By way of introduction by Arjun's uncle Keshow Reddy, the two founders were introduced to Mysore Breweries in India, who were the original brewers of Cobra beer. Cobra was first brewed in Bangalore (now Bengaluru) in 1990 and imported to the UK for seven years. In 1997 Cobra commenced brewing under licence with Charles Wells (now Wells & Young's) in the UK. Wells & Young's also brews international beer brands including Kirin from Japan and Red Stripe from Jamaica as well as being the UK distributor for Mexican beer Corona Extra. Currently, Cobra Beer is stocked in more than 6,000 restaurants and in all major supermarkets and off licence chains in the UK. Cobra Beer had also increased its presence in mainstream retail outlets and is available in more than 6,000 pubs and bars. It has been exported to more than 50 countries worldwide, and has a further office in Mumbai, India. In the annual report of accounts for the fiscal year ending 31 July 2006 the business made a loss after taxation of 3,929,834 on a turnover of 30.3m, having made a profit of 905,853 on the previous years turnover of 24.389m. Business losses accelerated in 2007 with total losses for the trading year to August 2007 reaching 13.6m on an annual turnover of around 45m. The business is approximately 26 million in debt and has borrowings from venture capitalists attracting interest at daily compound rate of 15%. In August 2007 Bilimoria handed control over to new chief executive officer (CEO) Adrian McKeon, the former UK managing director of Beam Global Spirits & Wine. Cobra has though continued to accelerate its sales growth in recent years. Most recently, Cobra's half year sales figures for the period from 1 August 2008 - 31 January 2009 showed growth in volume terms of 21%. And this was achieved against the backdrop of the UK beer market which declined by around 8% in the last quarter of 2008. In 2003, Cobra commenced brewing with Browar Belgia in Poland to distribute Cobra to the European and worldwide market. Previously part of Belgiums Palm Breweries, Browar Belgia is Polands fourth largest brewer. The brewery was acquired by SABMiller in 2007. Cobra subsequently took the decision to stop brewing in Poland for cost saving reasons and returned the majority of its brewing to contract breweries in the UK, signing deals in 2008 with Camerons in Hartlepool and Quinn Glass to handle its

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bottling. Cobra also continues to brew under licence with Wells & Young's in Bedford. Cobra Beer has also signed a number of licencing agreements with breweries in India including Mount Shivalik Group, the largest independent brewing company in India, to brew Cobra under licence for Indias rapidly growing domestic market. And in January 2008, Cobra Beer acquired its first brewery after putting a down payment on Icebery Breweries and assuming control of the plant in Bihar, north east India. In 2005, Cobra Beer created the CobraVision Short Film Competition. The aim was to give aspiring filmmakers the opportunity to get their work shown by screening their films during the commercial breaks of the movies on UK TV channels ITV2, ITV3 and ITV4. Filmmakers submitted 10 five-second films to be judged by industry figures, and the best were screened to a national television audience. In 2007, CobraVision introduced a new 50-second format, screening films uncut before movies on ITV4. All films entered are eligible for monthly and annual prizes. Each year, CobraVision holds an awards show in London for the annual CobraVision Awards. In 2006, the show was held at the Curzon Mayfair theatre and was hosted by June Sarpong and Iain Lee. In 2007 the CobraVision Awards were held at the British Film Institute on London's Southbank, with hosts June Sarpong and Martin Freeman. CobraVision ended in March 2008 at the same time as Cobra's sponsorship of ITV2, 3 and 4 movies. Cobra Beer continues to support the British Film Industry through its role as official beer partner to BAFTA and the BFI (British Film Institute).

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PRODUCTS Currently, Cobra presently produces five varieties of beer: 1) Cobra 5.0% Premium 2) Cobra Zero % 3) Cobra Light 4) King Cobra 5) Cobra Bite COBRA 5.0% PREMIUM A blend of barley malt and yeast with maize, hops and rice with 5% abv. It comes in three sizes; 660 ml and 330 ml bottles, as well as 500ml cans as well as on draught. COBRA LIGHT Cobra Light is double-filtered, with fewer calories and fewer carbohydrates than regular Cobra. A 330ml bottle of Cobra Lower Cal contains less than 100 calories, zero fat and 1.27g of carbohydrates around half the amount in most regular lagers. Cobra Lower Cal is 4.1% abv.

COBRA ZERO% Cobra Zero% is an alcohol-free beer, with 6.5 grams of carbohydrates and 79 calories per 330ml bottle. It is full-flavoured and well-rounded with a hint of sweetness. It is known as the Cobra for when you cant have a Cobra. KING COBRA The worlds first double fermented lager with 8% abv, King Cobra is presented in a Champagne-style bottle and available in 750 ml and 375 ml sizes. COBRA BITE Cobra Bite is a range of fruit-flavoured lagers launched in May 2007. A Fresh Ginger variant was introduced in August 2008 and the range now includes Sweet Lime, Blood Orange, Fresh Ginger and Lemongrass flavours. Cobra Bite products are available in 250 ml bottles at 4.1% .

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5) SEAGRAMS
Name: Seagram Company Ltd. Type: Alcoholic drinks Founded: 1857 Headquarters: Montreal, Quebec Area served: United Kingdom,India,USA,Australia Industry: Brewing Net income: Unknown

HISTORY
The Seagram Company Ltd. was a large corporation headquartered in Montreal, Quebec, Canada that was the largest distiller of alcoholic beverages in the world. Towards the end of its independent existence it also controlled various entertainment and other business ventures. The Seagram assets have since been acquired by other companies, notably PepsiCo, Diageo, and Pernod Ricard. The Seagram Building, the company's American headquarters office tower at 375 Park Avenue in New York City, was designed by architect Ludwig Mies van der Rohe with Philip Johnson. The former Seagram headquarters in Montreal now belongs to McGill University, under the name Martlet House. In 1857, a distillery was founded in Waterloo, Ontario. Joseph E. Seagram became a partner in 1869 and sole owner in 1883, and the company became known as Joseph E. Seagram & Sons. Many decades later, Samuel Bronfman founded Distillers Corporation Limited, in Montreal, which enjoyed substantial growth in the 1920s, in part due to Prohibition in the United States. In 1928, a few years after the death of Joseph E. Seagram (1919), the Distillers Corporation acquired Joseph E. Seagram & Sons, and took over the Seagram name. The company was well prepared for the end of Prohibition in 1933 with an ample stock of aged whiskeys ready to sell to the newly opened American market, and it prospered accordingly. Thus despite its earlier Waterloo history, the Seagram name is most closely associated with the Bronfman family. However, it is not correct to say, as is often done, that Samuel Bronfman founded Seagram, since the Seagram name itself pre-dated the company he founded. It has been alleged that Seagrams had dealings with American bootleggers during Prohibition. Original Seagram Distillery buildings in Waterloo, now converted to residential condominiums. After the death of Samuel Bronfman in 1971, Edgar M. Bronfman was Chairman and Chief Executive Officer (CEO) until June 1994 when his son, Edgar Bronfman, Jr., was appointed CEO. In 1981, cash rich and wanting to diversify, Seagram Company Ltd. engineered a takeover of Conoco Inc., a major American oil and gas producing company. Although Seagram acquired a 32.2% stake in Conoco, DuPont was brought in as a white knight by the oil company and entered the bidding war. In the end, Seagram lost out in the 153

Conoco bidding war. But in exchange for its stake in Conoco Inc, it became a 24.3% owner of DuPont. By 1995 Seagram was DuPont's largest single shareholder with four seats on the board of directors. In 1986, the company started a memorable TV commercial campaign advertising its Golden Wine Cooler products. With rising star Bruce Willis as pitchman, Seagram rose from fifth place among distillers to first in just two years. In 1987, Seagrams engineered a $1.2 billion takeover of important French cognac maker Martell & Cie. On April 6, 1995, after being approached by Edgar Bronfman, Jr., DuPont announced a deal whereby the company would buy back its shares from the Seagram company for the amount of $9 billion. Seagram's was heavily criticized by the investment communitythe 24.3% stake in DuPont accounted for 70% of Seagram's earnings. Standard & Poor took the unusual step of stating that the sale of the DuPont interest could result in a downgrade of Seagram's more than $4.2 billion of long-term debt. The rationale for this divestiture was that Edgar Bronfman, Jr., grandson of Samuel Bronfman, wanted Seagram to branch out into the entertainment business. Bronfman, Jr., used the proceeds of the sale to help acquire Universal Studios, MCA, PolyGram, and Deutsche Grammophon. Seagram also gained control of a number of Universal theme parks. In 1997, the Seagram Museum, formerly the original Seagram distillery in Waterloo, was forced to close due to lack of funds. The building is now the home of the Centre for International Governance Innovation. The two original barrel houses are now the Seagrams Lofts condominiums. There are also almost 5 acres (20,000 m2) of land that will be the home of the future Balsillie School of International Affairs. In 2000, controlling interest in Seagram's entertainment division was acquired by the Vivendi Group, and the beverage division by Pernod Ricard. By the time Vivendi auctioned off Seagram's drink business, beyond its original high-profile brand names the once renowned operation consisted of around two hundred and fifty drinks brands and brand extensions. In 2001, The Coca-Cola Company acquired the line of Seagram's mixers (ginger ale, tonic water, club soda and seltzer water) from Pernod Ricard and Diageo, as well as signing a long term agreement to use the Seagram's name from Pernod Ricard. Seagram's Ginger Ale was named the winner at the 2009 World Cup of Ginger Ale in Chicago. On April 19, 2006, Pernod Ricard announced that they would be closing the Seagram Lawrenceburg Distillery located in Lawrenceburg, Indiana. Noted brand names owned by Seagram included Crown Royal, and VO whiskeys, Captain Morgan rum, Passport Scotch and Tropicana fruit juice, today owned by Diageo PLC and Pepsico, Inc., respectively. The Seagram brand name lives on in Pernod products such as Chivas Regal "Seagram's Gin" the Diageo product Seagram's Seven Crown and in The Coca-Cola Company's Seagram's mixers line. The Seagram's Seven Crown line of whiskey has been popularized in American culture through the Seven and Seven drink cocktail. Some types of their wine coolers also include Bahama Mama, Jamaican Me Happy, Strawbery Splash, and Tropical Twist. 154

6) RADICO KHAITAN
Company Profile: Radico Khaitan Limited Ticker: 532497 Exchanges: BOM 2009 Sales: 6,414,700,000 Major Industry: Food & Beverages Sub Industry: Brewers Country: INDIA Employees: 850 Date of Establishment 1983 Revenue 231.976 ( USD in Millions ) Market Cap 17106.5822808 ( Rs. in Millions ) Corporate Address Bareilly Road,,Rampur-244901, Uttar Pradesh www.radicokhaitan.com Management Details Chairperson - Lalit Khaitan MD - Abhishek Khaitan Directors - Abhishek Khaitan, Amit Burman, Arun Mohan Bansal, Ashutosh Patra, K P Singh, Kama Singh Mehta, Lalit Khaitan, Mahendra Kumar Doogar, Raghupati Singhania, Sanjay Jalan Business Operation Breweries & Distilleries Background Radico Khaitan (RKL), established in 1943 as Rampur Distillery, is one of the India's oldest and largest liquor manufacturers. The company owns three millionaire brands namely 8 PM Whisky, Contessa Rum and Old Admiral Brandy. Its 8 PM Whisky brand sold one million cases in first year alone creating a record or any In Financials Total Income - Rs. 7384.109 Million ( year ending Mar 2009) Net Profit - Rs. 65.363 Million (year ending Mar 2009) Company Secretary Arun Mohan Bansal Radico Khaitan Limited. The Group's principal activity is to manufacture and market liquor. It's product group includes rectified spirit, country liquor and 1MFL. The Group's brands include 8PM royale, old admiral, 8 PM bermuda brown rum, 8 PM bermuda white rum, 8PM excellency brandy, morpheus brandy, magic moments grain vodka, contessa vodka, magic moments gin, contessa etra dry gin. The Group's plants are located at Uttar Pradesh, Rajasthan, Uttaranchal, Haryana and Andhra Pradesh. Radico Khaitan Limited (RKL) is an India-based company. The Company is engaged in the business of manufacturing and trading of liquor. The liquor business incorporates the product groups, such as rectified spirit, country liquor and Indianmade foreign liquor (IMFL). The Companys brands include 8 PM Whisky, Old Admiral Brandy, Royale Whytehall, Magic Moments Vodka and Morpheus. Its market segment includes whisky, rum, brandy, vodka and gin. The Company has 14

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bottling lines with a capacity to produce 1500 cases of liquor in a single shift of operation. Radico Khaitan (RKL), established in 1943 as Rampur Distillery, is one of the India's oldest and largest liquor manufacturers. The company owns three millionaire brands namely 8 PM Whisky, Contessa Rum and Old Admiral Brandy. Its 8 PM Whisky brand sold one million cases in first year alone creating a record or any Indian or foreign brand operating in India. Due this it became first brand in the liquor industry to make it to the Limca Book of Records. Radico Khaitan has been successful in creating brands in various segments of whisky, rum, brandy, vodka and gin. In 1997 the company got merged with Abhishek Cement and was renamed as Radico Khaitan. Its Rampur distillery located at Uttar Pradesh is one the largest distilleries in India and a leading manufacturer of Extra Neutral Alcohol, Rectified Spirit and Anhydrous Alcohol. Recently grain distillery was added to the existing distillery increasing it production capacity from 60 million litres p. a to 90 million litres p.a. Companys manufacturing plants are located at Uttar Pradesh, Rajasthan, Andhra Pradesh, Uttaranchal and Haryana. The company entered into 50:50 joint venture with Diageo Radico Distilleries to market Masterstroke Whisky. The company has presence in 30 countries and offers a unique 5cl Sachet pack for greater market penetration. The company owns largest distilleries in Asia and produces Extra Neutral Alcohol from molasses and grains. It is the largest exporter of Extra Neutral Alcohol from India. Whisky- It launched 8 PM whisky in 1999, which later became one of the biggest brands. Later it launched various brands like Whytehall, Rampur No.1, Radico Supreme Gold, Special Appointment and Old Admiral. Rum- Under this it has launched 8 PM Bermuda, Contessa and Old Admiral. Brandy- It markets brandy under the name Old Admiral and 8 PM Excellency Brandy. Vodka- It markets vodka under brand name Contessa and Magic Moments (remix and grain). It has made bollywood star Hrithik Roshan their brand ambassador for this segment. It also manufactures Gin and markets under the brand Magic Moment and Contessa. RKL has set up a second grain-based distillery in Aurangabad, Maharashtra with an investment of Rs136 crore Radico Khaitan Limited is the proud owner of three millionaire brands of liquor namely: 8 PM Whisky Launched in 1999, it created a record among any Indian or foreign brand operating in the country by selling one million cases in the 1st year itself. Contessa Rum - It won the prestigious Monde Selection award for its overall quality for the past three consecutive years. Old Admiral Brandy - Rated by Drinks International as the fastest growing Brandy in the world in the regional category (2004-05 and 2005-06), it also won the Monde Selection award for its overall quality in 2004-05. 156

Besides, Radico Khaitan has brands that attract consumers of every market segment both in terms of purchasing power and preference. The Rampur Distillery has 14 state-of-the-art bottling lines, with a few imported from Italy. It is also equipped with tunnel bottle washing, filling, sealing and labeling machines having capacity of producing 1500 cases (1 case = 12 bottles of 750 ml each) of liquor in a single shift of operation. Line capacities vary from 750 cases to 3,000 cases in a shift. To keep pace with the growing demand, Radico Khaitan has significantly increased its bottling capacity by both acquiring and setting up bottling plants in the states of Rajasthan, Uttranchal and Andhra Pradesh. For the year ended 31st March, 2006, Radico Khaitan Ltd. produced the following results: Turnover INR 49.451 billion Net Profit INR 4.5 billion (all the above figures have been approximated) Radico has also witnessed a 17 % increase in sales, 26 % increase in profits (after taxation) and a similar hike in earnings per share (EPS) before charging prior period deferred marketing expenses. Spirits and wine major Radico Khaitan, a company owned by the Delhi-based Lalit Khaitan Group, is looking to ramp up its wine sales by introducing the Carlo Rossi brand in the Indian market. Carlo Rossi is the worlds largest-selling wine brand and is produced by the California-headquartered E&J Gallo. Radico Khaitan, the manufacturers of the 8PM whisky brand, has had a nine-year joint venture with E&J Gallo, the owners of the second-largest winery in the world. Carlo Rossi will initially be launched in the Mumbai market in April this year. Radico, which already has a significant presence in north and south India, is targeting wine sales of 1,00,000 bottles a year with the introduction of Carlo Rossi. The company already sells 60,000 bottles of other E&J brands among which are Wine Cellars, Sonoma County and Turning Leaf. Raju Vaziraney, COO, Radico Khaitan told ET: We want to bring in varietal wine brands of E&J, which are qualitatively superior to the regular brands. Varietal wines refers to wines that are produced principally from one grape variety. Since they are produced from a single crop, they are expensive as well. Among the Carlo Rossi brands to be sold in India are Chardonnay, Cabernet and Chirac. These wines will be priced at about Rs 1,000 for a 750 ml bottle. Globally, Carlo Rossi, which sells over 14 million cases a year is ahead of its competitors like Seagrams Jacobs Creek and Constellations Robert Mondavi wines. Each sell ten million cases. When asked on the rationale to import such brands at a time when the wine industry in India is going through a tough phase, Mr Vaziraney said the market for imported wines by and large are not affected by the recession seen in the domestic wine market. As reported earlier, many Nashik-based winemakers have decided to exit the business. The Indian market for imported wines today is at about 400,000 cases. Out of this, about half comes from foreign wines that are bottled in India. Radico Khaitan was 157

among the first to bring to India global wine brands produced and bottled outside the country. This was after the removal of the quantitative restriction on the import of wines and spirits in 2001.

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ii) LOCATIONS

GAUHATI
Gauhati, city in northeastern India, in Assam state. Gauhati is located on the Brahmaputra River in western Assam, near the state's southern border with Meghalaya state. It is an industrial town, important river port, and Assam's principal commercial center, trading jute, cotton, rice, and tea. Industries include vegetable-oil refining; soap and plywood manufacturing; cotton spinning and weaving; and flour milling. Gauhati was the capital of the Hindu kingdom of Kamarupa in the early 5th century ad, and it has long been a center of Hindu pilgrimage with several temples nearby, including the Kamakshya and Umananda temples. Situated in the heart of the city is the 10th-century Janardhan Temple, a Hindu temple with an image of the Buddha. The city is the seat of Gauhati University (founded in 1948). In the 19th century Gauhati was briefly under the control of Burma (now known as Myanmar); from 1826 until 1874 it was the British capital of Assam. Population (2001) 814,575.

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KOLKATA
Kolkata is the capital of the Indian state of West Bengal and is the second largest city by area in India, after Mumbai. It is located in eastern India on the east bank of the River Hooghly. When as the capital of India during the British Raj until 1911. Once the centre of modern education, industry, science, culture and politics in India, Kolkata has witnessed intense political violence, clashes and economic stagnation since 1954. Since the year 2000, economic rejuvenation has spurred on the city's growth. Like other metropolitan cities in India, Kolkata continues to struggle with the problems of urbanisation: poverty, pollution and traffic congestionreferred to as Calcutta, it usually includes the suburbs, and thus its population exceeds 15 million, making it India's third-largest city and urban agglomeration. This also makes it the world's 8th largest metropolitan area as defined by the United Nations. The name Kolkata and the anglicised name Calcutta have their roots in Kalikata, the name of one of the three villages (Kalikata, Sutanuti, Govindapur) in the area before the arrival of the British. "Kalikata", in turn, is believed to be a version of Kalikshetra ("Land of [the goddess] Kl"). Alternatively, the name may have been derived from the Bengali term kilkila ("flat area").Again, the name may have its origin in the indigenous term for a natural canal, Khal, followed by Katta (which may mean dug). While the city's name was always pronounced "Kolkata" in the local Bengali language, its official English name was changed from "Calcutta" to "Kolkata" in 2001, reflecting the Bengali pronunciation. Some view this as a move to erase the legacy of British rule. This change has not always been reflected by overseas media. While news sources like the BBC have opted to call Bombay Mumbai, Kolkata remains Calcutta. Many Indians also refer to the city by its British name. The discovery of the nearby Chandraketugarh, an archaeological site, provides evidence that the area has been inhabited for over two millennia. The city's documented history, however, begins with the arrival of the English East India Company in 1690, when the Company was consolidating its trade business in Bengal. Job Charnock, an administrator with the Company was traditionally credited as the founder of this city. However some academics have recently challenged the view that Charnock was the founder of the city. At that time Kolkata, under direct rule of the Nawab of Bengal Siraj-Ud-Daulah, comprised three villages Kalikata, Govindapur and Sutanuti. The first recorded inhabitants of Sutanuti are said to be Basaks and Seths. The Seths were cloth merchants originally from Saptagram. Major parts of Govindapur belonged to the merchants Seths and Basaks. The British in the late 17th century wanted to build a fort near Govindapur in order to consolidate their power over other foreign powers namely the Dutch, the Portuguese, and the French. The Seths and Basaks sold their land and moved a few miles down to Sutanuti. From then on Sutanuti more specifically Burrabazar has been home to the Seths. Even after 300 years, the oldest residents of Calcutta have their houses in banstala Burrabazar. The Setts still reside in 160

Sir Hariram Goenka Street (previously Banstala Street). A temple of the seths named Radha Krishna Jee dating back to 1726 bears testimony to this fact. The Idol which used to be in their temple in Govindapur, had to be shifted to the current location because of the construction of the Fort William. In 1702, the British completed the construction of old Fort William, which was used to station its troops and as a regional base. Calcutta was declared a Presidency City, and later became the headquarters of the Bengal Presidency. Faced with frequent skirmishes with French forces, in 1756 the British began to upgrade their fortifications. When protests against the militarisation by the Nawab of Bengal SirajUd-Daulah went unheeded he attacked and captured Fort William, leading to the infamous Black Hole incident. A force of Company sepoys and British troops led by Robert Clive recaptured the city the following year. Calcutta was named the capital of British India in 1772, although the capital shifted to the hilly town of Shimla during the summer months every year, starting from the year 1864. It was during this period that the marshes surrounding the city were drained and the government area was laid out along the banks of the Hooghly River. Richard Wellesley, the Governor General between 17971805, was largely responsible for the growth of the city and its public architecture which led to the description of Calcutta as "The City of Palaces". The city was a centre of the British East India Company's opium trade during the 18th and 19th century locally produced opium was sold at auction in Kolkata, to be shipped to China. By the early 19th century, Kolkata was split into two distinct areasone British (known as the White Town), the other Indian (known as Black Town). The city underwent rapid industrial growth from the 1850s, especially in the textile and jute sectors; this caused a massive investment in infrastructure projects like railroads and telegraph by British government. The coalescence of British and Indian culture resulted in the emergence of a new Babu class of urbane Indians whose members were often bureaucrats, professionals, read newspapers, were Anglophiles, and usually belonged to upper-caste Hindu communities. Throughout the nineteenth century, a socio-cultural reform, often referred to as the Bengal Renaissance resulted in the general uplifting of the people. In 1883, Surendranath Banerjee organised a national conference the first of its kind in nineteenth century India. Gradually Calcutta became a centre of the Indian independence movement, especially revolutionary organisations. The 1905 Partition of Bengal on communal grounds resulted in widespread public agitation and the boycott of British goods (Swadeshi movement). These activities, along with the administratively disadvantageous location of Calcutta in the eastern fringes of India, prompted the British to move the capital to New Delhi in 1911. The city and its port were bombed several times by the Japanese during World War II, the first occasion being 20 December 1942, and the last being 24 December 1944. During the War, millions starved to death during the Bengal famine of 1943, caused by a combination of military, administrative and natural factors. In 1946, demands for the creation of a Muslim state led to large-scale communal violence resulting in the deaths of over 4,000 people. The partition of India also created intense violence 161

and a shift in demographics large numbers of Muslims left for East Pakistan, while hundreds of thousands of Hindus fled into the city. Over the 1960s and 1970s, severe power shortages, strikes and a violent MarxistMaoist movement the Naxalites damaged much of the city's infrastructure, leading to an economic stagnation. In 1971, war between India and Pakistan led to the mass influx of thousands of refugees into Kolkata resulting in a massive strain on its infrastructure. In the mid-1980s, Bombay, now Mumbai, overtook Kolkata as India's most populous city. Kolkata has been a strong base of Indian communism as West Bengal has been ruled by the CPI(M) dominated Left Front for 32 years now the world's longest-running democratically elected Communist government. The city's economic recovery gathered momentum after economic reforms in India introduced by the central government in the mid-1990s. Since 2000, Information Technology (IT) services have revitalized the citys stagnant economy. The city is also experiencing a growth in the manufacturing sector. Kolkata is located in eastern India at 2233N 8820E / 22.55N 88.333E / 22.55; 88.333 in the Ganges Delta at an elevation ranging between 1.5 m (5 ft) to 9 m (30 ft). It is spread linearly along the banks of the River Hooghly in a north-south direction. Much of the city was originally a vast wetland, reclaimed over the decades to accommodate the city's burgeoning population. The remaining wetland, known as East Calcutta Wetlands has been designated a "wetland of international importance" under the Ramsar Convention. Like the most of the Indo-Gangetic plains, the predominant soil type is alluvial. Quaternary sediments consisting of clay, silt, various grades of sand and gravel underlie the city. These sediments are sandwiched between two clay beds, the lower one at depths between 250 m (820 ft) and 650 m (2,133 ft) and the upper one ranging between 10 m (33 ft) and 40 m (131 ft) in thickness. According to the Bureau of Indian Standards, the town falls under seismic zone-III, in a scale of I to V (in order of increasing proneness to earthquakes) while the wind and cyclone zoning is "very high damage risk", according to UNDP report. Kolkata city, under the jurisdiction of the Kolkata Municipal Corporation (KMC), has an area of 185 km2 (71 sq mi). The Kolkata urban agglomeration, however, has continuously expanded and as of 2006, the urban agglomeration (Kolkata Metropolitan Area) is spread over 1,750 km2 (676 sq mi), and comprises 157 postal areas. The urban agglomeration is formally administered by several local governments including 38 local municipalities. The urban agglomeration comprises 72 cities and 527 towns and villages. The suburban areas of Kolkata metropolitan district incorporates parts of the districts North 24 Parganas, South 24 Parganas, Howrah, Hooghly and Nadia. The east-to-west dimension of the proper city is narrow, stretching from the Hooghly River in the west to roughly the Eastern Metropolitan Bypass in the east, a span of barely 5 km (3.1 mi)6 km (3.7 mi). The north-south expansion is roughly divided into North, Central and South Kolkata. North Kolkata locality is the oldest part of the city, with 19th century architecture and narrow alleyways. South Kolkata grew mostly after independence and consists of well-to-do & posh localities like Ballygunge,Bhowanipore,Alipore,New Alipore & Jodhpur Park localities. The Salt 162

Lake City (Bidhannagar) area to the northeast of the city is a planned section of Kolkata. Rajarhat, also called New Town, is a planned township being developed on the north-eastern fringes of the city. Also,the areas on E M Bypass,where the new developments are taking place, are the newly upcoming upscale-localities of the city. Central Kolkata houses the central business district around the B. B. D. Bagh area. The government secretariat, General Post Office, High Court, Lalbazar Police HQs and several other government and private offices are located here. The Maidan is a large open field in the heart of the city where several sporting events and public meetings are held. Several companies have set up their offices around the area south of Park Street which has become a secondary central business district. SHILIGURI Shiliguri, city in northern India, in northern West Bengal state. Shiliguri is located in the Tari region of the southern Himalayas, west of the Mahnanda River. The city has sawmills and plywood factories, which are supplied by the Tari forests. Trade and transportation are the most important activities in Shiliguri. The city acts as a strategic link between the northeast and the rest of India. It is also a transportation hub connecting the plains to the south with the mountains to the north. A particularly important route runs from Jalpaiguri in the south to the northern hill city of Drjiling (Darjeeling). There are several major railways and national highways serving Shiliguri. The Toy Train, which is primarily a tourist train, is pulled by ancient steam engines; it runs from Shiliguri to Djiling up a steep mountain track with famous views. The city has access to a domestic airport in nearby Bghdogra. Shiliguri was officially recognized as a city in 1931. It received an influx of refugees when Pakistan broke off from India in 1947 and again when neighboring Bangladeshthen a province of Pakistanbecame independent in 1971. Population (1991) 216,950.

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BHUBANESHWAR
Bhubaneshwar, city in eastern India and capital of Orissa state. Bhubaneshwar lies on the main highway linking Kolkata (formerly Calcutta) and Chennai (formerly Madras) and comprises an ancient city and a planned town built after 1948, when Bhubaneshwar was chosen to replace Cuttack as the administrative center of Orissa. Bhubaneshwar is an important center of tourism and pilgrimage; hundreds of Hindu temples built between the 7th and 16th centuries are located in the old city. These include the Lingaraj Temple, one of the finest in Orissa. Modern Bhubaneshwar is the seat of the Orissa University of Agriculture and Technology (founded in 1962) and Utkal University (1943). It also has the state museum. Jain and Buddhist temples near the town indicate the area has been settled since before 200 bc. In the 5th century Bhubaneshwar became a Hindu provincial capital; it served as the capital of the Kalinga Empire from the 7th to 11th centuries. Population (2001) 657,477.

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4.3 - TURNOVER
Turnover is sometimes a synonym for revenue or in certain contexts, sales, especially in European and South African usage. Services sold by a company during a particular period of time. Turnover is sometimes the name for a measure of how quickly inventory is sold. A high turnover means that goods are sold quickly, while a low turnover means that goods are sold more slowly. Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company. India's liquor market is very prosperous these days. While still relatively small, at $1 billion in annual sales, it is expanding 10% a year, thanks to the middle class's growing thirst for alcohol. This is quite a switch for a nation whose constitution encourages a tee totaling lifestyle. Indian Liquor Industry with estimated market value of INR 340 bn is growing at 1215% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters. United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitan who entered the IMFL space some 8 years back has already cornered 12 % market share and gaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc. The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo has tied up with Radico for entering Indian markets in brown spirits) Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth and more people entering the drinking club with newly obtained prosperity or from up trading from the existing brand. Since liberalization, the economy has been growing at steady pace with per capita income rising from INR 23,222 in 2005 to INR 6,012 in 1991. Shift from country liquor to IMFL is expected with rising per capita income and limiting the sale of country liquor by states due to hygiene factor. Industry has one of the lowest per capita consumption of both Liquor and Beer and also since the margins are amongst the lowest. Though the growth of the industrial sector started to slowdown in the first half of 2007-08, the overall growth during the year remained as high as 8.5 per cent. The industrial sector witnessed a sharp slowdown during 2008-09 as a consequence of successive shocks, the most important being the knock-on effects of the global financial crisis.

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The pace of slowdown accelerated in the second half of 2008-09 with the sudden worsening of the international financial situation and the global economic outlook. The year 2008-09 thus closed with the industrial growth at only 2.4 per cent as per the Index of Industrial Production (IIP). The slowdown in manufacturing over successive quarters started from Q1 of 2007-08. This was more or less replicated by the mining sector and closely followed by electricity. However, in the third quarter of 2008-09, the manufacturing sector witnessed a sharp drop in growth which turned negative in the fourth quarter. Growth of the mining sector declined over successive quarters of 2008-09 to reach a zero rate in the fourth quarter. In view of the fact that industrial growth started to moderate from the first quarter of 2007-08, its growth performance needs to be viewed in light of the developments during that year and during the preceding year. The price of crude had started to impact petro-based industrial inputs adding to fuel costs. That apart, the rise in the price of other commodities, particularly metals and ores from the latter half of 200607 to the second half of 2008-09 also had its effect on the cost side of the manufacturing sector. Though some units engaged in the extraction or exports of commodities (like iron ore) realized higher profit margins, the commodity price inflation had an adverse impact on the profit margins for the manufacturing sector in general. However, the Rs. 60.0 Billion organized beer and liquor industry has been growing at an impressive rate. In sharp contrast to the trend the world over, beer is losing ground to hard liquor in India. Amidst beers, the current trend is that lager beer is giving way to strong beer. Even as the liquor manufacturers could hope to garner the people who are shifting from beer to liquor, there is a vast country liquor market and a sizable grey market to contend with. United Breweries (UB), Shaw Wallace and McDowell (part of the UB Group) presently dominate the liquor and beer market. The market on its part is set to undergo a sea change with the arrival of MNCs. The removal of quantitative restrictions (QRs) on the import of bottled alcoholic beverages only makes the competition tougher. The MNCs looked forward to good business after the removal of QRs but the Government nullified it by slapping new taxes. The foreign bottle, therefore, remains as costly as ever. To survive in the highly competitive environment, the MNCs as well as the domestic majors are coming up with various strategies. Acquisitions and alliances appear to be the order of the day. Several such deals are already underway while more are in the offing. The domestic majors are also reorganizing their operations so that they can forge a deal with an MNC if the need arises. For instance, UB, which recently took up a major revamp, has said it is willing to offer a 25.0 percent stake to multinational liquor major. Another trend that seem to be catching up is the consumption of Coolers by the discerning connoisseurs. Coolers is typically a cold drink (or cocktail), which is often a mixture of white wine and fruit juice. As of now there is no definitive data available on the consumption front for coolers either globally or locally. But the 166

fact that this finds mention in most of the wine and recipe related sites helps us to arrive at the conclusion that the trend of consuming coolers in its various combinations is indeed catching up. What plagues the industry most is a very complicated set of laws and taxes. Each state has a different excise duty structure, import and export levies and other regulations regarding licensing fees and sales of new brands. This puts tremendous pressure on the industry players. They cannot transport their products from a market that has excess capacity to one where there is a short supply. The taxes on alcoholic beverages are some of the highest in the world. In some states it works out to as high as 200%. The brewers argue that subjecting beer to the same level of taxing, as hard liquor is uncalled for, since the alcohol content in beer is very low. They are lobbying to have beer delinked from Imfl so that the taxes will fall, prices will plunge and consumption rise. Amidst all the competition and tough laws, the industry sees vast potential in the market. Consumption is set to rise with higher disposable incomes and standard of living. While the beer market is expected to expand rapidly, hard liquor is not seen losing much market share, either. The National Conference on "The Indian Wine Sector - Potential & Challenges" was inaugurated by Shri Subodh Kant Sahai, Union Minister of Food Processing Industries. The conference which was held in the Banquet Hall of The Ashok Hotel in Delhi was attended by senior Government officials, members of the Indian Grape Processing Board as well as wine producers, grape growers and delegates who had travelled to Delhi from states such as Maharashtra, Karnataka and Himachal Pradesh. The Conference was a good indicator of how the industry is viewed in official circles and that its problems and challenges are being taken seriously. The immense potential of the Indian Wine Industry was also acknowledged despite the setbacks of the last two years. From the current 1.5 million cases of Indian wine sold, the sale of Indian wine had the potential to reach 10 million cases, it was stated, progressing to 50 million cases and then 100 cases and so on. Considering production levels in other countries, the target should be 400 million cases. Going by the Indian Grape Processing Board brochure, the ultimate goal is for the Indian wine industry to become a global player and world leader by 2020 in accordance with international standards!

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4.4 - MANUFACTURING UNITS

1. MC DOWELLS PARTY MAKERS Location - 4 Wallace House, Gpo, Bankshall Street, Kolkata - 700001 2,BACARDI MARTINI INDIA LTD. Location - Sech Bhawan, Kolkata-700091 3.UNITED BREWERIES LTD Location - Calcutta Gpo, Kolkata-700001 4. SHAW WALLACE & CO LTD Location - Kolkata-700001 5. TILAKNAGAR INDUSTRIES LTD Location - Kolkata-400056 6. RADICO KHAITAN LTD Location - Kolkata-700064 7. BEAN GLOBAL SPIRITS & WINE Location - Kolkata-700017 8. JAGATJIT IND LTD. Location - Kolkata-700017 9. MOOKHERJEE S WINE STORES Location - KOLKATA-700087 10. UDV INDIA LTD Location - Ballygunge, Kolkata-700019 11. Tilaknagar Industries Ltd. Location- Guwahati

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1. THE SEAGRAM
Seagram India (P) Ltd is the first alcobev MNC to jump into the exciting Indian wine market by bringing in Pernod Ricard's wine producing heritage & experience to India. Seagram's Nine Hill's is produced 100% in India by using state of the art technology & processes from Europe. The crushing machine used is the Balloon type to crush the grapes gently. Seagram purchases it's grapes from contract farmers in & around Dindori and Satana regions of the Nashik district in Maharasthra. These farmers work very closely with the company viticulturists and as per protocols set by them. Currently, the Indian winery industry is growing around 25% to 30%. Seagram India (P) Ltd is planning for aggressive growth, with an increase in capacity of around 60% to 70% every year for the next few years, says Rukn Luthra, Asst. Vice President Wine & Modern Trade, Seagram India. Seagram India (P) Ltd has launched Seagram's Nine Hills wine. The launch was held on November 30 in 2006 in Mumbai followed by rollouts in other parts of Maharashtra, Goa, Karnataka and West Bengal. Now it's in the process of being launched in Delhi, Haryana, Chandigarh, Rajasthan and Punjab. Noted brand names owned by Seagram included Crown Royal, and VO whiskeys, Captain Morgan rum, Passport Scotch and Tropicana fruit juice, today owned by Diageo PLC and Pepsico, Inc., respectively. The Seagram brand name lives on in Pernod products such as Chivas Regal "Seagram's Gin" the Diageo product Seagram's Seven Crown and in The Coca-Cola Company's Seagram's mixers line. The Seagram's Seven Crown line of whiskey has been popularized in American culture through the Seven and Seven drink cocktail. Some types of their wine coolers also include Bahama Mama, Jamaican Me Happy, Strawbery Splash, and Tropical Twist. The Seagram Company Ltd. was a large corporation headquartered in Montreal, Quebec, Canada that was the largest distiller of alcoholic beverages in the world. Toward the end of its independent existence it also controlled various entertainment and other business ventures. The Seagram assets have since been acquired by other companies, notably PepsiCo, Diageo, and Pernod Ricard. The Seagram Building, the company's American headquarters office tower at 375 Park Avenue in New York City, was designed by architect Ludwig Mies van der Rohe with Philip Johnson. The former Seagram headquarters in Montreal now belongs to McGill University, under the name Martlet House.

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2. RADICO KHAITAN LIMITED

Radico Khaitan Limited. The Group's principal activity is to manufacture and market liquor. It's product group includes rectified spirit, country liquor and 1MFL. The Group's brands include 8PM royale, old admiral, 8 PM bermuda brown rum, 8 PM bermuda white rum, 8PM excellency brandy, morpheus brandy, magic moments grain vodka, contessa vodka, magic moments gin, contessa etra dry gin. The Group's plants are located at Uttar Pradesh, Rajasthan, Uttaranchal, Haryana and Andhra Pradesh. Radico Khaitan Limited (RKL) is an India-based company. The Company is engaged in the business of manufacturing and trading of liquor. The liquor business incorporates the product groups, such as rectified spirit, country liquor and Indianmade foreign liquor (IMFL). The Companys brands include 8 PM Whisky, Old Admiral Brandy, Royale Whytehall, Magic Moments Vodka and Morpheus. Its market segment includes whisky, rum, brandy, vodka and gin. The Company has 14 bottling lines with a capacity to produce 1500 cases of liquor in a single shift of operation.

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3. UNITED BREWERIES LIMITED

The beginnings of what is today The UB Group are rooted in the flagship company, United Breweries Limited, (UBL) also referred to as the Beer Division of the UB Group. Led by Mr. Kalyan Ganguly, President & Managing Director, it has around 48% market share in the country. Millennium Alcobev Pvt Ltd., (MABL), is the Joint Venture Company in which UB along with its subsidiary and Scottish & Newcastle of the UK have equal stake of 50%. United Breweries Limited, the flagship company of the UB Group, has an association with the brewing dating back over five decades, starting with 5 breweries in South India in 1915. From bullock cart-loaded barrels or 'hogheads' of frothing ale, the Beer business has gone on to become the undisputed 'king' in the Indian beer market. Here, innovative, creative and aggressive marketing is complemented by a strong distribution network. A management focused on building brand equity on one hand and exploiting it to the hilt on the other. A concerted emphasis on quality. UBL today boasts an impressive spread of own and contract manufacturing facilities throughout the Country.

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4. SABMILLER PLC
SABMiller plc (LSE: SAB) is one of the world's largest brewers; the company has brewing interests and distribution agreements on six continents. Six of the companys brands are in the worlds top fifty beer brands, and the group is one of the largest bottlers of Coca-Cola products in the world. The group reported annual revenue of $21,410m in 2008, up 15% from $18,620m in 2007. SABMiller has expanded rapidly from its South African origins, adding Miller to its name through acquisition of the Milwaukee, U.S.A. brewer in 2002, following SAB's pattern of acquiring local brands and brewing operations in Europe, Asia, and the Americas. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. The Company was founded in South Africa in 1895 as South African Breweries (SAB). The business operations were mainly limited to Southern Africa, where it had established a dominant position in the market, until 1990 when it began investing in Europe. SABMiller, beer producers above allSABMiller has quenched the thirst of millions of people the world over since its creation in 1895. Its biggest ambition remains the production and manufacturing of beer, like Castle lager, but it also makes fruit juice, sodas, wines and spirits, via its subsidiary Appletiser SA. Without forgetting the bottling of Coca-Cola and Schweppes products through its outlet ABI.This group originally from South Africa, which bought in May 2002 the Philip Morris brewery subsidiary (Miller brewing), is now established worldwide (Asia, Africa, Europe and America) and pursues its expansion through acquisitions as a proof the purchase of the italian company Peroni in 2003.On the other side, it has invested in the luxury hotel and attached casinos industry. It owns and manages, especially on the African continent, hotel chains such as Southern Sun and Southern Sun-Continental Africa, amongst others. SABs first investment in Europe was in 1990 through the purchase of an interest in Compaa Cervecera de Canarias SA in the Canary Islands. After listing on the London Stock Exchange in 1999 to raise capital for acquisitions, the group purchased the Miller Brewing Company in North America from the Altria Group in 2002, and changed its name to SABMiller. Altria Group retains a 28.7% ownership interest in SABMiller.

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5. CARLSBERG
Carlsberg is one of the world's largest brewing companies. Its two principal brands, Carlsberg and Tuborg, are the leading beers in Denmark and are also two of the most widely sold beers in the global market. More than three-quarters of the brewery's sales come from outside Denmark. The company operates brewing facilities in Singapore, Malawi, Germany, Italy, Hong Kong, Cyprus, and a number of other countries and maintains licensing agreements for distribution of its brands in others, so that Carlsberg and Tuborg can be found in 150 different countries altogether. Carlsberg A/S has interests in a few businesses outside brewing as well. Most notably, the company owns Royal Scandinavia A/S, makers of renowned fine porcelain, silverware, and glassware. Carlsberg also owns a 43 percent interest in Tivoli Gardens, a well-known amusement park in Copenhagen. Throughout the early 1990s, Carlsberg's British joint venture, Carlsberg-Tetley, was faced with intense competition and declining market share and profits. In 1996 Allied Domecq PLC, Carlsberg's partner in Carlsberg-Tetley, decided to exit the business, selling its 50 percent interest to the company's strongest rival, Bass Brewers. Carlsberg and Bass planned to merge the two companies, with Bass owning 80 percent and Carlsberg owning the remaining 20 percent. In 1997, however, Britain's Department of Trade and Industry blocked the merger on the grounds that it would operate against the public interest. Subsequently, the Department of Trade ordered Bass to divest itself of the Carlsberg-Tetley shares. Carlsberg bought the shares from Bass for approximately $183 million. In 1997 the company ended its partnership with St. Louis-based Anheuser-Busch, which for 12 years had been the sole U.S. distributor for Carlsberg products. Subsequently, Carlsberg handed over U.S. distribution rights to Labatt USA, a subsidiary of Labatt Breweries of Canada. Carlsberg also became more firmly entrenched in the soft drink market in 1997, when it entered into a joint venture with the Coca-Cola Company. The partnership, named Coca-Cola Nordic Beverages, was developed to bottle, sell, and distribute Coca-Cola soft drink products in Denmark and Sweden. To obtain European Union Commission approval for the joint venture, however, Carlsberg was ordered to sell off its interests in Bryggerigruppen A/S, the Danish bottler of PepsiCo soft drink brands, and A/S Dansk Coladrik, the maker of Jolly Cola. In 1998 Coca-Cola Nordic Beverages expanded its activities to include Norway and Finland. In 1998 Carlsberg acquired 50 percent of the shares of the Finnish brewing operation, Oy Sinebrychoff AB, of which it already owned ten percent. A Swedish subsidiary of Oy Sinebrychoff, Falcon Breweries, then assumed responsibility for brewing and marketing Tuborg beer in Sweden. The company's growth campaign continued in early 1999. In January, Carlsberg agreed to acquire full ownership of another of its joint ventures, Danish Malting Group, A/S. Under the agreement, Carlsberg

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purchased the 50 percent shareholdings owned by its partner in the operation, the U.S.-based ConAgra, Inc. Carlsberg added to its already-strong Asian presence in the spring of 1999 when it signed an agreement to invest in the Hite Brewery, Korea's largest brewery. The Hite Brewery had a market share of approximately 50 percent in Korea, which ranked in the top 20 beer markets in the world. Once the transaction was completed, Carlsberg would become the second largest holder of voting shares, owning 15 to 20 percent of issued share capital. Also in the spring of 1999, Carlsberg announced its plans to sell off its Vingaarden A/S, the Danish wine and spirit producer it had purchased in 1988. In 1990s, despite an intensely competitive international beer market. The company was poised to move into the new century with approximately 100 subsidiaries and associated companies and a presence in 150 markets. Due to declining beer consumption and increasing competition in many of the markets Carlsberg served, however, the company faced the possibility of lower profits in the years to come. Principal Subsidiaries: 1. A/S Kjbenhavns Sommer-Tivoli (Denmark; 43%) 2. Carlsberg Brewery Hong Kong Limited (51%) 3. Carlsberg Brewery Malaysia Berhad (Malaysia 27.6%) 4. Carlsberg Brewery (Thailand) Co., Ltd. (8%) 5. Carlsberg Finans A/S (Denmark) 6. Carlsberg France S.A. 7. Carlsberg Importers S.A.-N.V. (Belgium; 10%) 8. Carlsberg Italia S.P.A. (75%) 9. Carlsberg Malawi Brewery Limited (Malawi; 49%) 10. Carlsberg-Tetley Brewing Ltd. (United Kingdom) 11. Ceylon Brewery Ltd. (Sri Lanka; 8%) 12. Coca-Cola Nordic Beverages A/S (Denmark; 51%) 13. Danbrew Ltd. A/S (Denmark) 14. Danish Malting Group A/S (50%) 15. Falcon Holding AB (Sweden) 16. Gorkha Brewery Limited (Nepal; 48.3%) 17. Grupo Cruzcampo, S.A. (Spain; 11%) 18. Hannen Brauerei GmbH (Germany) 19. Hue Brewery Ltd. (Vietnam; 35%); 20. Israel Beer Breweries Ltd. (20%) 21. J.C. Bentzen A/S (Denmark) 22. Nuuk Imeq A/S (Greenland; 23.68%) 23. Okocimskie Zaklady Piwowarskie S.A. (Poland; 43.5%) 24. Oy Sinebrychoff AB (Finland; 60%) 25.Panonska Pivovara D.O.O. (Croatia; 40%) 26. Royal Scandinavia A/S (Denmark; 60.96%); 27. South-East Asia Brewery Ltd. (Vietnam; 35%) 28. Tuborg Nord BCD: (Denmark) 174

29. Trk Tuborg Bira Ve Malt Sanayii A.S. (Turkey; 2.2%); 30. Unicer S.A.-Unio Cervejeira S.A. (Portugal; 31%) 31. United Romanian Breweries Bereprod SRL 32. Vingaarden A/S (Denmark).

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CHAPTER 5: BRAND AWARENESS AMONG PUBLIC

5.1 BRAND KNOWLEDGE

Ethyl alcohol, more frequently known as grain alcohol, works as an antiseptic by coagulating protein, the primary material that makes up cells. Although alcohol cannot coagulate every single cell, it functions well to inhibit the growth and reproduction of many microorganisms, including bacteria, fungi, protozoa, and viruses. Intriguingly, 70% alcohol is a more effective antiseptic than 100% alcohol. Because alcohol causes protein to coagulate on contact, a 100% solution coming into contact with a microorganism creates a hardened protein wall around the outside of the organism, rather than permeating into its interior. Because microorganisms can be very resilient, this protein shell only causes dormancy rather than death. This can lead to revival and a continuation the cycle of reproduction under the right circumstances. At a purity of 70%, however, the alcohol causes coagulation to occur more gradually, slowing down the microorganism from the inside out. Human skin cells are more resistant to alcoholic coagulation than most microorganisms. This is why your skin doesn't coagulate if it comes into contact with alcohol. Alcohol is also a good solvent that dissolves and carries away non-organic impurities that are responsible for things like odor. Its antiseptic action does cause a burning sensation on open flesh, as anyone who has ever used alcohol to clean a wound can testify. Alcohol is an ideal antiseptic because it achieves its goal subtly through coagulation, rather than through some active means like active poisoning or dissolving. Throwing acid on an open wound would only be successful at removing the contaminating microorganisms at the expense of a decent chunk of flesh. Ethyl alcohol should never be confused with methyl alcohol, also known as methanol or wood alcohol. When should we consider the alcohol useful? Which doses are considered being medicinal? It is obvious that drinking is evil and the end of December is a period of the year when everyone understands the fact that you can not avoid drinking alcohol.

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CHAMPAIGN
The most festive drink. It has the capacity to take off the irritability, to restore the appetite and to enhance the gustatory sensations. It is also useful in cases of edemas and cardiac insufficiency, when we need to enhance the elimination of liquids out of the organism. Contra arguments its harmful for people with gastritis. Facts: French scientist confirmed the efficiency of the old Cold healing method: put in Champaign two pieces of sugar, boil the solution and drink it before sleep. Tannins and sugar give impulse to develop the antibodies, magnesium helps to recovery and liquidate muscles tiredness; selenium helps to stop the development of the infection, sulphur and amino acids decrease the temperature.

WINE
Red wines are useful for heart, has antioxidant properties, decelerate the aging processes, favor the recovery of vital force and raise the tone and the cheerfulness. The wine is recommended in case of gastrointestinal disturbances. White wine is good for thirst. Portwines and Vermouths help in case of lack of appetite, favoring a better release of gastric juice. white wines are not indicated in case of urolithiasis, which may lead to inflammatory process nephritis, cystitis. It can not be drink while suffering from prostatitis . In wine-making regions during the epidemics the amount of infected people, regularly consuming wine is much lower. The wine suppresses the tuberculosis, malaria bacteria, etc. The same effect is present if we dissolve the wine with water.

COGNAC
Cognac widens the veins and removes the headache 30 ml of this drink mixed with sugar will help in case of hypertension and stenocardia. One spoon of cognac will soothe the nerves and remove the stress. cognac must not be consumed in cases of diabetes and cholelithiasis. As older is the drink, as efficient are its properties. On American market during the dry law cognac was sold in drug stores as a medication.

VODKA
Pepper Vodka is efficient in cases of Cold and cough. In little doses it helps cure the headache in large doses it becomes the reason of headache. A moderate dose influences the digestion. If we consume daily 25-30 grams of vodka it will decrease the level of our cholesterol. vodka may accomplish a faster alcohol dependency. Researches prove that strong drinks, based on refined alcohol which is more pure from chemical point of view lead to alcoholism, and during the healing process is much more difficult to heal the dependence of vodka than of cognac, for example. We should not think that vodka is the safest drink, because unlike cognac or whiskey, its more pure. The most probable causes of demise of an alcoholic are heart attacks, strokes, nervous system disorders. Alcohol have curing effects only on non-drinking or few drinking 177

people. They have no effects on alcoholics. Alcohol blunts the speed of reaction. Healthy alcohol consumption daily healthy consumption alcohol per day Research has found a correlation between light consumption of alcohol, one to two alcoholic beverages per day, and reduced risk of heart disease as well as other health benefits, including reduction in all-cause mortality. However, some recent studies found that moderate consumption of alcohol did not decrease heart disease and that the positive effects may be due to methodological flaws in research studies. The subject is still controversial

USEFUL FACTS ABOUT ALCOHOL

A lot of people like a drink and the weekend wouldnt be the same without letting your hair down, would it? However, it is important to know what you can do to help prevent the morning after the night before and some of the longer-lasting problems that can occur. Relatively harmless dosages of alcohol per day: 1. vodka, cognac 30-60 ml, 2. desert fortified wines 150-200 ml 3. Champaign, simple wine 200-300 ml 4. beer 450-720 ml Moderate drinking is defined as two drinks a day if youre a male 65 and younger, or one drink a day if youre a female or a male 66 and older. A drink is defined as 12 ounces (355 milliliters) of beer, 5 ounces (148 milliliters) of wine or 1.5 ounces (44 milliliters) of 80-proof distilled spirits.

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5.2 BRAND IMAGE

Regularly consuming alcohol is correlated with an increased risk of developing alcoholism, cardiovascular disease, malabsorption, chronic pancreatitis, alcoholic liver disease, and cancer. Damage to the central nervous system and peripheral nervous system can occur from sustained alcohol consumption. Difficulty walking, blurred vision, slurred speech, slowed reaction times, impaired memory Clearly, alcohol affects the brain. Some of these impairments are detectable after only one or two drinks and quickly resolve when drinking stops. On the other hand, a person who drinks heavily over a long period of time may have brain deficits that persist well after he or she achieves sobriety. Exactly how alcohol affects the brain and the likelihood of reversing the impact of heavy drinking on the brain remain hot topics in alcohol research today. We do know that heavy drinking may have extensive and far reaching effects on the brain, ranging from simple slips in memory to permanent and debilitating conditions that require lifetime custodial care. And even moderate drinking leads to short term impairment, as shown by extensive research on the impact of drinking on driving. A number of factors influence how and to what extent alcohol affects the brain, including how much and how often a person drinks the age at which he or she first began drinking, and how long he or she has been drinking the persons age, level of education, gender, genetic background, and family history of alcoholism whether he or she is at risk as a result of prenatal alcohol exposure and his or her general health status. This Alcohol Alert reviews some common disorders associated with alcoholrelated brain damage and the people at greatest risk for impairment. It looks at traditional as well as emerging therapies for the treatment and prevention of alcoholrelated disorders and includes a brief look at the hightech tools that are helping scientists to better understand the effects of alcohol on the brain. Alcohol can produce detectable impairments in memory after only a few drinks and, as the amount of alcohol increases, so does the degree of impairment. Large quantities of alcohol, especially when consumed quickly and on an empty stomach, can produce a blackout, or an interval of time for which the intoxicated person cannot recall key details of events, or even entire events. Blackouts are much more common among social drinkers than previously assumed and should be viewed as a potential consequence of acute intoxication regardless of age or whether the drinker is clinically dependent on alcohol. There was an survey on 772 college undergraduates about their experiences with blackouts and asked, Have you ever awoken after a night of drinking not able to remember things that you did or places that you went? Of the students who had ever consumed alcohol, 51 percent reported blacking out at some point in their lives, and 40 percent reported experiencing a blackout in the year before the survey. Of those who reported drinking in the 2 weeks before the survey, 9.4 percent said they blacked out during that time. The students reported learning later that they had participated in a wide range of 179

potentially dangerous events they could not remember, including vandalism, unprotected sex and driving. At particular risk for experiencing a blackout, as an alarming number of college students engage in binge drinking. Binge drinking, for a typical adult, is defined as consuming five or more drinks in about 2 hours for men, or four or more drinks for women. Equal numbers of men and women reported experiencing blackouts, despite the fact that the men drank significantly more often and more heavily than the women. This outcome suggests that regardless of the amount of alcohol consumption, females a group infrequently studied in the literature on blackouts are at greater risk than males for experiencing blackouts. A womans tendency to black out more easily probably results from differences in how men and women metabolize alcohol. Females also may be more susceptible than males to milder forms of alcoholinduced memory impairments, even when men and women consume comparable amounts of alcohol. Women are more vulnerable than men to many of the medical consequences of alcohol use. For example, alcoholic women develop cirrhosis, alcohol induced damage of the heart muscle or, cardiomyopathy, and nerve damage or peripheral neuropathy after fewer years of heavy drinking than do alcoholic men. Studies comparing men and womens sensitivity to alcohol induced brain damage, however, have not been as conclusive. Using imaging with computerized tomography, two studies compared brain shrinkage, a common indicator of brain damage, in alcoholic men and women and reported that male and female alcoholics both showed significantly greater brain shrinkage than control subjects. Studies also showed that both men and women have similar learning and memory problems as a result of heavy drinking. The difference is that alcoholic women reported that they had been drinking excessively for only about half as long as the alcoholic men in these studies. This indicates that womens brains, like their other organs, are more vulnerable to alcohol induced damage than mens. Yet other studies have not shown such definitive findings. In fact, two reports appearing side by side in the American Journal of Psychiatry contradicted each other on the question of gender related vulnerability to brain shrinkage in alcoholism. Clearly, more research is needed on this topic, especially because alcoholic women have received less research attention than alcoholic men despite good evidence that women may be particularly vulnerable to alcohols effects on many key organ systems. People who have been drinking large amounts of alcohol for long periods of time run the risk of developing serious and persistent changes in the brain. Damage may be a result of the direct effects of alcohol on the brain or may result indirectly, from a poor general health status or from severe liver disease. Thiamine deficiency is a common occurrence in people with alcoholism and results from poor overall nutrition. Thiamine, also known as vitamin B1, is an essential nutrient required by all tissues, including the brain. Thiamine is found in foods such as meat and poultry whole grain cereals nuts and dried beans, peas, and soybeans. Many foods in the United States commonly are fortified with thiamine, including breads and cereals. As a result, most 180

people consume sufficient amounts of thiamine in their diets. The typical intake for most Americans is 2 mg/day which is the Recommended Daily Allowance is 1.2 mg/day for men and 1.1 mg/day for women. Up to 80 percent of alcoholics, however, have a deficiency in thiamine, and some of these people will go on to develop serious brain disorders such as Wernicke Korsakoff syndrome (WKS). WKS is a disease that consists of two separate syndromes, a shortlived and severe condition called Wernickes encephalopathy and a longlasting and debilitating condition known as Korsakoffs psychosis. The symptoms of Wernickes encephalopathy include mental confusion, paralysis of the nerves that move the eyes or oculomotor disturbances, and difficulty with muscle coordination. For example, patients with Wernickes encephalopathy may be too confused to find their way out of a room or may not even be able to walk. Many Wernickes encephalopathy patients, however, do not exhibit all three of these signs and symptoms, and clinicians working with alcoholics must be aware that this disorder may be present even if the patient shows only one or two of them. In fact, studies performed after death indicate that many cases of thiamine deficiency related encephalopathy may not be diagnosed in life because not all the classic signs and symptoms were present or recognized. Schematic drawing of the human brain, showing regions vulnerable to alcoholism-related abnormalities. Approximately 80 to 90 percent of alcoholics with Wernickes encephalopathy also develop Korsakoffs psychosis, a chronic and debilitating syndrome characterized by persistent learning and memory problems. Patients with Korsakoffs psychosis are forgetful and quickly frustrated and have difficulty with walking and coordination. Although these patients have problems remembering old information or retrograde amnesia, it is their difficulty in laying down new information or anterograde amnesia that is the most striking. For example, these patients can discuss in detail an event in their lives, but an hour later might not remember ever having the conversation. The cerebellum, an area of the brain responsible for coordinating movement and perhaps even some forms of learning, appears to be particularly sensitive to the effects of thiamine deficiency and is the region most frequently damaged in association with chronic alcohol consumption. Administering thiamine helps to improve brain function, especially in patients in the early stages of WKS. When damage to the brain is more severe, the course of care shifts from treatment to providing support to the patient and his or her family. Custodial care may be necessary for the 25 percent of patients who have permanent brain damage and significant loss of cognitive skills.

Scientists believe that a genetic variation could be one explanation for why only some alcoholics with thiamine deficiency go on to develop severe conditions such as WKS, but additional studies are necessary to clarify how genetic variants might cause some people to be more vulnerable to WKS than others. Most people realize that heavy, long term drinking can damage the liver, the organ chiefly responsible for breaking down alcohol into harmless byproducts and clearing 181

it from the body. But people may not be aware that prolonged liver dysfunction, such as liver cirrhosis resulting from excessive alcohol consumption, can harm the brain, leading to a serious and potentially fatal brain disorder known as hepatic encephalopathy. Hepatic encephalopathy can cause changes in sleep patterns, mood, and personality; psychiatric conditions such as anxiety and depression; severe cognitive effects such as shortened attention span; and problems with coordination such as a flapping or shaking of the hands called asterixis. In the most serious cases, patients may slip into a coma which can be fatal. New imaging techniques have enabled researchers to study specific brain regions in patients with alcoholic liver disease, giving them a better understanding of how hepatic encephalopathy develops. These studies have confirmed that at least two toxic substances, ammonia and manganese, have a role in the development of hepatic encephalopathy. Alcoholdamaged liver cells allow excess amounts of these harmful byproducts to enter the brain, thus harming brain cells. Physicians typically use the following strategies to prevent or treat the development of hepatic encephalopathy. Liver transplantation, an approach that is widely used in alcoholic cirrhotic patients with severe chronic liver failure. In general, implantation of a new liver results in significant improvements in cognitive function in these patients and lowers their levels of ammonia and manganese. Drinking during pregnancy can lead to a range of physical, learning, and behavioral effects in the developing brain, the most serious of which is a collection of symptoms known as fetal alcohol syndrome (FAS). Children with FAS may have distinct facial features (see illustration). FAS infants also are markedly smaller than average. Their brains may have less volume (i.e., microencephaly). And they may have fewer numbers of brain cells (i.e., neurons) or fewer neurons that are able to function correctly, leading to longterm problems in learning and behavior. Scientists are investigating the use of complex motor training and medications to prevent or reverse the alcoholrelated brain damage found in people prenatally exposed to alcohol . In a study using rats, Klintsova and colleagues used an obstacle course to teach complex motor skills, and this skills training led to a reorganization in the adult rats brains , cerebellum, enabling them to overcome the effects of the prenatal alcohol exposure. These findings have important therapeutic implications, suggesting that complex rehabilitative motor training can improve motor performance of children, or even adults, with FAS. Scientists also are looking at the possibility of developing medications that can help alleviate or prevent brain damage, such as that associated with FAS. Studies using animals have yielded encouraging results for treatments using antioxidant therapy and vitamin E. Other preventive therapies showing promise in animal studies include 1 octanol, which ironically is an alcohol itself. Treatment with loctanol significantly reduced the severity of alcohols effects on developing mouse embryos. Two molecules associated with normal development have been found to protect nerve cells against a variety of toxins in much the same way that octanol does. And a compound (MK801) that blocks a key brain chemical associated with alcohol withdrawal (i.e., 182

glutamate) also is being studied. MK801 reversed a specific learning impairment that resulted from early postnatal alcohol exposure . Though these compounds were effective in animals, the positive results cited here may or may not translate to humans. Not drinking during pregnancy is the best form of prevention; FAS remains the leading preventable birth defect in the United States today. For decades scientists believed that the number of nerve cells in the adult brain was fixed early in life. If brain damage occurred, then, the best way to treat it was by strengthening the existing neurons, as new ones could not be added. In the 1960s, however, researchers found that new neurons are indeed generated in adulthood a process called neurogenesis. These new cells originate from stem cells, which are cells that can divide indefinitely, renew themselves, and give rise to a variety of cell types. The discovery of brain stem cells and adult neurogenesis provides a new way of approaching the problem of alcoholrelated changes in the brain and may lead to a clearer understanding of how best to treat and cure alcoholism . For example, studies with animals show that high doses of alcohol lead to a disruption in the growth of new brain cells; scientists believe it may be this lack of new growth that results in the long term deficits found in key areas of the brain (such as hippocampal structure and function). Understanding how alcohol interacts with brain stem cells and what happens to these cells in alcoholics is the first step in establishing whether the use of stem cell therapies is an option for treatment. Alcoholics are not all alike. They experience different degrees of impairment, and the disease has different origins for different people. Consequently, researchers have not found conclusive evidence that any one variable is solely responsible for the brain deficits found in alcoholics. Characterizing what makes some alcoholics vulnerable to brain damage whereas others are not remains the subject of active research . The good news is that most alcoholics with cognitive impairment show at least some improvement in brain structure and functioning within a year of abstinence, though some people take much longer (3537). Clinicians must consider a variety of treatment methods to help people stop drinking and to recover from alcoholrelated brain impairments, and tailor these treatments to the individual patient. Advanced technology will have an important role in developing these therapies. Clinicians can use brainimaging techniques to monitor the course and success of treatment, because imaging can reveal structural, functional, and biochemical changes in living patients over time. Promising new medications also are in the early stages of development, as researchers strive to design therapies that can help prevent alcohols harmful effects and promote the growth of new brain cells to take the place of those that have been damaged by alcohol. Researchers studying the effects of alcohol use on the brain are aided by advanced technology such as magnetic resonance imaging (MRI), diffusion tensor imaging (DTI), positron emission tomography (PET), and electrophysiological brain mapping. These tools are providing valuable insight into how alcohol affects the brains structure and function. 183

Long term heavy drinking may lead to shrinking of the brain and deficiencies in the fibers (white matter) that carry information between brain cells (gray matter). MRI and DTI are being used together to assess the brains of patients when they first stop chronic heavy drinking and again after long periods of sobriety, to monitor for possible relapse to drinking. Memory formation and retrieval are highly influenced by factors such as attention and motivation. Studies using MRI are helping scientists to determine how memory and attention improve with long-time abstinence from alcohol, as well as what changes take place when a patient begins drinking again. The goal of these studies is to determine which alcoholinduced effects on the brain are permanent and which ones can be reversed with abstinence. PET imaging is allowing researchers to visualize, in the living brain, the damage that results from heavy alcohol consumption. This snapshot of the brains function enables scientists to analyze alcohols effects on various nerve cell communication systems (i.e., neurotransmitter systems) as well as on brain cell metabolism and blood flow within the brain. These studies have detected deficits in alcoholics, particularly in the frontal lobes, which are responsible for numerous functions associated with learning and memory, as well as in the cerebellum, which controls movement and coordination. PET also is a promising tool for monitoring the effects of alcoholism treatment and abstinence on damaged portions of the brain and may help in developing new medications to correct the chemical deficits found in the brains of people with alcohol dependence. Another hightech tool, electroencephalography (EEG), records the brains electrical signals. Small electrodes are placed on the scalp to detect this electrical activity, which then is magnified and graphed as brain waves (i.e., neural oscillations). These brain waves show realtime activity as it happens in the brain. Many male alcoholics have a distinctive electrophysiological profile that is, a low amplitude of their P3 components. P3 amplitudes in women alcoholics also are reduced, although to a lesser extent than in men. For many years it was assumed that the P3 deficit observed in alcoholics was the result of alcohols damage to the brain. Then it was determined that while many of the clinical symptoms and electrophysiological measures associated with alcoholism return to normal after abstinence, the P3 amplitude abnormality persists. The P3 component is reduced in alcoholics compared with control subjects. This continued deficit in long term abstinent alcoholics suggests that P3 deficits may be a marker of risk for alcohol dependence, rather than a result of alcohol use. In fact, a number of studies have since reported low P3 amplitudes in young people who have not started drinking alcohol but who are at high risk for developing alcoholism, such as young sons of alcoholic fathers. Markers such as the P3 can help identify people who may be at greatest risk for developing problems with alcohol.

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LIST OF HARMFUL EFFECTS OF ALCOHOL

We all are aware that alcohol is bad for health and it has a negative effect on the body. The main cause for it is that when a person consumes alcohol, it mixes in his blood and reaches all the vital parts of the body, having a damaging effect on them. Alcohol directly affects the central nervous system (CNS) and slows down its functions. Therefore drowsiness, depression, nausea and lack of awareness are the common effects of alcohol. However, if alcohol is consumed in large amounts for long time, it has severe effects on the body. Let us have a look at the harmful effects of drinking alcohol in detail. The effects of alcohol on the body depend on several factors. Firstly, it depends on the amount of alcohol consumed by the person, whether he or she has consumed it on a single occasion or after intervals, the person's age and gender, etc. Similarly, the effects shown by alcohol are more severe if the person is already a chronic alcoholic. The following is a list of harmful effects of alcoholic drinks on different vital organs of the body. Harmful Effects Of Alcohol On The Brain The worst effect of alcohol addiction is on the brain. As mentioned above, alcohol directly affects the central nervous system and slows down its function. The other effects include: a) Impaired behavior and judgment b) Memory loss c) Lack of concentration and co-ordination d) Impaired vision and hearing e) Slower motor skills and reactions f) Mood swings g) Slurred speech h) Harmful Effects of Alcohol on the Liver Alcohol slows down the process of metabolism in liver. If this continues for a longer time, it can result in permanent damage of the liver. Effects of alcohol on the liver include: a) Jaundice b) Liver cirrhosis c) Alcoholic hepatitis d) Alcoholic fatty liver e) Liver cancer f) Harmful Effects of Alcohol on Digestive System Excess consumption of alcohol damages the internal lining of the GI tract. It indirectly affects the internal organs and glands of the digestive system. Alcohol side effects on digestive system include: a) Vomiting b) Peptic ulcers 185

c) Throat cancer d) Stomach cancer e) Gastritis f) Hemorrhaging g) Colon cancer h) Harmful Effects of Alcohol on Reproductive System One may not be aware but drinking alcohol indirectly affects the reproductive system in both men and women. In their pregnancy period, women are advised to stop alcohol consumption completely as it can lead to mental retardation in babies. The following are the other damaging effects of alcohol on the reproductive system: Men are advised to stay within 3 to 4 units a day. Women are advised to stay within 2 to 3 units a day. But one drink isnt one unit! Have a look at the chart belowLager1 pint of Stella -3 units 1 pint of Fosters- 2.3 units Cider1 pint of Strongbow 2.6 units Wine -250ml glass red or white wine - 3 units 750ml bottle of wine - 9 units

Alcopops275ml Bacardi Breezer - 1.4 units 275ml Smirnoff Ice SpiritsDouble Vodka - 2.8 units Single Jack Daniels - 1.4 units A binge drinker will be drinking at least double the recommended guidelines. Binge drinkers are more likely to experience harm as a result of their drinking than most people. This means that they are more likely to have accidents, social and psychological problems and have a higher risk of developing tolerance to alcohol. With time and regular use, this person drinks more alcohol than they used to so as to reach the same effect. They may not have experienced harm so far and if they are able to cut down, they can avoid serious problems in the future. A chronic drinker is a regular drinker. It is likely that their physical and mental health are already suffering as a consequence of their drinking, and they may have experienced problems at home or at work. They may be drinking more alcohol than they used to so as to reach the same effect. They may not describe themselves as alcohol dependent but they are at a high risk of developing alcohol dependency in the future. If they are able to cut down, they can avoid problems developing or getting 186

worse. If this person finds it difficult to cut down or feels unwell when suddenly stopping drinking, they should see their GP. In a weight conscious society do you know the facts about alcohol? A night out can have more effects on your waistline than the odd chocolate bar!

Have a look at these examples:

4 pints of Stella : 880 calories 1 Alcopop : 1 regular fries 7 Bacardi Breezers : 1400 calories 1 large glass of wine : 1 doughnut 2.5 pints of Guinness : 1 kebab 7 shots of Tequila : 1 slice of cheese pizza So if you were to hit the town and drink 7 Breezers that would be the equivalent of 3 Big Macs, 10 slices of cheese pizza or 5 Mars bars. The word brand began simply as a way to tell one person's cattle from another by means of a hot iron stamp. The word evolved to become synonymous with a trademark, where a brand could be thought of is a name, sign, symbol, slogan or anything that is used to identify and distinguish a specific product, service, or business. A legally protected brand name is called a Trademark. The word brand has continued to evolve to encompass identity - in effect the personality of a product, company or service. A brand is the personality of a product, service or company and how it relates to key constituencies: Customers, Staff, Partners, Investors etc . Some people distinguish the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the sum of all points of contact with the brand and is known as the brand experience. The psychological aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of people and consists of all the information and expectations associated with a product or service. People engaged in branding seek to develop or align the expectations behind the brand experience, creating the impression that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. A brand is therefore one of the most valuable elements in an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Orientation of the whole organization towards its brand is called brand orientation. Careful brand management seeks to make the product or services relevant to the target audience. Brands should be seen as more than the difference between the actual cost of a product and its selling price they represent the sum of all valuable qualities of a product to the consumer. There are many intangibles involved in business, intangibles left wholly from the income statement and balance sheet which determine how a business is perceived. The learned skill of a knowledge worker, the type of metal working, the type of stitch: all may be without an 'accounting cost' but for those who 187

truly know the product, for it is these people the company should wish to find and keep, the difference is incomparable. A brand which is widely known in the marketplace acquires brand recognition. When brand recognition builds up to a point where a brand enjoys a critical mass of positive sentiment in the marketplace, it is said to have achieved brand franchise. One goal in brand recognition is the identification of a brand without the name of the company present. For example, Disney has been successful at branding with their particular script font, which it used in the logo for go.com. Consmers may look on branding as an important value added aspect of products or services, as it often serves to denote a certain attractive quality or characteristic (see also brand promise). From the perspective of brand owners, branded products or services also command higher prices. Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality of the brand or the reputation of the brand owner.

Brand Awareness
Brand awareness refers to customers' ability to recall and recognize the brand under different conditions and link to the brand name, logo, jingles and so on to certain associations in memory. It helps the customers to understand to which product or service category the particular brand belongs to and what products and services are sold under the brand name. It also ensures that customers know which of their needs are satisfied by the brand through its products. Brand love, or love of a brand, is an emerging term encompassing the perceived value of the brand image. Brand love levels are measured through social media posts about a brand, or tweets of a brand on sites such as Twitter. Becoming a Facebook fan of a particular brand is also a measurement of the level of 'brand love'.

Brand Salience
Brand salience measures the awareness of the brand."To what extent is the brand topof-mind and easily recalled or recognized? What types of cues or reminders are necessary?" (Keller) How do customers remember? The tendency of a brand to be thought of in a buying situation is known as brand salience. Brand salience is the propensity for a brand to be noticed and/or thought of in buying situations and the higher the brand salience the higher its market penetration and therefore its market share. Salience refers not to what customers think about brands but to which ones they think about. Brands which come to mind on an unaided basis are likely to be the brands in a customers consideration set and thus have a higher probability of being purchased. Advertising weight and brand salience are cues to customers indicating which brands are popular, and customers have a tendency to buy popular brands. Also, an increase

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in the salience of one brand can actually inhibit recall of other brands, including brands that otherwise would be candidates for purchase. It is widely acknowledged that buyers do not see their brand as being any different from other brands that are available. They buy a particular brand because they are more aware of it, not because it is more distinctive, or has a point of difference. We now know that all decisions made by humans involve memory processes to a greater or lesser extent. Incoming information from the external environment travels by the sensory memory into the short-term (or working) memory (STM) but if it is not acted upon in a very short time the brain simply discards it. But salient information that is important and received on a regular basis through different channels is passed to the long-term memory (LTM) where it can be stored for many years. Memories are stored or filed via connections between new and existing memories in the different parts of the memory. They are laid down in a framework making some memories easier to access than others. Recall is the process by which an individual reconstructs the stimulus itself from memory, removed from the physicalitys of that reality.

Global Brand
A global brand is one which is perceived to reflect the same set of values around the world. Global brands transcend their origins and creates strong, enduring relationships with consumers across countries and cultures. Global brands are brands which sold to international markets. Examples of global brands include Coca-Cola, McDonald's, Marlboro, Levi's etc.. These brands are used to sell the same product across multiple markets, and could be considered successful to the extent that the associated products are easily recognizable by the diverse set of consumers.

Benefits of Global Branding

In addition to taking advantage of the outstanding growth opportunities, the following drives the increasing interest in taking brands global: 1. economies of scale (production and distribution) 2. lower marketing costs 3. laying the groundwork for future extensions worldwide 4. maintaining consistent brand imagery 5. quicker identification and integration of innovations (discovered worldwide) 6. preempting international competitors from entering domestic markets or locking you out of other geographic markets 7. increasing international media reach (especially with the explosion of the Internet) is an enabler 8. increases in international business and tourism are also enablers

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Global Brand Variables The following elements may differ from country to country: 1. corporate slogan 2. products and services 3. product names 4. product features 5. positionings 6. marketing mixes (including pricing, distribution, media and advertising execution) 7. These differences will depend upon: 8. language differences 9. different styles of communication 10. other cultural differences 11. differences in category and brand development 12. different consumption patterns 13. different competitive sets and marketplace conditions 14. different legal and regulatory environments 15. different national approaches to marketing (media, pricing, distribution, etc.)

Local Brand
A brand that is sold and marketed (distributed and promoted) in a relatively small and restricted geographical area. A local brand is a brand that can be found in only one country or region. It may be called a regional brand if the area encompasses more than one metropolitan market. It may also be a brand that is developed for a specific national market, however an interesting thing about local brand is that the local branding is mostly done by consumers then by the producers. Examples of Local Brands in Sweden are Stomatol, Mijerierna etc. Brand name The brand name is quite often used interchangeably within "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of any product. In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services. A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration. Advertising spokespersons have also become part of some brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg's. Local Branding is usually done by the consumers rather than the producers.

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Types of brand names

Brand names come in many styles. A few include: 1. Acronym: A name made of initials such as UPS or IBM 2. Descriptive: Names that describe a product benefit or function like Whole Foods or Airbus 3. Alliteration and rhyme: Names that are fun to say and stick in the mind like Reese's Pieces or Dunkin' Donuts 4. Evocative: Names that evoke a relevant vivid image like Amazon or Crest 5. Neologisms: Completely made-up words like Wii or Kodak 6. Foreign word: Adoption of a word from another language like Volvo or Samsung 7. Founders' names: Using the names of real people like Hewlett-Packard or Disney 8. Geography: Many brands are named for regions and landmarks like Cisco and Fuji Film 9. Personification: Many brands take their names from myth like Nike or from the minds of ad execs like Betty Crocker The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer jeans. A brandnomer is a brand name that has colloquially become a generic term for a product or service, such as Band-Aid or Kleenex, which are often used to describe any kind of adhesive bandage or any kind of facial tissue respectively.

Brand identity
A product identity, or brand image are typically the attributes one associates with a brand, how the brand owner wants the consumer to perceive the brand and by extension the branded company, organization, product or service. The brand owner will seek to bridge the gap between the brand image and the brand identity. Effective brand names build a connection between the brand personality as it is perceived by the target audience and the actual product/service. The brand name should be conceptually on target with the product/service. Furthermore, the brand name should be on target with the brand demographic. Typically, sustainable brand names are easy to remember, transcend trends and have positive connotations. Brand identity is fundamental to consumer recognition and symbolizes the brand's differentiation from competitors. Brand identity is what the owner wants to communicate to its potential consumers. However, over time, a product's brand identity may acquire (evolve), gaining new attributes from consumer perspective but not necessarily from the marketing communications an owner percolates to targeted consumers. Therefore, brand associations become handy to check the consumer's perception of the brand. 191

Brand identity needs to focus on authentic qualities - real characteristics of the value and brand promise being provided and sustained by organisational and/or production characteristics[9][10]. Visual Brand Identity The visual brand identity manual for Mobil Oil (developed by Chermayeff & Geismar), one of the first visual identities to integrate logotype, icon, alphabet, color palette, and station architecture to create a comprehensive consumer brand experience. The recognition and perception of a brand is highly influenced by its visual presentation. A brands visual identity is the overall look of its communications. Effective visual brand identity is achieved by the consistent use of particular visual elements to create distinction, such as specific fonts, colors, and graphic elements. At the core of every brand identity is a brand mark, or logo. In the United States, brand identity and logo design naturally grew out of the Modernist movement in the 1950s and greatly drew on the principals of that movement simplicity (Mies van der Rohes principle of "Less is more") and geometric abstraction. These principles can be observed in the work of the pioneers of the practice of visual brand identity design, such as Paul Rand, Chermayeff & Geismar and Saul Bass. Often, especially in the industrial sector, it is just the company's name which is promoted (leading to one of the most powerful statements of "branding"; the saying, before the company's downgrading, "No one ever got fired for buying IBM"). In this case a very strong brand name (or company name) is made the vehicle for a range of products (for example, Mercedes-Benz or Black & Decker) or even a range of subsidiary brands (such as Cadbury Dairy Milk, Cadbury Flake or Cadbury Fingers in the United States). Individual branding Each brand has a separate name (such as Seven-Up, Kool-Aid or Nivea Sun (Beiersdorf)), which may even compete against other brands from the same company (for example, Persil, Omo, Surf and Lynx are all owned by Unilever). Attitude branding and Iconic brands Attitude branding is the choice to represent a larger feeling, which is not necessarily connected with the product or consumption of the product at all. Marketing labeled as attitude branding include that of Nike, Starbucks, The Body Shop, Safeway, and Apple Inc.. In the 2000 book No Logo,Naomi Klein describes attitude branding as a "fetish strategy". "A great brand raises the bar it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness, or the affirmation that the cup of coffee you're drinking really matters." Howard Schultz (president, CEO, and chairman of Starbucks. 192

The color, letter font and style of the Coca-Cola and Diet Coca-Cola logos in English were copied into matching Hebrew logos to maintain brand identity in Israel. Iconic brands are defined as having aspects that contribute to consumer's selfexpression and personal identity. Brands whose value to consumers comes primarily from having identity value comes are said to be "identity brands". Some of these brands have such a strong identity that they become more or less "cultural icons" which makes them iconic brands. Examples of iconic brands are: Apple Inc., Nike and Harley Davidson. Many iconic brands include almost ritual-like behaviour when buying and consuming the products. There are four key elements to creating iconic brands (Holt 2004): 1) "Necessary conditions" - The performance of the product must at least be ok preferably with a reputation of having good quality. 2) "Myth-making" - A meaningful story-telling fabricated by cultural "insiders". These must be seen as legitimate and respected by consumers for stories to be accepted. 3) "Cultural contradictions" - Some kind of mismatch between prevailing ideology and emergent undercurrents in society. In other words a difference with the way consumers are and how they some times wish they were. 4) "The cultural brand management process" - Actively engaging in the myth-making process making sure the brand maintains its position as an icon. No-brand" branding Recently a number of companies have successfully pursued "No-Brand" strategies by creating packaging that imitates generic brand simplicity. Examples include the Japanese company Muji, which means "No label" in English and the Florida company No-Ad Sunscreen. Although there is a distinct Muji brand, Muji products are not branded. This no-brand strategy means that little is spent on advertisement or classical marketing and Muji's success is attributed to the word-of-mouth, a simple shopping experience and the anti-brand movement. "No brand" branding may be construed as a type of branding as the product is made conspicuous through the absence of a brand name. Derived brands In this case the supplier of a key component, used by a number of suppliers of the end-product, may wish to guarantee its own position by promoting that component as a brand in its own right. The most frequently quoted example is Intel, which secures its position in the PC market with the slogan "Intel Inside". Brand extension The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, glasses, furniture, hotels, etc. Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene. Dunlop extended its brand 193

from tires to other rubber products such as shoes, golf balls, tennis racquets and adhesives. There is a difference between brand extension and line extension. A line extension is when a current brand name is used to enter a new market segment in the existing product class, with new varieties or flavors or sizes. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: nonalcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents. Multi-brands Alternatively, in a market that is fragmented amongst a number of brands a supplier can choose deliberately to launch totally new brands in apparent competition with its own existing strong brand (and often with identical product characteristics); simply to soak up some of the share of the market which will in any case go to minor brands. The rationale is that having 3 out of 12 brands in such a market will give a greater overall share than having 1 out of 10 (even if much of the share of these new brands is taken from the existing one). In its most extreme manifestation, a supplier pioneering a new market which it believes will be particularly attractive may choose immediately to launch a second brand in competition with its first, in order to pre-empt others entering the market. Individual brand names naturally allow greater flexibility by permitting a variety of different products, of differing quality, to be sold without confusing the consumer's perception of what business the company is in or diluting higher quality products. Once again, Procter & Gamble is a leading exponent of this philosophy, running as many as ten detergent brands in the US market. This also increases the total number of "facings" it receives on supermarket shelves. Sara Lee, on the other hand, uses it to keep the very different parts of the business separate from Sara Lee cakes through Kiwi polishes to L'Eggs pantyhose. In the hotel business, Marriott uses the name Fairfield Inns for its budget chain (and Ramada uses Rodeway for its own cheaper hotels). Cannibalization is a particular problem of a "multibrand" approach, in which the new brand takes business away from an established one which the organization also owns. This may be acceptable (indeed to be expected) if there is a net gain overall. Alternatively, it may be the price the organization is willing to pay for shifting its position in the market; the new product being one stage in this process. Private labels With the emergence of strong retailers, private label brands, also called own brands, or store brands, also emerged as a major factor in the marketplace. Where the retailer has a particularly strong identity (such as Marks & Spencer in the UK clothing sector) this "own brand" may be able to compete against even the strongest brand leaders, and may outperform those products that are not otherwise strongly branded. 194

Individual and Organizational Brands There are kinds of branding that treat individuals and organizations as the "products" to be branded. Personal branding treats persons and their careers as brands. The term is thought to have been first used in a 1997 article by Tom Peters. Faith branding treats religious figures and organizations as brands. Religious media expert Phil Cooke has written that faith branding handles the question of how to express faith in a media-dominated culture. Nation branding works with the perception and reputation of countries as brands. History The word "brand" is derived from the Old Norse brand, meaning "to burn." It refers to the practice of producers burning their mark (or brand) onto their products. Although connected with the history of trademarks and including earlier examples which could be deemed "protobrands" (such as the marketing puns of the "Vesuvinum" wine jars found at Pompeii), brands in the field of mass-marketing originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. When shipping their items, the factories would literally brand their logo or insignia on the barrels used, extending the meaning of "brand" to that of trademark. Bass & Company, the British brewery, claims their red triangle brand was the world's first trademark. Lyles Golden Syrup makes a similar claim, having been named as Britain's oldest brand, with its green and gold packaging having remained almost unchanged since 1885. Another example comes from Antiche Fornaci Giorgi in Italy, whose bricks are stamped or carved with the same proto-logo since 1731, as found in Saint Peter's Basilica in Vatican City. Cattle were branded long before this; the term "maverick", originally meaning an unbranded calf, comes from Texas rancher Samuel Augustus Maverick who, following the American Civil War, decided that since all other cattle were branded, his would be identified by having no markings at all. Even the signatures on paintings of famous artists like Leonardo Da Vinci can be viewed as an early branding tool. Factories established during the Industrial Revolution introduced mass-produced goods and needed to sell their products to a wider market, to customers previously familiar only with locally-produced goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product. Campbell soup, Coca-Cola, Juicy Fruit gum, Aunt Jemima, and Quaker Oats were among the first products to be 'branded', in an effort to increase the consumer's familiarity with their products. Many brands of that era, such as Uncle Ben's rice and Kellogg's breakfast cereal furnish illustrations of the problem. 195

Around 1900, James Walter Thompson published a house ad explaining trademark advertising. This was an early commercial explanation of what we now know as branding. Companies soon adopted slogans, mascots, and jingles that began to appear on radio and early television. By the 1940s, manufacturers began to recognize the way in which consumers were developing relationships with their brands in a social/psychological/anthropological sense. From there, manufacturers quickly learned to build their brand's identity and personality (see brand identity and brand personality), such as youthfulness, fun or luxury. This began the practice we now know as "branding" today, where the consumers buy "the brand" instead of the product. This trend continued to the 1980s, and is now quantified in concepts such as brand value and brand equity. Naomi Klein has described this development as "brand equity mania". In 1988, for example, Philip Morris purchased Kraft for six times what the company was worth on paper; it was felt that what they really purchased was its brand name. Marlboro Friday: April 2, 1993 - marked by some as the death of the brand the day Philip Morris declared that they were to cut the price of Marlboro cigarettes by 20%, in order to compete with bargain cigarettes. Marlboro cigarettes were notorious at the time for their heavy advertising campaigns, and well-nuanced brand image. In response to the announcement Wall street stocks nose-dived[12] for a large number of 'branded' companies: Heinz, Coca Cola, Quaker Oats, PepsiCo. Many thought the event signalled the beginning of a trend towards "brand blindness" (Klein 13), questioning the power of "brand value".

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5.3- BRAND LOYALTY

Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service or other positive behaviors such as word of mouth advocacy. Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints such as vendor lock-in, a lack of viable alternatives, or out of convenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Joe has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality. An example of a major brand loyalty program that extended for several years and spread worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty is the dedication that many Mac users show to the Apple company and its products. From the point of view of many marketers, loyalty to the brand in terms of consumer usage is a key factor: 1. Usage rate 2. Loyalty 3. Factors influencing brand loyalty 4. Industrial markets 5. Portfolios of brands 6. Market inertia 7. Examples of brand loyalty promotions Usage Rate Most important of all, in this context, is usually the 'rate' of usage, to which the Pareto 80-20 Rule applies. Kotler's 'heavy users' are likely to be disproportionately important to the brand (typically, 20 percent of users accounting for 80 percent of usage and of suppliers' profit). As a result, suppliers often segment their customers into 'heavy', 'medium' and 'light' users; as far as they can, they target 'heavy users'. Loyalty A second dimension, however, is whether the customer is committed to the brand. Philip Kotler, again, defines four patterns of behaviour: Hardcore Loyals - who buy the brand all the time. Softcore Loyals - loyal to two or three brands. Shifting Loyalty - moving from one brand to another. Switchers - with no loyalty

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Factors influencing brand loyalty It has been suggested that loyalty includes some degree of pre-dispositional commitment toward a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several distinct psychological processes and it entails multivariate measurements. Customers' perceived value, brand trust, customers' satisfaction, repeat purchase behaviour, and commitment are found to be the key influencing factors of brand loyalty. Commitment and repeated purchase behaviour are considered as necessary conditions for brand loyalty followed by perceived value, satisfaction, and brand trust. Fred Reichheld, one of the most influential writers on brand loyalty, claimed that enhancing customer loyalty could have dramatic effects on profitability. Among the benefits from brand loyalty specifically, longer tenure or staying as a customer for longer was said to be lower sensitivity to price. This claim had not been empirically tested until recently. Recent research found evidence that longerterm customers were indeed less sensitive to price increases. Industrial markets In industrial markets, organizations regard the 'heavy users' as 'major accounts' to be handled by senior sales personnel and even managers; whereas the 'light users' may be handled by the general salesforce or by a dealer. Portfolios of brands Andrew Ehrenberg, then of the London Business School said that consumers buy 'portfolios of brands'. They switch regularly between brands, often because they simply want a change. Thus, 'brand penetration' or 'brand share' reflects only a statistical chance that the majority of customers will buy that brand next time as part of a portfolio of brands they favour. It does not guarantee that they will stay loyal. Influencing the statistical probabilities facing a consumer choosing from a portfolio of preferred brands, which is required in this context, is a very different role for a brand manager; compared with the much simpler one traditionally described of recruiting and holding dedicated customers. The concept also emphasises the need for managing continuity. Market inertia One of the most prominent features of many markets is their overall stability or inertia. Thus, in their essential characteristics they change very slowly, often over decades sometimes centuries rather than over months. This stability has two very important implications. The first is that those who are clear brand leaders are especially well placed in relation to their competitors and should want to further the inertia which lies behind that stable position. This, however, still demands a continuing pattern of minor changes to keep up with the marginal changes in consumer taste (which may be minor to the theorist but will still be crucial in terms of those consumers' purchasing patterns as markets do not favour the overcomplacent). These minor investments are a small price to pay for the long term profits which brand leaders usually enjoy. 198

The second, and more important, is that someone who wishes to overturn this stability and change the market (or significantly change one's position in it), massive investments must be expected to be made in order to succeed. Even though stability is the natural state of markets, sudden changes can still occur, and the environment must be constantly scanned for signs of these. Examples of brand loyalty promotions 1. My Coke Rewards 2. Pepsi Stuff When you work behind a bar one of the key things to do, to develop a loyal clientele, is remember peoples drinks. The surprising thing to me is not that my head has a database of hundreds of drinks and customers faces, but the fact that these people rarely ever change what they drink. Is it proper to go through life only drinking one brand of whisky? Is it ok to only drink a dry Grey Goose martini, up with a twist and never deviate? The other thing about brand loyalty is that it seems to apply to spirits and beer, but not wine. What is the psychological reason for this brand loyalty and if bartenders could break it, would it be good for the cocktail world. Back when I was in college I was a brand loyalist. I liked Labatts Blue which was my beer of choice, probably because of marketing and single syllable name. Easily pronounced beers are best when you drink a lot because the bartender will understand you no matter what your intoxication level; give me a Blue or give me a Bud are a couple of good examples. But I eventually grew up and opened my mind to the hundreds of bottles that grace beer stores every where. I also started to appreciate good spirits. At the current time Im not loyal to any particular brand, but I do have preferences. I like Havana Club rum in cocktails and I like Forty Creek whisky in my Manhattans, but if someone offered me a Wisers Very Old I would happily take them up on the offer. One thing is for sure though, and its that I like premium spirits over rail spirits. Part of the reason is that I love to try new spirits and beers, much to my wifes dismay. If It is spotted something shiny and new at the liquor store Ill usually end up buying it at some point. Because it might offer something exceptional that Ive never experienced. Its all about curiosity, exploring and the experience. To me spirits are like wine, each new bottle has something unique to offer. For many people, liquor and beer are something that they define themselves with. If I say Jack Daniels, what image comes to mind of the person who drink this? For me its bikers in black. If I say Remy Martin XO cognac, you might think stuffy old guy, or hip hop artist. Like many manufactures, spirit companies try to define their market and appeal to a certain demographic. Brand loyalty is good for business, but not for life experiences. Crown Royal seems to be pushing the NASCAR demographic with their recent advertising campaign. Sure this opens up a new market for Crown Royal, but does it alienate another? Probably not, but it is the advertising that defines the product, not the stuff in the bottle. Remember Crown Royal was originally produced for royalty and NASCAR fans are a little different than royalty. 199

Wine doesnt have this problem because each vintage year is different. Some vineyards have developed a reputation for producing great wines, but production is generally limited on a world wide scale, so oenophiles are forced to try new wines, because not every restaurant or liquor store will stock it. This openness about trying a bottle of something youve never heard of, and maybe paying a princely sum for it, is outstanding. Why cant these people drink cocktails more often. There are a couple of issues with opening peoples minds. First, people are naturally lazy, and we hate fighting inertia. It is easy to order a Crown and Coke, it doesnt take any thinking and you know what you are getting. Also, the fact that many bartenders are pushy and want your drink order Now! which makes browsing the spirit selection a bit daunting. It seems people have a default setting and if someone pushes you, an automatic response is initiated: Crown & Coke. One other problem is that many bars stock way too few spirits. But that is changing with the realization of the super and ultra premium back bars. The final problem is the association of product to image. If you drink Jack Daniels you may be perceived as tough, if you drink cognac youll be sophisticated or snooty and if you are a guy drinking Hipnotiq on the rocks, well then, Im proud of you for drinking what you like. The best way to get people to try new things is to up sell. There are some great bartenders who will make suggestions, or in corporate speak up sell, for the benefit of the customer. This can be substituting a different spirit into a cocktail or just suggesting a better cocktail. But, this is very dependant on the establishment and the management. A well stocked bar is key to break brand loyalty and breaking the owners brand loyalties are also important. But most importantly, and this is for bartenders, dont be so pushy. If you are busy just check with the customer politely, if they are still thinking, move on to the next customer, and then go back afterward. Dont huff and puff and make it like its the end of the world. Let people enjoy what the bar has to offer.

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CHAPTER 6: DISTRIBUTION CHANNEL.

6.1- BREWERIES
Physical distribution (or place) is one of the four elements of the marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user. The other three parts of the marketing mix are product, pricing, and promotion. The distribution channel: Chain of inteRSediaries,each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user.... This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user. Channels A number of alternate 'channels' of distribution may be available: Distributor, who sells to retailers, Retailer (also called dealer or reseller), who sells to end customers Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. If we mention in a single sentence the distribution channel is nothing but it is a process of transfer the products or servises from Producer to Customer or end user. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

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Channel decisions Channel strategy Gravity & gravity Push and Pull strategy Product (or service) Cost Consumer location Managerial concerns The channel decision is very important. In theory at least, there is a foRS of trade-off: the cost of using inteRSediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be marketoriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier: Channel membership Channel motivation Monitoring and managing channels Type of marketing channel 1.Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. 2.Selective distribution - This is the noRSal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. 3.Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'. Channel motivation It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a compensation is offered to the distributors' sales personnel, so that they are tempted to push the product. Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products. Monitoring and managing channels 202

In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain. In practice, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects. these channels show marketing strategies of an organisation. Effective management of distribution channel requires making and implementing decision in these areas.

Importance of Distribution Channels Distribution channels often require the assistance of others in order for the marketer to reach its target market. But why exactly does a company need others to help with the distribution of their product? Wouldnt a company that handles its own distribution functions be in a better position to exercise control over product sales and potentially earn higher profits? Also, doesnt the Internet make it much easier to distribute products thus lessening the need for others to be involved in selling a companys product? While on the surface it may seem to make sense for a company to operate its own distribution channel (i.e., handling all aspects of distribution) there are many factors preventing companies from doing so. While companies can do without the assistance of certain channel members, for many marketers some level of channel partnership is needed. For example, marketers who are successful without utilizing resellers to sell their product (e.g., Dell Computers sells mostly through the Internet and not in retail stores) may still need assistance with certain parts of the distribution process (e.g., Dell uses parcel post shippers such as FedEx and UPS). In Dells case creating their own transportation system makes little sense given how large such a system would need to be in order to service Dells customer base. Thus, by using shipping companies Dell is taking advantage of the benefits these services offer to Dell and to Dells customers.

FMCG Distribution Channels in India: Challenges and Opportunities for Manufacturers and Retailers. India's economy is projected to grow at a fast clip over the next few years. With increasing purchasing power and a rising middle class, the fast moving consumer goods (FMCG) industry is posed to grow dramatically. To leverage opportunities, FMCG manufacturers and retailers will have to develop and implement deliberate strategies for gaining market access. This paper provides an in-depth look at the strategic role of distribution channels in the FMCG industry. Specifically, it surveys the state of current distribution channels in India and identifies four archetypes that FMCG fiRSs can use as a starting point to develop their distribution strategy. With a 203

population in excess of 1 billion and current annual GDP growth of 9% ,India is a major player in the world economy. Not surprisingly, by 2050 the country is projected to become the third largest economy after China and the United States.India's economic prowess is being driven by the purchasing power of a burgeoning middle class as wealth steadily trickles down to the bottom of the economic pyramid. Given this brisk growth, domestic industries are in a race against time to ramp up capacity, increase production, and achieve market access via channels of distribution. One sector that is expected to bear the brunt of this demand is the fast moving consumer goods (FMCG) industry with retail sales expected to top $40 billion by 2015.FMCG's encompass a wide range of products such as toiletries, soap, cosmetics, toothpaste, shaving cream, and detergents . Multinationals with a significant FMCG presence in India are Unilever, Procter and Gamble, Nestle, and Cadbury. Despite its potential, the FMCG industry faces several significant marketing constraints. First, manufacturers and retailers have to grapple with fragmented markets and a plethora of channel foRSs in a constant state of flux. In particular, numerous street-side vendors, hawkers, and roughly 12 million unregulated neighborhood mom-and-pop or kirana stores create strong institutional forces that cannot be ignored. Second, frequent regulatory changes affect channel structure and exacerbate adaptation challenges. For example, in 2006 the government allowed direct foreign entry by single brand retailers. Consequently, fiRSs scampered for upscale retail space in a hypercompetitive real estate market while domestic manufacturers faced a multitude of challenges in the areas of new product introduction, line stretching, and branding. Given the importance of distribution channels to the Indian economy, one would expect a considerable body of relevant academic research to be readily available. However, a careful appraisal of extant research belies this expectation. While India has garnered much attention, the focus has primarily been on general topics pertaining to the socio-economic, political, and business environments. In recent years, the emphasis has shifted to include research on other topics like entry modes and outsourcing. However, there remains a paucity of systematic work on the impact of distribution on the Indian economy in general and the FMCG industry in particular. This study attempts to bridge the gap in our understanding of FMCG distribution channels in India. More specifically, the objectives of this research are: a) to appraise distribution channel structure and management challenges for FMCG products, b) to delineate variations in channel foRSs across markets, and c) to outline the strategic role of FMCG distribution channels in gaining market access and achieving competitive advantage. The paper is organized in the following manner. First, the impact of changes in 175 the regulatory environment on the FMCG industry in India. The heterogeneous nature of supply and demand by outlining and discussing a framework for classifying consumer markets given myriad market variations. This is followed by a discussion of specific channel archetypes that collectively describe variations in channel foRSs across markets. This also describes the marketing implications of channel archetypes for FMCG manufacturers and retailers. The Regulatory Environment India gained independence from the British in 1947 and decided to create an egalitarian society by 204

adopting the Soviet model of centralized economic planning. The hallmarks of this command and control economy were: a) the primacy of the public sector or government enterprises in core sectors, b) import substitution and protection of domestic fiRSs, and c) tighter control of economic activity via a license and peRSit regime. Over time, this system engendered a colossal, insular, and highly inefficient bureaucracy, which could not replicate the free market. For example, political considerations forced bureaucrats to subsidize and administer prices in key infrastructure industries such as construction, electricity, and water thereby discouraging private investment. Not surprisingly, overall economic growth stalled, the rich-poor chasm worsened, and the government faced a severe balance-ofpayment crisis in 1991 with foreign reserves enough to last just two weeks. At the behest of the International Monetary Fund, the government ushered in economic refoRSs by opening up the economy to foreign and domestic private investment. As refoRSs accelerated, multinational fiRSs such as Procter and Gamble entered the FMCG market. At the same time, a number of domestic retailers such as Pantaloon and Reliance opened up western style retail channels in the major urban centers of the country. Almost three fourths of India's population or approximately 700 million people live in rural areas which lack basic infrastructure such as roads, transportation, electricity, water, health, and education. Under centralized planning the rural population languished at the bottom of the economic ladder with meager discretionary purchasing power. For decades, the average rural person had to 176 sustain his family on a wage of less than one dollar a day. Given the lack of roads and viable means of transportation, FMCG fiRSs had to navigate through a labyrinthine maze of fragmented, improvised, long, and inefficient channels for gaining access to rural markets. To overcome infrastructure bottlenecks, a multitude of regional manufacturers serving a narrow geographical market cropped up. The mushrooming of local production and ensuing brand clutter created differentiation challenges for national fiRSs which were further exacerbated by widespread production and marketing of copycat products and fake brands. In contrast to rural areas, urban markets with well developed distribution channels offer relatively seamless market access to FMCG fiRSs. For the most part, these channels are the ubiquitous small kirana or mom and pop stores employing fewer than four people and selling a narrow range of products. Customers value these outlets because of their convenient location within walking distance of home or work, free home delivery, familiarity, and the provision of credit. In recent years, with economic liberalization, private fiRSs such as Big Bazaar, Subhiksha, Reliance Fresh and Vishal Mega Mart, all employing western style retailing foRSats have entered urban markets in a major way. Of late, the rate of growth of western style retailing outlets has accelerated with the Indian government paving the way for foreign direct investment in shopping malls and warehouses. Kirana stores, fearing a direct threat to their livelihood have secured the backing of trade unions and rabble-rousing politicians to stage massive protests against organized retail. Realizing the opportunity to benefit from a captive and disgruntled vote-bank, some political parties have promised to change laws favoring 205

organized retail. The present government is treading gingerly on this issue and as a sop to kirana stores has allowed only single brand retailers to enter the country, which in effect has locked out behemoths like Wal-Mart and Carrefour from the market. Classifying Consumer Markets in India The task of classifying the consumer market in India into a meaningful and useful taxonomy is challenging given the perplexing linguistic, cultural, political, geographical, and economic diversity of the country. Unlike China, where Mandarin is the main language, there are sixteen official languages and more than 500 dialects spoken in India. English, a legacy of the British rule, remains a link language and the major means of communication in government, commerce, and law. Hinduism, with a pantheon of gods at its core is the dominant faith. However, in practice, numerous variations of gods, goddesses, deities, temples, and an almost endless potpourri of festivals, beliefs, rituals, and customs characterize the religious milieu. India is a federation of states with the federal government in charge of significant national matters like currency, defense and foreign affairs. The Congress party, which was at the vanguard of India's freedom movement, ruled the country for more than four decades after India gained independence from the British in 1947. The party was wedded to socialism and state control of the economy and during its rule, private business could not thrive. Today there are hundreds of political parties split along narrow caste, geographic, economic, and religious lines, which clutter the political scene.

BREWERY
A brewery is a dedicated building for the making of beer, though beer can be made at home, and has been for much of beer's history. A company which makes beer is called either a brewery or a brewing company. The diversity of size in breweries is matched by the diversity of processes, degrees of automation, and kinds of beer produced in breweries. Typically a brewery is divided into distinct sections, with each section reserved for one part of the brewing process. History A 16th-century brewery. The oldest brewery in the world is believed to be the GeRSan state-owned Weihenstephan brewery in the city of Freising, Bavaria. It can trace its history back to 1040 A.D. (although the Zatec brewery in the Czech Republic claims it can prove that it paid a beer tax in 1004 A.D.). The industrialization of the brewery Beer, in some foRS, can be traced back almost 5000 years to Mesopotamian writings describing daily rations of beer and bread to workers. Before the rise of production breweries, the production of beer took place at home and was the domain of women, 206

as baking and brewing were seen as "women's work". Breweries, as production facilities reserved for making beer, did not emerge until monasteries and other Christian institutions started producing beer not only for their own consumption, but also to use as payment. This industrialization of brewing shifted the responsibility of making beer to men. Early breweries were almost always built on multiple stories, with equipment on higher floors used earlier in the production process, so that gravity could assist with the transfer of product from one stage to the next. This layout often is preserved in breweries today, but mechanical pumps allow more flexibility in brewery design. Early breweries typically used large copper vats in the brewhouse, and feRSentation and packaging took place in lined wooden containers. Such breweries were common until the Industrial Revolution, when better materials became available, and scientific advances led to a better understanding of the brewing process. Today, almost all brewery equipment is made of stainless steel. Major technological advances 19th century brewery installationsA handful of major breakthroughs have led to the modern brewery and its ability to produce the same beer consistently. The steam engine, vastly improved in 1765 by James Watt, brought automatic stirring mechanisms and pumps into the brewery. It gave brewers the ability to mix liquids more reliably while heating, particularly the mash, to prevent scorching, and a quick way to transfer liquid from one container to another. Almost all breweries now use electric-powered stirring mechanisms and pumps. The steam engine also allowed the brewer to make greater quantities of beer, as human power was no longer a limiting factor in moving and stirring. Carl von Linde, along with others, is credited with developing the refrigeration machine in 1871. Refrigeration allowed beer to be produced year-round, and always at the same temperature. Yeast is very sensitive to temperature, and if a beer was produced during summer, the yeast would impart unpleasant flavors onto the beer. Most brewers would produce enough beer during winter to last through the summer, and store it in underground cellars, or even caves, to protect it from summer's heat. Most importantly, the discovery of microbes by Louis Pasteur was instrumental in the control of feRSentation. The idea that yeast was a microorganism that worked on wort to produce beer led to the isolation of a single yeast cell by Emil Christian Hansen. Pure yeast cultures allow brewers to pick out yeasts for their feRSentation characteristics, including flavor profiles and feRSentation ability. Some breweries in Belgium, however, still rely on "spontaneous" feRSentation for their beers. The modern brewery 207

Finished bottles being cased at a modern breweryBreweries today are made predominantly of stainless steel, although vessels often have a decorative copper cladding for a nostalgic look. Stainless steel has many favorable characteristics which make it a well-suited material for brewing equipment. It imparts no flavor in beer, it reacts with very few chemicals, which means almost any cleaning solution can be used on it (concentrated chlorine bleach being a notable exception) and it is very sturdy. Sturdiness is important, as most tanks in the brewery have positive pressure applied to them as a matter of course, and it is not unusual that a vacuum will be foRSed incidentally during cleaning. Heating in the brewhouse usually is achieved through pressurized steam, although direct-fire systems are not unusual in small breweries. Similarly, cooling in other areas of the brewery is typically done by cooling jackets on tanks, which allow the brewer to control precisely the temperature on each tank individually, although whole-room cooling is also common. Today modern brewing plants perfoRS myriad analyses on their beers for quality control purposes. Shipments of ingredients are analyzed to correct for variations. Samples are pulled at almost every step and tested for oxygen content, unwanted microbial infections, and other beer-aging compounds. A representative sample of the finished product often is stored for months for comparison, when complaints are received. Brewing process Work in the brewery is typically divided into 7 steps: Mashing, Lautering, Boiling, FeRSenting, Conditioning, Filtering, and Filling. Mashing is the process of mixing milled grain (typically malted grain) with water, and heating this mixture up with rests at certain temperatures to allow enzymes in the malt to break down the starch in the grain into sugars, typically maltose. Lautering is the separation of the extracts won during mashing from the spent grain to create wort. It is achieved in either a lauter tun, a wide vessel with a false bottom, or a mash filter, a plate-and-frame filter designed for this kind of separation. Lautering has two stages: first wort run-off, during which the extract is separated in an undiluted state from the spent grains, and sparging, in which extract which remains with the grains is rinsed off with hot water. Boiling the wort ensures its sterility, and thus prevents infections. During the boil, hops are added, which contribute their bitterness, aroma and flavor compounds to the beer. Along with the heat of the boil, they cause proteins in the wort to coagulate and the pH of the wort to fall, and they inhibit the later growth of certain bacteria. Finally, 208

the vapors produced during the boil volatilize off-flavors, including dimethyl sulfide precursors. The boil must be conducted so that it is even and intense. The boil lasts between 60 and 120 minutes, depending on its intensity, the hop addition schedule, and volume of wort the brewer expects to evaporate. FeRSenting The entrance of a brewery. An old boil kettle has been placed outside as decoration.FeRSentation, as a step in the brewing process, starts as soon as yeast is added to the cooled wort. This is also the point at which the product is first called beer. It is during this stage that feRSentable sugars won from the malt (maltose, maltotriose, glucose, fructose and sucrose) are metabolized into alcohol and carbon dioxide. FeRSentation tanks come in all sorts of foRSs, from enoRSous cylindroconical vessels which can look like storage silos, to five gallon glass carboys in a homebrewer's closet. Most breweries today use cylindroconical vessels, or CCVs, which have a conical bottom and a cylindrical top. The cone's aperture is typically around 70, an angle that will allow the yeast to flow smoothly out through the cone's apex at the end of feRSentation, but is not so steep as to take up too much vertical space. CCVs can handle both feRSenting and conditioning in the same tank. At the end of feRSentation, the yeast and other solids which have fallen to the cone's apex can be simply flushed out through a port at the apex. Open feRSentation vessels are also used, often for show in brewpubs, and in Europe in wheat beer feRSentation. These vessels have no tops, which makes harvesting topfeRSenting yeasts very easy. The open tops of the vessels make the risk of infection greater, but with proper cleaning procedures and careful protocol about who enters feRSentation chambers, the risk can be well controlled. FeRSentation tanks are typically made of stainless steel. If they are simple cylindrical tanks with beveled ends, they are arranged vertically, as opposed to conditioning tanks which are usually laid out horizontally. A very few breweries still use wooden vats for feRSentation but wood is difficult to keep clean and infection-free and must be repitched more or less yearly. After high kraeusen, a bung device (GeRSan: Spundapparat) is often put on the tanks to allow the CO2 produced by the yeast to naturally carbonate the beer. This bung device can be set to a given pressure to match the type of beer being produced. The more pressure the bung holds back, the more carbonated the beer becomes. 209

Conditioning When the sugars in the feRSenting beer have been almost completely digested, the feRSentation slows down and the yeast starts to settle to the bottom of the tank. At this stage, the beer is cooled to around freezing, which encourages settling of the yeast, and causes proteins to coagulate and settle out with the yeast. Unpleasant flavors such as phenolic compounds become insoluble in the cold beer, and the beer's flavor becomes smoother. During this time pressure is maintained on the tanks to prevent the beer from going flat. If the feRSentation tanks have cooling jackets on them, as opposed to the whole feRSentation cellar being cooled, conditioning can take place in the same tank as feRSentation. Otherwise separate tanks (in a separate cellar) must be employed. Filtering Filtering the beer stabilizes the flavour, and gives beer its polished shine and brilliance. Not all beer is filtered. When tax deteRSination is required by local laws, it is typically done at this stage in a calibrated tank. Filters come in many types. Many use pre-made filtration media such as sheets or candles, while others use a fine powder made of, for example, diatomaceous earth, also called kieselguhr, which is introduced into the beer and recirculated past screens to foRS a filtration bed. Filters range from rough filters that remove much of the yeast and any solids (e.g. hops, grain particles) left in the beer, to filters tight enough to strain color and body from the beer. NoRSally used filtration ratings are divided into rough, fine and sterile. Rough filtration leaves some cloudiness in the beer, but it is noticeably clearer than unfiltered beer. Fine filtration gives a glass of beer that you could read a newspaper through, with no noticeable cloudiness. Finally, as its name implies, sterile filtration is fine enough that almost all microorganisms in the beer are removed during the filtration process. Filling Filling (a.k.a. "packaging") is putting the beer into the containers in which it will leave the brewery. The containers are usually bottles, cans, or kegs; sometimes bulk tanks are used for high-volume customers. Brewing companies Brewery promotion, Salt Lake City, 1912Brewing companies range widely in the volume and variety of beer produced, ranging from small breweries, such as Ringwood Brewery, to massive multinational conglomerates, like SABMiller in London or Anheuser-Busch InBev, that produce hundreds of millions of barrels 210

annually. The biggest brewer in the world is the Belgian company Anheuser-Busch InBev. Some commonly used descriptions of breweries are: MicrobreweryA late 20th century name for a small brewery. The teRS started to be replaced with craft brewer at the start of the 21st century.[citation needed] BrewpubA brewery whose beer is brewed primarily on the same site from which it is sold to the public, such as a pub or restaurant. If the amount of beer that a brewpub distributes off-site beer exceeds 75%, it may also be described as a craft or microbrewery. Contract brewing company or contract breweryA business that hires another brewery to produce its beer. The contract brewing company generally handles all of the beers marketing, sales, and distribution, while leaving the brewing and packaging to the producer-brewery (which, confusingly, is also sometimes referred to as a contract brewer). Regional breweryAn established teRS for a brewery that supplies beer in a fixed geographical location. With modern distribution methods this teRS is falling out of use. Yuengling Brewery a regional brewery in Pottsville, Pennsylvania Craft brewerA teRS that is replacing microbrewery. A craft brewery is a brewery which does not use adjuncts and/or is considered to make craft beer. Macrobrewery or MegabreweryTeRSs for a large brewery, which sometimes carry a negative connotation. A brewmaster, or foRSerly braumeister, is a person who is in charge of the production of beer. The major breweries employ engineers with a Chemistry/Biotechnology background. The title of Brewmaster is given to a person after 2 years of extra study in the art of brewing thus earning a degree equivalent to a Master's degree. There are organisations that assist the development of brewing, such as the Seibel Institute of Technology in the USA and the Institute of Brewing and Distilling in the UK. Craft brewing in the United States Before Prohibition in the United States, breweries were local institutions, with a few exceptions. The costs involved in moving large quantities of beer while maintaining its quality necessitated that beer be made near where it was to be consumed. Prohibition, as could be expected, closed most of the breweries in the United States, and the few that were able to remain open by producing near beer, malt extract, yeast, and other beer-related products, were in an advantageous position to produce and sell beer after the repeal of Prohibition. During the same period, advancements in refrigeration and motor vehicles enabled large regional and national breweries to maintain product quality while being transported a greater distance. These remaining breweries quickly grew large enough to become household names all over the nation, and concentrated mostly on the style with the broadest appeal: American light lager. Local breweries, primarily producing niche beers, were lost in America. 211

In 1978, Jimmy Carter signed into law a bill explicitly allowing people to brew beer for private consumption. As the homebrewing movement grew, homebrewers looked to re-create beers they had enjoyed in places with a more varied beer assortment. The rise of imported beers and homebrewing brought a demand for more beer styles, and locally brewed beer. Answering this need and growing from the same movement, small, quality-oriented breweries began popping up across America and a whole new microbrewing industry was born. Many of these start-up microbreweries, have since grown into major regional breweries in their own right sometimes brewing the beer for other smaller brands. However many states continue to enforce laws requiring that all beer be sold through the distribution networks of the major national breweries. As a result, most microbreweries have remained small; supplying local markets or, in the case of brew pubs, simply supplying the restaurant in which they are located.

BONDERS(WHOLESALERS) Wholesaling, jobbing, or distributing is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services. In general, it is the sale of goods to anyone other than a standard consumer. According to the United Nations Statistics Division, "wholesale" is the resale (sale without transfoRSation) of new and used goods to retailers, to industrial, commercial, institutional or professional users, or to other wholesalers, or involves acting as an agent or broker in buying merchandise for, or selling merchandise to, such persons or companies. Wholesalers frequently physically assemble, sort and grade goods in large lots, break bulk, repack and redistribute in smaller lots.While wholesalers of most products usually operate from independent premises, wholesale marketing for foodstuffs can take place at specific wholesale markets where all traders are congregated. Traditionally wholesalers were closer to the markets they supplied than the source they got the products from. However, with the advent of the internet and E-procurement there are an increasing number of wholesalers located nearer manufacturing bases in Mainland China, Taiwan and South East Asia like Chinavasion, Ownta, Salehoo and Modbom, many of which offer drop shipping services to companies and individuals. Taxes Often wholesellers are not required to charge their buyers sales tax, though sometimes they may be required to (or may per discretion) charge a special wholesale tax. 212

6.2 - RETAILERS
"Retail" and "Retail stores" redirect here. For the comic strip by NoRS Feuti, see Retail (comic strip). Drawing of a self-service store. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The teRS "retailer" is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation. Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail order, are foRSs of non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often involves window shopping (just looking, not buying) and browsing and does not always result in a purchase. Etymology The Apple Store retail location on the Magnificent Mile in Chicago. The world's only GaRSin retail location is located on the Magnificent Mile in Chicago.Retail comes from the French word retailler, which refers to "cutting off, clip and divide" in teRSs of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring".Like the French, the word retail in both Dutch and GeRSan (detailhandel and Einzelhandel respectively), also refers to the sale of small quantities of items.

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Types of retail outlets

San Juan de Dios Market in Guadalajara, Jalisco Inside a supeRSarket in RussiaA marketplace is a location where goods and services are exchanged. The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world. In some parts of the world, the retail business is still dominated by small family-run stores, but this market is increasingly being taken over by large retail chains. Retail is usually classified by type of products as follows: Food products Soft goods - clothing, apparel, and other fabrics. Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods, etc. There are the following types of retailers by marketing strategy: SupeRSarkets - sell mostly food products Department stores - very large stores offering a huge assortment of "soft" and "hard goods". Discount stores - tend to offer a wide array of products and services, but they compete mainly on price. General merchandise store - a hybrid between a department store and discount store Warehouse store - low-cost, often high-quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee Variety store or "dollar store" - extremely low-cost goods, with limited selection Demographic - retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy individuals) Some stores take a no frills approach, while others are "mid-range" or "high end", depending on what income level they target. Other types of retail store include: General store - a store which sells most goods needed, typically in a rural area Convenience store - a small store often with extended hours, stocking everyday or roadside items Big-box stores encompass larger department, discount, general merchandise, and warehouse stores. Merchandising (merchandizing)

214

A food vendor in India Adidas store in Tel Aviv, IsraelIt is defined as sales promotion as a comprehensive function including market research, development of new products, coordination of manufacture and marketing, and effective advertising and selling. Retail pricing The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailer's cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer. In Western countries, retail prices are often called psychological prices or odd prices. Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not clearly displayed, there can be price discrimination, where the sale price is dependent upon who the customer is. For example, a customer may have to pay more if the seller deteRSines that he or she is willing and/or able to. Another example would be the practice of discounting for youths or students. Transfer mechanism There are several ways in which consumers can receive goods from a retailer: Counter service, where goods are out of reach of buyers and must be obtained from the seller. This type of retail is common for small expensive items (e.g. jewelry) and controlled items like medicine and liquor. It was common before the 1900s in the United States and is more common in certain countries.[which?] Delivery (commerce), where goods are shipped directly to consumer's homes or workplaces. Mail order from a printed catalog was invented in 1744 and was common in the late 1800s and early 1900s. Ordering by telephone is now common, either from a catalog, newspaper, television advertisement or a local restaurant menu, for immediate service (especially for pizza delivery). Direct marketing, including telemarketing and television shopping channels, are also used to generate telephone orders. Online shopping started gaining significant market share in developed countries in the 2000s. Door-to-door sales, where the salesperson sometimes travels with the goods for sale. Self-service, where goods may be handled and examined prior to purchase, has become more common since the 1920s.. Second hand retail Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goods to the shop to be sold. In give-away shops goods can be taken for free. Another foRS is the pawnshop, in which goods are sold that were used as collateral for loans. There are also "consignment" shops, which are where a person can place an item in a store and if it sells, the person gives the shop owner a percentage of the sale 215

price. The advantage of selling an item this way is that the established shop gives the item exposure to more potential buyers. Sales techniques Behind the scenes at retail, there is another factor at work. Corporations and independent store owners alike are always trying to get the edge on their competitors. One way to do this is to hire a merchandising solutions company to design custom store displays that will attract more customers in a certain demographic. The nation's largest retailers spend millions every year on in-store marketing programs that correspond to seasonal and promotional changes. As products change, so will a retail landscape. Retailers can also use facing techniques to create the look of a perfectly stocked store, even when it is not. A destination store is one that customers will initiate a trip specifically to visit, sometimes over a large area. These stores are often used to "anchor" a shopping mall or plaza, generating foot traffic, which is capitalized upon by smaller retailers. Customer service According to the book "Discovery-Based Retail" customer service is the "sum of acts and elements that allow consumers to receive what they need or desire from your retail establishment." Retail Sales The Retail Sales report is published every month. It's a measure of the consumer spending, an important indicator of the US GDP. Retail fiRSs provide data on dollar value of their retail sales and inventories. 12000 fiRSs in the final survey and 5000 in the advanced one. The advanced estimated data is based on a sub sample from the US CB complete retail & food services sample.

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6.3 - CONSUMER
Consumer is a broad label for any individuals or households that use goods and services generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the teRS may vary. In economics and marketing Typically when business people and economists talk of consumers they are talking about person as consumer, an aggregated commodity item with little individuality other than that expressed in the buy/not-buy decision. However there is a trend in marketing to individualize the concept. Instead of generating broad demographic profiles and psycho-graphic profiles of market segments, marketers have started to engage in personalized marketing, peRSission marketing, and mass customization. There is increasing backlash from the public over use of the label "consumer" rather than "customer", with many finding it offensive and derogatory.

The consumer is the backbone of the American Retail Sales System. The consumer drives the economy by purchasing goods and services from vendors. In law and politics The law primarily uses the notion of "consumer" in relation to consumer protection laws, and the definition of consumer is often restricted to living persons (i.e. not corporations or businesses) and excludes commercial users. A typical legal rationale for protecting the consumer is based on the notion of policing market failures and inefficiencies, such as inequalities of bargaining power between a consumer and a business. As of all potential voters are also consumers, consumer protection takes on a clear political significance. Concern over the interests of consumers has also spawned much activism, as well as incorporation of consumer education into school curricula.There are also various nonprofit publications, such as Consumer Reports and Choice Magazine, dedicated to assist in consumer education and decision making, and Consumer Direct in the UK. In India, the Consumer Protection Act 1986 clearly differentiates a consumer as consuming a commodity or service either for his personal domestic use or to earn his livelihood. Only consumers are protected as per this act and any person, entity or organization purchasing a commodity for commercial reasons are exempted from any benefits of this act.FurtheRSore, Indian case law has quite a few references on how to distinguish a consumer from a customer. 217

CHAPTER 7: MARKETING STRATEGIES.

A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy. For example: "Use a low cost product to attract consumers. Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, higher-margin products and services that enhance the consumer's interaction with the low-cost product or service." A strategy consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. A marketing strategy often integrates an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. Similarly, the various strands of the strategy , which might include advertising, channel marketing, internet marketing, promotion and public relations can be orchestrated. Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group. Each one group is expected to take that strategy goal and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal measurable. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. A marketing strategy is a written plan which combines product development, promotion, distribution, and pricing approach, identifies the firm's marketing goals, and explains how they will be achieved within a stated timeframe. Marketing strategy determines the choice of target market segment, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. It is important to understand all of the variables that comprise the marketing mix, or the 4Ps of marketing: Product, Price, Place and Promotion. The 4Ps are the variables that marketers can control in order to best satisfy the customers in the target market17. First, the product is the physical product or the service offered to the consumer, which caninclude additional services or conveniences that are part of the offering. Marketers can adjust certain product characteristics such as the functionality, appearance, packaging, brand, quality and service. The second variable, price, reflects company considerations such as profit margin and competitor pricing, including discounts. Third, place refers to the decisions associated with channels of distribution that act as 218

a means of reaching the target consumers. This includes the channel members along the supply chain, market coverage and the various service levels.

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MARKETING MIX
The marketing mix includes the following Ps Alcoholic beverages market, especially beer market in India is growing with leaps and bounds. The beer market in India is estimated to be over Rupees 3000 corers. Annual consumption of beer is over hundred 10 million cases. CAGR of beer industry in the year 2008 is 14.3%, much higher than most of the countries. Rising income the Indian consumer, change in age profile and lifestyle as well as a reduction in beer prices are major factors pushing this growth. Traditional beer markets like Europe and USA are either flat or in a state of decline whereas consumption in the BRIC countries increased by almost 50% during 2002-2007. In India, beer sales grew at nearly 90% compared to, less than 60% growth for other alcoholic drinks and according to industry sources Indian beer market is expected to nearly double itself to 23.3 million hL by 2012 from 12.5 million hL at present. Another interesting fact is among non-Islamic countries India has the lowest per-capita consumption of beer.

For these reasons international beer companies are coming to India almost every quarter. Three big international brands Budweiser, Carlsberg and Heineken entered India in last 12-15 months. In February this year, Anheuser-Busch, makers of the legendary Budweiser, that calls itself the king of beers, announced its India entry through a 50:50 joint venture with the Hyderabad-based Crown Beers. Three months before that, Carlsberg, the beer brand for soccer fans, announcedoperations in India through its venture, South Asian Breweries. Last year, the Singapore-based Asia Pacific Breweries picked up a 76 per cent stake in Aurangabad Breweries, paving the way for the launch of Heineken into India. There are others like NRI entrepreneur Karan Bilimoria, who created waves in UKs Indian restaurants by marketing Cobra, a less-gassy beer, also eyeing the market. Even the

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big three brands have siblings. Apart from Heineken, Asia PacificBreweries (APB) sells Canon, Barons and Tiger; Crown Beers India unveiled Armstrong; while South Asia Breweries has introduced Pallone.But Indian beer market is highly saturated and difficult to break into. More than 80% of the market is controlled by the two players, UB and SAB Miller. While UB with brands like Kingfisher, Zingaro and Kalyani Black has a 48% market share, SABs bouquetof acquired brands- Haywards, Royal challenge, Knock Out and Fosters deliver a combined market share of 37%. According to market analysts international brands excepting Fosters have made little impression in India till date but according to these new entrants Indian beer market just started to evolve and has a huge growth potential. Till now the new entrants are looking at encashing equity with a premium pricing strategy and they cater to only 30% of the market- the mild beer segment. For remaining 70% market this players launched multiple new brands that are competitively priced. However some of the consultants are not confident about the success of this marketing mix since Indian scenario is widely different from other growing markets because of its immense and diversified geography, huge variety of social and cultural setup, differential tax regime across states, are to name a few. Taxes imposed on alcoholic beverages are very high which make the competition tougher for new entrants. Currently spirit manufacturers trying to push forward a policy change which will exempt beer (especially mild variety) from high alcoholic tax regime and accept it as normal refreshment beverage but in Indian socio-cultural and political scenario this proposal has only a few takers. Classification of beer: Lager: It is stored for a specified period before being bottled or canned. Pilsner: A type of lager beer, it is light with 3.0 3.8% alcohol and has a medium hop flavor. Ale: Top fermented, this kind of beer has distinct hop aroma. The alcohol content is around 4 5%. Stout: Dark with burnt flavor and strong malt aroma; it is heavily hopped and contains 5 6.5% alcohol. Porter: This is less dark than stout, even less hopped and is somewhat sweet. Alcohol content is around 5%. Creamy Ale: A highly carbonated beer that is produced by a combination of Ale and Lager. Malt: A strong flavored, high alcohol content beer that ranges in flavor and colors.

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Classification of Beer:
1. Lager: It is stored for a specified period before being bottled or canned. 2. Pilsner: A type of lager beer, it is light with 3.0 3.8% alcohol and has a medium hop flavor. 3. Ale: Top fermented, this kind of beer has distinct hop aroma. The alcohol content is around 4 5%. 4. Stout: Dark with burnt flavor and strong malt aroma; it is heavily hopped and contains 5 6.5% alcohol. 5. Porter: This is less dark than stout, even less hopped and is somewhat sweet. Alcohol content is around 5%. 6. Creamy Ale: A highly carbonated beer that is produced by a combination of Ale and Lager. 7. Malt: A strong flavored, high alcohol content beer that ranges in flavor and colors. Methodology: Due to lack of time and resources collection of primary data has not been done and the entire project depends on the secondary datas collected from different web pages, online research papers, etc.Analysis and others parts are done on the basis of these secondary data and knowledge collected from the marketing lectures and text books. Analysis: Marketing Mix Analysis: Kingfisher History: Parent company of Kingfisher, United breweries was established in 1857 with the name Castle breweries. It was renamed to United Breweries in 1915 and started manufacturing beer from the year 1944 under the label Exports Beer. UB group started exporting beer to Middle-East from 1974 and in the year 1978 it launched Kingfisher brand. Market Position: It is the largest selling brand in India and commands more than 30% share in the beer market. In 2005-2006 it recorded 28% growth. Target markets: Kingfisher has two different products for different market segments.

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Product:
1. 2. 3. 4. 5. No. 1 selling product in its segment. Good quality raw material is used to maintain the quality standards. Consistency of product quality is high. Always tastes fresh due to good quality and well developed distribution network. Hangover due to heavy consumption is very mild.

Place:
1. It is available throughout India, and is dominant particularly in South and West India. 2. UB has 16 company-owned breweries apart from nine contract breweries in 20 different locations across the country. 3. Kingfisher also has a presence in 60 countries. 4. Kingfisher also has an online marketing system. Any consumer can go to www.Kingfishernetshop.com and get their beer- a mini mum of six bottles home delivered. This move has been a big draw with info tech professionals and district women drinkers. 5. It also has some sixteen hundred shops apart from pubs and bars. Better retailing outlets are also to be opened under the Kingfisher Brand. 6. Kingfisher also has tie-ups with large department stores like Foodworld for retailing its Beers. 7. Kingfisher also has association with number of Very Classy, Up-market & Stylish bars & lounges which goes hand in hand with its brand image.

Price:
In both mild and strong beer segment Kingfisher uses competitive pricing strategy.

Promotion:
1. Kingfisher tagline King of good times is one of the most popular and most successful tagline in India. 2. Since advertising of liquor is banned in India, Kingfisher uses surrogate advertising methodslike using mineral water and sodas. 3. Aggressive advertising at Outlets & Pubs. 4. Recently it also started merchandizing sports goods and trendy clothing and accessories under Kingfisher brand name. 5. Each year Kingfisher brings out new calendars featuring top models in swimwear. 223

6. Kingfisher also promotes itself by sponsoring events like fashion shows, sportspersons like Narain Karthikeyan, East Bengal soccer team. UB promoter also acquired a Formula- One team (Force India). 7. Kingfisher also deals in sports merchandising starting with an ad featuring Sourav Ganguly and Ajay Jadeja in 1997. 8. With the launch of Kingfisher airlines combined promotion is possible which helps the brand promotion a lot. Kingfisher also ventured into other businesses with same brand name making the brand more visible and publicity easier. 9. Kingfisher recently tied up with NDTV for their new lifestyle channel NDTV Good Times for five years 10. And finally the Sultan himself, Dr. Vijay Mallya, the Big Daddy of all brands, the flamboyant Czar of the liquor industry who is the youth icon of a million hearts. His sole presence outweighs all other competitors taken together.

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Fosters
History:
Fosters was established by two brothers W M and R R Fosters in the year 1986. SAB Miller is the parent company which runs Fosters group, a premium global multi-beverage company delivering a total portfolio of beer, wine, spirits, and cider non-alcohol beverages. In the 70s Fosters started exporting to USA and UK and entered the Indian market in a 1998. Fosters is considered as a consumer driven brand. Market Position: Fosters belongs to the SAB Miller stable which is the second largest beer company in India, in terms of market share. Till now it is the only international beer brand which successfully captured a significant share in the Indian market. Target markets: The main target markets of Fosters in India youth. But targeting strategy of Fosters can be presented as

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Product:
1. Premium Lager beer 2. Fresh taste 3. Among the two sizes (330ml and 650ml) pint size (330ml) is more aggressively promoted and 4. 70% of Fosters sales today come from the pint-sized market 5. The product is a light beer highly carbonated with low bitterness and no aftertaste. It has fewer calories and lower alcohol content.

Price:
Fosters unlike Kingfisher follows a premium pricing strategy for its products. The prices of widely available Fosters product are

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Place:

1. SAB Miller has 10 breweries in nine and contract manufacturers in two other states. 2. Fosters has 24 distributors serving over 5,000 outlets, including over 2,300 outlets in Mumbai.

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General distribution structure of Fosters is shown here-

Promotion: 1. Australian is the essence of Fosters brand image is promoted in every market in the world. All Fosters lager theme advertising is consistent with an Australian positioning 2. The overseas advertising of the product often focuses upon the Australian connotations of the beer, e.g. with reference to stereotypical Australian imagery such as kangaroos, exaggerated accents, and hats with corks on strings 3. Since direct promotion is banned in India Fosters use surrogate advertising method using mineral water of the same brand name 4. Fosters promoted its brand by sponsoring various sports like cricket, to enter the Indian market. Afterwards it withdrew from cricket and started promoting sports like football, rugby, motorsport etc. 5. Fosters is deeply committed to promoting responsible consumption. 6. While Fosters does not provide medical advice, nor attempt to advise individuals on important and complex medical issues, the Company is committed to ensuring that consumers access the best available information regarding alcohol and their health. 7. Steeping into Men Fashion apparels collections for better brand visibility.

Brand repositioning of Indian brand in presence of international brand: The term positioning is widely used within the marketing and advertising communities today. Positioning is often used nowadays as a broad synonym for marketing strategy. Positioning should be thought of as an element of strategy, a component of strategy, not as the strategy itself. The term positioning is, and should be, intimately connected to the concept of target market. That is, a brand positioning defines the target audience. The correct positioning of a brand is basic and fundamental to its success; an incorrect or suboptimal positioning can doom a brand to underperformance or failure. Kingfisher, since its origin proved to be the marketing savvy brand. Even though it was the largest selling beer brand, but when Fosters entered the Indian market, Kingfisher sniffed possible competition and invested heavily in brand visibility and positioning. During 2003-04 Kingfisher again repositioned itself by changing the logo.

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Instead of the sitting kingfisher bird, the picture of a flying kingfisher was used during creation of new logo because the company wanted to promote itself as an asp rational brand which always wants to go high. This change was made mainly to maintain the distinctive positioning and to create a stronger emotional bond with the aspiring Indian youth. This repositioning was so successful that even today Kingfisher uses this logo. After the entry of international brand Fosters, Kingfisher repositioned itself into a lifestyle brand adopting jingles like ola la le lo and tagline King of good times. Kingfisher tried to position itself as a brand for the successful and professional individuals who are always ready to take a break, have a party or just chill out. This positioning was promoted using Indian cricketers such as Ajay Jadeja and Sourav Ganguly, West Indies cricket team (At that time Kingfisher was the official sponsor of WI cricket team) and various other means. The notable thing during this repositioning process is that during this process Kingfisher kept the original message of the brand intact while adopting strategies (including advertising, logo designing, etc.) to communicate better with the consumers and to create a stronger emotional bond with them. The strategies of Kingfisher paid off well and as a result Kingfisher maintained the leadership position and added more dimensions into the brand making it stronger than before.

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BRAND EXTENSION: Kingfisher is one of the most recognized brand in India and SAB Miller fosters has also positioned itself as a unique brand so extension of both brands is possible without much hassle.

KINGFISHER: Kingfisher is widely known among large number of consumers and its brand presence increased after diversification into airlines business. Kingfisher brand can be extended in following ways-

Line Extension:Ultra Premium Beer: Though Kingfisher has a huge presence in both light and strong beer segment but from the beginning it followed strategic pricing policy and that made the brand very popular. But with the increasing income level of the Indian youth and the entry of international spirit majors like Carlsberg, Budweiser, etc. Kingfisher should introduce a high-priced premium beer that would compete against these brands effectively. In this way the company could extend its customer base and their strategy would also help the company to tap the high income aspiration group and since company could apply skimming the cream policy for this segment, it could be assumed that revenue generation would be high enough to maintain profitability. This move may also help the company if it wants to transform itself into a legendary brand not only in India but also across the globe.

Category extension:Energy drinks: Kingfisher always maintained itself as a lifestyle brand and associated the brand image with the youth. With the increasing per-capita income and western is nation of the Indian society, people are getting ready to spend more and more. On the other hand they are more conscious about health issues. Energy drinks are very popular in Western countries and some of them also entered into the Indian market but they failed to make an impact. If a company like Kingfisher with huge brand popularity and strong self and distribution network introduce energy drinks it could be a success. It will also go hand in hand with the current image of the brand. Film production and distribution: Every year Indian film industry release a lot of movies and it is the largest film industry in the world considering the number of release per year. Still in India same production and distribution has not reached professional level. Only a few 230

companies at present do things in a methodical way. But international production majors are entering in the Indian cinema space and Indian multinationals are also taking interest in this field. Kingfisher as a lifestyle brand always maintained a close relationship with the film fraternity and also has a presence in the television space in a joint venture with NDTV. So it would be a natural extension for the brand to start a movie and television production house. With this move Kingfisher would bring in its corporate expertise and financial muscle. This will also help the brand to increase the brand visibility. And just like Adlabs Kingfisher will have the opportunity to create its own multiplex chain and it will also help the current lifestyle apparels and accessories business a lot. Apparels and accessories retailing: Even though Kingfisher is already present in the apparel and accessories space but its presence is very limited. According to industry estimates organised retailing is the next big thing. In this scenario Kingfisher could easily use its huge brand presence and popularity by investing more into theapparel and accessories retailing. In this way Kingfisher could transform itself into a complete lifestyle brand and that would open new horizons for the brand.

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FOSTERS:Fosters always maintained its Australian identity throughout the ups and downs of the spirit industry. It is the only well-known international spirit brand in India and Fosters can use this very easily to extend the brand

Line extension:Low-price beer: From the beginning Fosters maintained high pricing strategy and that helped the brand to grow. Now since the brand is already popular they could introduce a localized version of the brand in lower price. That would help Fosters (SAB Miller) to strengthen its market presence and to compete against Kingfisher. This new brand will be a unique mixture of Australian characteristics of Fosters and local characteristics and the target segment will be the Indian youth with low disposable income. Using the current infrastructure and distribution network, SAB Miller would make the process easy and less costly and that would increase the profitability of success.

Category extension:Sports merchandising: Fosters always maintained its position as the Australian brand and Australia is a multisport country where most of the sports are very popular and as the country Australia is very successful in these sports. Fosters previously maintained its relationship with cricket and other sports and is now also responsible for different sporting events. So they could use this to enter sports merchandising business in India using cricket as the entry point and then extending into other sports. They could also use the Australian image to relate the sporting fraternity of India and Australia and by this way they could popularise the currently unpopular sports like boxing, shooting, etc. If this strategy could be implemented properly it would make Fosters unique and give the brand a head-start.

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7.1 - PRODUCT

PRODUCT LEVELS
There are 5 product levels which coincide with 5 different needs of the Customers like stated, unstated, delight, Real and Secret Needs. All the various needs may not be fulfilled by the same product. But eventually all the needs are covered with the following Product level.

Core Product

Destination - Maurtitius Main aim where He want to reach or go Ticket Booking Hotel Booking, Sight Seeing Authentic Information, Information of packages Different Information Leading to destination Differentiation Strategy Laptop & Wi-fi Connectivity Future Expansion Different Island for Business House

Basuc Product

Epected Product

Augmented product

Potential Product

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7.2 - PRICE
In pricing decisions, the product or the service mix of the organization is important. The company has to set prices in line with the quality of services to be made available to the customers and the type of customers we are targeting. Pricing decisions are influenced by internal factors like pricing policy of the company, and external factors like the destination itself. The company is required to think about discount decision. For example include discounts for cash payments, seasonal discounts, trade discounts etc. But while offering the discounts, it is not to be forgotten that it may also create image problem since some of the value sensitive tourists may doubt the quality.

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7.3 - PLACE
A company would sell their products or services through travel agents like in case of tourism industry a company can offer its services through agents like Cox & Kings, Travelguru etc. At times a company would like to deal directly with the consumers and eliminate middlemen. Hence strategic locations are very important for a business. A company may also utilize more than one method of distribution. The main goal of place is to deliver right quantity at the right place and at a right time.

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7.4 - PROMOTION
Creation of awareness has a far-reaching impact. A company bear the responsibility of informing, persuading and sensing the potential tourists in a right fashion. Promotion helps in maximizing the duration of stay, frequency of visit by offering new tourist products in the same country to areas, which have remained untapped or partially tapped. The various dimensions of promotion are as follows:

Adversiting Publicity Word of Mouth Sales Promotion Personal Selling Telemarketing Exhibition

Wide Coverage. Vital Awareness Visual Exposure- Photos - Newspaper, Magazine, TV Ads

Focus on Public Relation Media - a main Source like Magazine

Word of Recommendation, Testimonials Hidden Sales Force High Credibility - Seek Opinion Leaders

Short-term activity - Mainly for Price-Sensitive Cust Give-away for Clients - Dry-Fruits for VIP Travel agents - info carriers Even Staff is called in Personal selling

Professionally Qualified person - Outsourced Based on no of Converts- Potential to Actual User

Joint Exhibition with Mauritian Govt. Aggresive Promotion Campaign

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EXTENDED 3 PS OF MARKETING PROCESS:It is the way of undertaking transaction supplying information and providing services on a way, which is acceptable to the consumer and the effective to the organization. Now to make this definition of process true, it is necessary for the organization which provides services to recognize the critical moments in the entire process which makes the service acceptable or not acceptable to the customer depending on the zone of tolerance and effective or not effective to the organization. Further to realize what are the critical moments in the considered process a concept of blue are printing is introduced.

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PEOPLE:Every industry or business depends substantially on management of human resources. The aviation industry is an amalgam of the services of a lot of people and hence this industry cannot work efficiently if the cabin crew, travel agents, tour operators lack world class professional excellence. The cabin crew need professional excellence since the projection of a positive image regarding a destination in particular requires their due cooperation, failing which even the world class services offered by the airline companies are found meaningless. The tour operators also need to manage human resources efficiently. In the management of people, the related organizations are required to think in favor of developing an ongoing training program so that we find a close relation between the development of technologies and the quality of personnel who are supposed to operate and maintain the same. They need a lot of credentials to fulfill the expectations of the customers. The organization has to make the environmental conditions conducive and focus has to be laid on the incentives to the employees for energizing the process of performance orientation. Employee orientation requires due weight age to efficiency generation, value-orientation and perfection. The Government plays an important role in providing the right kind of people for this industry. As such there are a lot of Govt. and Pvt. Institutes which offer training for the same. The training courses run by the Institutes are designed to suit the needs of the various target groups.

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PEOPLE in marketing include: EMPLOYEES OTHER CUSTOMERS EMPLOYEES They are the representatives of the company. Their performance can create a positive as well as negative impact of the service process and the image of the company. Keeping people factor healthy is one of the prime concerns of the company. When we talk about people in travel and tourism industry, they are really crucial part as at every stage they play a role of the service provider on the stage of service encounter also known as moment of truth. SERVICE ENCONTER The so-called stage service encounter or moment of truth is the element of interaction between those providing services and the customers. The instances of service encounter in travel and tourism industry are In the ticket booking process when the customer calls the service provider that is the front line staff in order to book the tickets is the first service encounter incidence. Its the moment of truth where, there is one to one interaction between the service provider who is booking the ticket and the customer who wants the ticket booked. This interaction takes place on the phone. In the itinerary planning process the service encounter takes place when the customer visits the travel and tourism agency to purchase a holiday package and meets the travel manager. When the customer is experiencing the holiday package there are numerous service encounters that he goes through and one of them is his constant interaction with the tourist guides. These were some examples of service encounter. This stage is a very crucial one where in the provider has to perform at the optimum level in order to avoid the customer from having the experience of credence quality.

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CREDENCE QUALITY It is the quality, which is difficult to evaluate, and when you ask the customer the question on how was the service? He usually gives vague answers like it was ok, I dont know. A very important concept in people is the service profit chain. In the service profit chain the first step is to keep the internal customers happy and satisfied the internal customer being the employees. To keep them following point have to be taken care of Work place design Job design Employee selection and development Employees rewards and recognition Tools for serving customers. These aspects in turn lead to employee satisfaction, which would result in to employee retention and productivity, this would result in providing value services and that would yield customer satisfaction. This would lead to customer loyalty and finally revenue growth and profitability through referral and repeat business.

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PHYSICAL EVIDENCE:It is a very important factor for service industry. This marketing p is important in 2 distinct ways: 1) As the environment in which the sales takes place. 2) The environment where the product is consumed. Explanation of the first case: When the purchasing of the product is taking place, the customer cannot be sure whether they will enjoy the product or not. In the mean time their expectations and emotions are influenced by factors like layout of the room, the furniture, noise level, temperature, lights and other factors like the brochure of the company. In case of customers who by electronically the appearance of the website is the physical evidence Explanation of the second case: In the service industry where the product is being experienced it is particularly important in securing repeat business thus extensive facilities that prove to be physical evidence are provided to lure and woo the customer The tangibles include flat beds in business class, Wi-Fi connection in hotels, customized meals on board, tele checking, 8hrs booking in hotels, hotels providing laptops on request, internet access as complimentary for the corporate packages.

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7.5 - DIFFERENT SEASONAL OFFERS

Various seasonal offers are provided by the liquor industries. But most important of the offers are the seasonal offers. These offers are given so that the company continues to place its product effectively in the market. For example different beer companies give rebate in its price during the winter season. This happen as because during winter the sale of beer decreases so the liquor companies have to reduce its price for the sale of the products. Moreover during the different festival season the reduction in the price of the liquor product is given. This is as because to retain a good sale in the festive season. During the festivals people wishes to enjoy drinks. So they are eager to buy more liquor. So the liquor companies reduce the price to maintain the continuous high market capture and sale of the liquor products. Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. So offers are the part of marketing strategy.

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CHAPTER 8: FINANCIAL ASPECT

8.1 CORPORATE GOVERNANCE.

1. COMPANY'S PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE Company firmly believes in good Corporate Governance for effective management and control of business over a sustained period of time. The above philosophy along with Code of Conduct, adoption of high ethical standards, governs the Company and its employees in all corporate activities. 2. BOARD OF DIRECTORS a) Composition of the Board The Board of Directors comprises Non-Executive Chairman, Managing Director and seven Non- Executive Directors of whom five are independent as defined by Clause 49 of the Listing Agreement. This ensures a good blend of Executive, Non Executive and Independent Directors and achieves the desired level of independence of the Board. All Non-Executive Directors bring in a wide range of expertise and experience to the Board.

The information provided above pertains to the following committees in accordance with the provisions of Clause 49 of the Listing Agreement: 1. Audit Committee 2. Investors' / Shareholders' Grievances Committee 3. Remuneration / Compensation Committee (Non mandatory) b) Particulars Of Directors Seeking Appointment / Re-Appointment The brief particulars of the Directors of the Company, retiring by rotation and proposed to be appointed at the ensuing Annual General Meeting are annexed to the Notice. 3. AUDIT COMMITTEE The Audit Committee comprises of four Non Executive Directors of whom three are Independent. The present members of the Committee are Mr. N. Srinivasan (Chairman), Mr. A. Harish Bhat, Mr. K. K. Rai and Mr. B.Viswanath. The powers of the Audit Committee are as mentioned in Clause 49(II) [c] and [d] of the Listing Agreement and Section 292A of the Companies Act, 1956. The terms of reference of this Committee are wide enough to cover the matters specified for Audit Committees under the Listing Agreement. The Committee acts as a link between the management, the Statutory and the Internal Auditors on one side and the Board of Directors of the Company on the other side and oversees the financial reporting process.

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The Chief Financial Officer, Managing Director of the company, Chief Financial Officer of UB Group and the Group Internal Auditors are permanent invitees. The Statutory Auditors, other directors / Chairman are also invited to attend the meetings. The Company Secretary acts as the Secretary of the Committee. During the financial year, six meetings of the Audit Committee were held on April 30, 2010, June 24, 2010, July 29, 2010, October 29, 2010, February 4, 2011 and March 7, 2011. The Audit Committee, inter alia, has reviewed the financial statements including Auditors' Report for the year ended March 31, 2011 and has recommended its adoption. In addition, the Committee has also reviewed quarterly results for June 30, 2010, quarterly and half yearly results for September 30, 2010 and quarterly results for December 31, 2010 which were subjected to a Limited Review by the Statutory Auditors of the Company. 4. REMUNERATION / COMPENSATION COMMITTEE (Non mandatory) The Remuneration / Compensation Committee of the Board formulates and recommends to the Board, from time to time, the compensation structure for Whole time Members of the Board and to set guidelines for salary, performance pay and perquisites to other senior employees from the level of Vice President and above. Composition of Remuneration Committee * The Committee was reconstituted on June 24, 2010 with appointment of Mr.B.Viswanath as a member of the Committee in place of Mr.Sudhir Goyal. During the financial year, one meeting was held on June 24, 2010, which was attended by all the members of the Committee. Name Designation Category Mr. N. Srinivasan Chairman Non-Executive - Independent Mr.B.Viswanath Member Non-Executive - Independent Remuneration to Directors The details of Remuneration paid to Directors / Executive Directors / Managing Directors during the financial year 2010-2011 are given below: Name of the Director Salary and allowances Contribution to Provident Fund Perquisites Mr.J.K.Sardana, Managing 3.67 0.20 0.04 Director (Rs. Million) b) Non-Executive Directors Sitting fees are paid to Non-Executive Directors for attending Board / Committee meetings. They are also entitled to reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred for attending such meetings. The Non-Executive Directors are not entitled to any other remuneration except Sitting Fees. The details of Sitting Fees paid during the year are as under:

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5. SHAREHOLDERS' / INVESTORS' GRIEVANCES COMMITTEE A Shareholders' / Investors' Grievances Committee was constituted on June 24, 2010 to operate in terms of the provisions related thereto in the Listing Agreements with the Stock Exchanges and / or the provisions as prescribed or as may be prescribed in this regard by the Companies Act, 1956. The Members of the Committee are Mr. A. Harish Bhat (Chairman), Mr. B. Viswanath and Mr. B. N. Rath. During the year under review, five meetings were held on April 30, 2010, June 24, 2010, July 30, 2010, October 29, 2010 and February 4, 2011. The Company/Company's Registrars received 4 complaints during the financial year, all of which were resolved to the satisfaction of shareholders/ investors. There are no complaints or Transfer of shares pending as on March 31, 2011. The Company also has Committee of Directors with authority delegated by the Board inter-alia to approve share transfer, transmission, issue of duplicate shares and routine bank account operations etc. COMPLIANCE OFFICER The Company's Secretarial Department is responsible for ensuring compliance with all applicable laws. The Secretarial Department is headed by Mr. V. M. Pendse, Company Secretary and Compliance Officer, who is responsible for ensuring compliance of the Companies Act, SEBI Regulations and allied laws. 6. DISCLOSURES Related Party Transactions Transactions with related parties as per the requirements of Accounting Standards 18 issued by The Institute of Chartered Accountants of India are disclosed in the relevant Schedule of Notes to Accounts. Internal Control & Risk Assessment The Company has laid down the procedure for risk assessment and minimization, which are periodically reviewed to ensure management control. Details of Non Compliance The Company has complied with all the statutory requirements comprised in the Listing Agreements / Regulations / Guidelines / Rules of the Stock Exchanges / SEBI / Other statutory authorities. There were no instances of non compliance by the Company nor have any penalties, strictures been imposed on the Company by Stock Exchange or SEBI or any Statutory Authority, on any matter related to capital market during last 3 years. Code of Conduct In compliance with Clause 49 of the Listing Agreement with Stock Exchanges, the Company has adopted a Code of Business Conduct and Ethics for its Board members and Senior Management personnel, a copy of which is available at the Company's website www.ubengineering.com. Affirmations regarding compliance with the Code of Conduct had been obtained from all Board members and Senior Management Personnel of the Company. As required, a declaration duly signed by the Managing Director to that effect is forming part of this report. Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, the Company has adopted a "Code of Conduct for Prevention of Insider Trading". The Company has updated the 245

Code as per the requirements of SEBI and is applicable to all Directors and designated employees. The Code ensures prevention of dealing in shares by persons having access to unpublished price sensitive information.

7. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report is appended and forms an integral part of this Annual Report. 8. GENERAL SHAREHOLDER INFORMATION The particulars of the 40th Annual General Meeting for the year ended March 31, 2011 are as under:

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8.2 CODE OF CONDUCT

1) Directors/officers/designated employees of UBHL shall maintain the confidentiality of all Price Sensitive Information. If they are circulating it on a need to know basis then they should send the same in a sealed envelope super scribed Private, Privileged and Confidential Information Envelope to be opened by addressee only. 2) Directors/officers/designated employees of UBHL shall not pass on such information to any person directly or indirectly by way of making a recommendation for the purchase or sale of securities. 3) Heads of Department should disclose Price Sensitive Information only to those within UBHL who need the information to discharge their duty and whose possession of such information will not give rise to a conflict of interest or appearance of misuse of the information. 4) Directors/officers/designated employees of UBHL receiving any non-public information should immediately report the same to the Head of their Department/ Compliance Officer. 5) Directors/officers/designated employees of UBHL in possession of confidential information should ensure that the relevant files are kept secure and under lock and key. Computer files must have adequate security of login, password etc. Information sent/received through electronic media should be marked Confidential Information at the top of the information sent/received. 6) Directors/officers/designated employees shall not participate in any transaction involving the purchase or sale of securities of UBHL and/or UBL and/or USL during the periods when trading window is closed as referred to in point 4 above or during any other period as may be specified from time to time. 7) In case of specific transactions such as merger/ amalgamation/takeover etc. it will be the responsibility of the Leader of the Task Force to ensure that no member of the Task Force divulges any unpublished price sensitive information to anyone and does not trade on the basis of information available with him. The Leader of the Task Force has to take written oath regarding the same from each member of the Task Force. 8) In case of ESOPs, Directors/officers/designated employees of UBHL may exercise options when the trading window is closed.

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The following are the amendments approved by the Board of Directors on June 30, 2003: 1. Clause ix) substituted by new clause ix). The earlier Clause ix) read as under: a concern, firm, trust, Hindu Undivided Family, Company Association of persons wherein the relatives of the persons mentioned in sub-clauses (vi), (vii) and (vii) has more than 10 percent of the holding or interest. 2. The words (Regulation 3A) of SEBI (Prohibition of Insider Trading) Regulations, 1992 - inserted as sub-heading 3. New paragraph with sub-heading - inserted. 4. The words Kingfisher Properties & Holdings Limited and (KPHL) wherever they occur substituted by the words United Breweries (Holdings) Limited and (UBHL). 5. Clause 2c substituted by new Clause 2c. The earlier Clause 2c read as under: Dealing in securities means buying and/or selling and/or subscribing to and/or exercising options in securities of UBHL and/or UBL and/or USL. 6. Sub clause (i), (iii), (iv) and (vii) of Clause 3c substituted by new sub clauses i, iii, iv and vii. The earlier clauses read as under: i) All employees in the Corporate Finance Department in Head Office (together with their dependants) iii) All employees of the Accounts Department in Head Office (together with their dependants) iv) All employees of Group Internal Audit (together with their dependants) vii) All employees of UBHL in Corporate Affairs Department (together with their dependants). 7. First paragraph substituted by new paragraph. The earlier paragraph read as under: The trading window of UBHL in respect of unaudited quarterly results shall close on the 1st of the month following the respective quarter and shall open on the 6th of the ensuing month. For example, in respect of unaudited results for the quarter ending 31st March, the trading window shall be closed between 1st April and 5th May and shall re-open on 6th May. No separate intimation shall be given regarding the opening and closing of the trading window of UBHL in respect of unaudited quarterly results. Directors/ officers/ designated employees and/or their dependants cannot trade in the securities of UBHL during this period. 8. The second sentence starting with the words To clarify and ending with the words trading window substituted by new sentence. The earlier sentence read as under: To clarify, Directors/ officers/designated employees of UBHL either by themselves or with/through their dependants can buy/subscribe upto 5000 nos. each of each type of security of UBHL, UBL and USL and sell upto 5000 nos. each of each type of 248

security of UBHL, UBL and USL in a financial year without pre-clearance, during a valid trading window period. 9. The numbers 5000 and 2% substituted by the numbers 25000 and 1%. 10. The words within 7 days i.e. before October 7th and before April 7th substituted by the words on or before October 15th and before April 15th. The following are the amendments approved by the Board of Directors on December 26, 2008 11. New paragraph with sub-heading - inserted in terms of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 notification dated November 19, 2008.

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CODE OF BUSINESS CONDUCT AND ETHICS Introduction

The Board of Directors (the Board) of United Breweries Limited (the Company) has adopted the following Code of Business Conduct and Ethics (the Code) for directors of the Company (Directors) and all employees of the rank of VicePresident and above (Covered Employees). The Board of Directors has the right to expand/amend the extent and coverage of employees under this Code. The Company is committed to ethical and lawful business conduct and perceives it as critical to the Companys success. The Company will uphold ethical and legal standards while pursuing its objectives. Consistent with these principles, the Companys Board has adopted the Code for compliance both in letter and spirit by all Directors and Covered Employees. While it is not possible to anticipate every situation or circumstance that may arise, the Code is intended to serve as a broad guide. The Board reserves the right to amend, alter or terminate the Code at any time and for any reason, subject to applicable law. Directors/Covered Employees who violate/deviate from the requirements of the Code will attract disciplinary action which may include termination of office /employment. In performing their functions, Directors and Covered Employees will: Act with integrity, probity, honesty, transparency and with utmost good faith. Actively assist in implementing the Companys Objectives and creating an organization that is responsive, positive and driven by business and social needs. (1) Compliance with Laws, Rules and Regulations All Directors and Covered Employees must respect and obey all the applicable laws of the countries in which the Company operates. Violations of laws, rules and regulations may subject Directors/Covered Employees to individual criminal or civil liability, in addition to disciplinary action by the Company, apart from subjecting the Company to liability and/or loss of business. (2) Conflicts of Interest A conflict of interest exists when personal interest interferes in any way with the interests of the Company. As a general rule, Directors/Covered Employees should avoid actual or apparent conflicts of interest between their personal and professional relationships. A situation of conflict of interest arises when a Director/Covered Employee has interests that may make it difficult to perform his or her company work objectively and effectively. Another example of situation of conflict of interest is when a Director/Covered Employee or members of his or

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8.3 QUARTERLY FINANCIALS

Unaudited Financial Results for the period ended December 31, 2011
1. The Company is engaged in manufacture, purchase and sale of Beer including licensing of brands, which constitutes a single business segment. The Company also considers the whole of India as a single geographical segment. 2. Exchange difference represents loss / (gain) on liability restated at the exchange rates as at the end of the respective periods on the foreign currency loan availed by the Company. The working capital facility availed by the Company was repaid in entirety during the quarter ended June 30, 2010 by booking a gain of Rs.4 Lakhs on settlement of the facility. The Rs.126 Lakhs exchange loss arising for the nine month period ending December 31, 2011 is on account of repayment of a foreign currency term loan in the erstwhile United Millennium Breweries Limited (UMBL) which merged into the Company during the quarter ended December 2011. 3. The Companys investment in Maltex Malsters Private Limited is long term and strategic in nature. The diminution in book value of this investment is only temporary in nature and further the Company has also obtained an independent valuation in respect of these investments, which is in excess of the book value, and hence no provision for diminution is considered necessary. 4. Regarding amalgamations undertaken by your Company: a) The Scheme of Amalgamation (Scheme) for amalgamating Associated Breweries & Distilleries Limited (ABDL), Millennium Alcobev Private Limited (MAPL) and Empee Breweries Limited (EBL) with the Company has been made effective. b) The Schemes for amalgamation of Millennium Beer Industries Limited (MBIL) and United Millennium Breweries Limited (UMBL) with United Breweries Limited have been approved by Board for Industrial & Financial Reconstruction (BIFR) on November 11, 2011 and November 21, 2011 respectively. Upon necessary filing with the Registrar of Companies, the Schemes have become effective on November 16, 2011 and November 21, 2011 respectively. The appointed dates of the Schemes are April 1, 2010. c) The Schemes for amalgamation of UB Nizam Breweries Private Limited (UBN) and Chennai Breweries Private Limited (CBPL) with the Company have been approved by the High Court of Karnataka and Madras. Upon necessary filing with the Registrar of Companies, the scheme has become effective on November 8, 2011 and November 12, 2011 respectively. The appointed date of the Scheme is April 1, 2010 for UBN, whereas for CBPL it is close of business hours as on March 31, 2011.

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d) Consequent to the various mergers as detailed in (a), (b) and (c) above: i.) The figures for the quarter and nine month ended December 31, 2011 includes the nine months results of MBIL, UMBL, UBN and CBPL. ii.) The purchases of traded goods from MBIL until September 30, 2011 have been reversed during the quarter ended December 31, 2011. iii.) In view of the above, the figures for the quarter and nine month ended December 31, 2011 are not comparable with those of corresponding periods of the previous year and also for the immediately preceding quarter. e) The Scheme for amalgamation of UB Ajanta Breweries Private Limited with the Company is filed with the Board for Industrial & Financial Reconstruction (BIFR) and is pending for approval. The appointed date of the Scheme is April 1, 2011. f) Arising out of the Amalgamation of EBL into UBL, UBL Benefit Trust held 60,07,413 equity shares in UBL constituting 2.36% of UBLs paid up equity capital. The Trust has sold its entire shareholding and remitted the entire proceeds aggregating Rs.28,357 Lakhs to UBL. The entire proceeds have been utilized towards reducing the Debt of the Company. The gain on sale of these shares aggregating to Rs. 14,050 lakhs has been credited to the General Reserve. g) Arising out of amalgamation of UBN, CBPL and MBIL, 91,50,633 equity shares of Re.1 each has been allotted and these shares have been listed. 5. The Company had entered into an agreement with the promoters of Balaji Distilleries Limited (BDL) with a view to securing perpetual usage of its brewery and grant of first right of refusal in case of sale or disposal of its brewery unit in any manner by BDL, towards which the Company had made a refundable facility advance of Rs.15,500 Lakhs to Star Investments Private Ltd. (Star), one of the Promoter Companies of BDL, acting for itself and on behalf of the other Promoters. Subsequently, BDL filed a scheme of arrangement for amalgamation of its distillery into United Spirits Limited (USL) and de-merger of its brewery into Chennai Breweries Private Limited (CBPL) and the said Scheme was approved by Appellate Authority for Industrial & Financial Reconstruction in November 2010.The Brewery assets proposed to be acquired by the Company from the Promoters of BDL eventually vested in CBPL which was a 100% subsidiary of USL. . A Scheme for Amalgamation of CBPL into the Company was then filed. Upon amalgamation of CBPL into the Company, USL has been allotted equity shares in terms of the approved Scheme. However, the advance still remains to be repaid. Therefore, the Company has entered into a new agreement extending the repayment of principal and interest outstanding till March 2012, and obtained a pledge of securities from associate companies of Star to secure the outstanding amounts. The aggregate amount due is Rs.23,412 Lakhs as on December 31,2011. 6. Investor complaints pending as on October 1, 2011 were Nil. During the quarter ended December 31, 2011, Eleven (11) Complaints were received and disposed, and there were no complaints unresolved as on that date.

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7. The Company has paid a dividend of Rs. 3/- per Cumulative Redeemable Preference Share amounting to Rs. 861 Lakhs (inclusive of Dividend Distribution Tax) for the year ended March 31, 2011 to Scottish & Newcastle India Limited. The Company has paid a Dividend of Rs.0.60 per Equity Share amounting to Rs. 1,839 Lakhs (inclusive of Dividend Distribution Tax) for the year ended March 31, 2011.

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8.4 ANNUAL REPORT

Auditors' Report to the Members of United Spirits Limited
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets. (b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year. 2. (a) The inventory, excluding stocks held by a wholly owned subsidiary in respect of which physical verification is not feasible because of the nature of business of the Company, has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable. (b) In our opinion, read with our remarks in paragraph 2(a), procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material. 3. (a) The Company has granted unsecured loans, to a Company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 2,796.086 Million and Rs. Nil, respectively. (b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company. (c) In respect of the aforesaid loans, the parties are repaying the principal amounts as stipulated and are also regular in payment of interest, where applicable. (d) In respect of the aforesaid loans, there is no overdue amount more then Rupees One Lakh.

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(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. 5. (a) In our opinion and according to the informationand explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. 6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits. 7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. 8. The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company. 9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable, with the appropriate authorities. (b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess as at March 31, 2011 which have not been deposited on account of a dispute are given in Appendix 1.

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10. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. 11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date. 12. In our opinion, the Company has maintained adequate documents and records in the cases where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund/ societies are not applicable to the Company. 14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. 15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the Company. 16. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained. 17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long-term investment. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. 19. The Company has not issued debentures during the year and there are no debentures outstanding as at year end. 20. The Company has not raised any money by public issues during the year. 21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

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Auditors' Report to the Members of United Breweries Limited

1. We have audited the attached Balance Sheet of United Breweries Limited (the Company) as at March 31, 2011 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the Order), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 4. We did not audit the financial statements of erstwhile Chennai Breweries Private Limited and UB Nizam Breweries Private Limited (the Transferor Companies), included in the financial statements pursuant to amalgamation with the Company (refer Schedule 19 Note 5), which constitute total assets of Rs.2,837,922 thousands and net assets of Rs.1,143,150 thousands as at March 31, 2011, total revenue of Rs.491,093 thousands and net loss of Rs.175,173 thousands for the year then ended. The financial statements and other financial information of the Transferor Companies have been audited by other auditors whose reports have been furnished to us, and our opinion on the financial statements to the extent they have been derived from such financial statements is based solely on the report of such other auditors. 5. Without qualifying our opinion, we draw your attention to the following matters, for which no specific accounting treatment has been prescribed in the Accounting Standards notified pursuant to the Companies (Accounting Standards) Rules, 2006 as per Section 211(3C) of the Companies Act, 1956: (a) Note 5(A)(iii)(b) on Schedule 19 regarding the disclosure of the equity shares in the Company issued by the Company to UBL Benefit Trust; of which the Company is the sole beneficiary, as Interest in UBL Benefit Trust in the Balance Sheet as at March 31, 2011, and upon sale of those shares subsequent to the Balance Sheet date the disclosure of the resultant gains as adjustment to General Reserves (during the quarter ended September 30, 2011); and 260

(b) Note 5 on Schedule 19 regarding the set off of debit balance in general reserve with the credit balance in capital reserve aggregating to Rs.2,156,553 thousands arising due to various amalgamations with the Company. 6. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; (e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; (f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

261

Auditors' Report to the Members of United Breweries (Holdings) Limited Group

1. We have audited the attached Consolidated Balance Sheet of United Breweries (Holdings) Limited Group, as at 31st March 2011, and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the United Breweries (Holdings) Limiteds management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of Rs. 106,372.339 million as at 31st March 2011, total revenues of Rs. 65,974.742 million and net cash out flows amounting to Rs. 951.271 million for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of such other auditors. 4. The auditors of a subsidiary company have drawn attention of the members to; (a) note 10(b) of schedule 12 regarding recognition of deferred tax asset and reported that in view of Explanation 1 to Paragraph 17 of Accounting Standard 22, they cannot express any independent opinion in the matter of recognition of deferred tax asset of Rs. 4,934.180 million (net) for the year and total deferred tax asset of Rs.29,277.831 million as at 31-03-2011. (b) note 14 of schedule 12 regarding method of accounting of costs incurred on major repairs and maintenance of engines of aircraft taken on operating lease during the year aggregating to Rs. 1,225.685 million which have been included under fixed assets and amortised over the estimated useful life of the repairs. In the opinion of the auditors of the subsidiary company, this accounting treatment is not in accordance with current accounting standards. (c) note 15 of schedule 12 regarding treatment of use fee payable by the subsidiary company in respect of certain assets taken on operating lease and aggregating to Rs. 557.645 million as maintenance reserves, in accordance with its understanding. Pending formalization of the matter with the relevant lessors, the auditors of the subsidiary company have expressed their inability to express an independent opinion in the matter. 262

5. The financial statements of certain associate companies mentioned in Sl No. 2 of schedule 11 have not been considered in the Consolidated Financial Statements for the reasons stated against their names. 6. The financial statements of certain associate companies, which reflect the groups share of profit (net) for the year of Rs. 1,755.493 million have been audited by other auditors and we have relied upon such audited financial statements for the purpose of our examination of the Consolidated Financial Statements. 7. Subject to our comments in paragraphs `4 and 5 above, we report that the consolidated financial statements have been prepared by the United Breweries (Holdings) Limiteds management in accordance with the requirements of Accounting Standard (AS) 21 Consolidated Financial Statements and Accounting Standard (AS) 23 Accounting for Investments in Associates in Consolidated Financial Statements specified in the Companies (Accounting Standards) Rule, 2006. 8. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, and subject to our observations in paragraphs 4 and 5 above, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Consolidated Balance Sheet, of the state of affairs of the United Breweries (Holdings) Limited Group as at 31st March 2011; (b) in the case of the Consolidated Profit and Loss Account, of the loss for the year ended on that date; and (c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

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Auditors' Report to the Members of Mangalore Chemicals and Fertilizers Limited

I. We have audited the attached Balance Sheet of Mangalore Chemicals and Fertilizers Limited, Bangalore as at 31st March 2011, the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. II. We conducted our audit in accordance with auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. III. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. IV. Further to our comments in the Annexure referred to above, we report that: 1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of the audit; 2. In our opinion, proper books of account as required by Law have been kept by the company so far as appears from our examination of those books; 3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; 4. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of The Companies Act, 1956; 5. On the basis of written representations received by the company from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors are disqualified as at 31st March 2011 from being appointed as a director under section 274(1) of the Companys Act, 1956. 6. Without qualifying our opinion, attention is drawn to note No 8 of Schedule 3B (Notes to Accounts), regarding the Concession for Urea and Phosphatic Fertilizers being recognized on the basis of estimates.

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7. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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Auditors' Report to the Members of Kingfisher Airlines Limited (formerly known as Deccan Aviation Limited)
1. We have audited the attached Balance Sheet of Kingfisher Airlines Limited (formerly known as Deccan Aviation Limited) (the Company) as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 (the Act), as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (herein after collectively referred to as the Order) we enclose in the annexure a statement on matters specified in paragraphs 4 and 5 of the Order. 4. Other Income for the fifteen months ended June 30,2006 included a sum of Rs. 2,672.20 Lacs towards certain subsidy provided to the Company by one of its suppliers in conjunction with lease of aircrafts on operating lease basis. The previous auditors had reported that they were of the opinion that such accounting treatment was not in accordance with Accounting Standard 19 on Leases and the subsidy should be recorded on a straight-line basis over the period of the lease. Their audit report on the financial statements for the fifteen months ended June 30, 2006 was modified in this matter. We concur with the views of the said auditors in principle that such subsidy should be recognized on a systematic basis in the Profit and Loss Account over the periods necessary to match them with the related costs, which they are intended to compensate although the matter does not appear to be covered explicitly by the said AS 19. 5. As reported in paragraph 6 of our report dated July 28, 2009, the Company notated its rights in certain aircrafts purchase agreements during the year ended March 31, 2009 in favor of certain lessons and took such aircrafts back on operating lease from the same persons. The Company incurred a loss of Rs. 14,437.15 Lacs on such novation (including interest on loans borrowed for making pre-delivery payments to aircraft manufacturers of Rs. 5,305.34 Lacs). As 266

already reported in the said report, in the absence of an independent valuation report, we had relied on the representations of the management that the novation was not established at fair value, the fair value of the aircrafts is at least equal to or more than the cost of acquisition and the preconditions specified in AS 19 for deferring the said loss are satisfied. We do not express any independent opinion in the matter. 6. Attention is invited to note 27 of schedule 19 regarding method of accounting of costs incurred on major repairs and maintenance of engines of aircrafts taken on operating lease during the year aggregating to Rs.12,256.85 lacs (year ended March 31, 2010 Rs. 207,00.76 lacs) which have been included under fixed assets and amortized over the estimated useful life of the repairs. In our opinion, this accounting treatment is not in accordance with current accounting standards. 7. Attention is invited to note 28 of Schedule 19 regarding use fees payable by the Company in respect of certain assets taken on operating lease aggregating to Rs 5,576.45 Lacs as maintenance reserves, in accordance with its understanding. Pending formalization of the matter with the relevant lessor, we do not express any independent opinion in the matter. 8. We further report that, except for the effect, if any,of the matters stated in paragraph 5 and 7 above and 13(a) below, paragraph 1(b) of the annexure to this report and notes 23 and 25 of schedule 19, whose effect are not ascertainable, had the observations made in paragraphs 4 & 6 above been considered, the loss after tax for the year ended March 31, 2011 would have been Rs.104,951.58 Lacs (March 31, 2010 Rs.175,350.66 Lacs) as against the reported loss of Rs.102,739.80 Lacs (March 31, 2010 Rs 164,722.06 Lacs), debit balance in profit and loss account as at March 31, 2011 would have been Rs.548,493.43.Lacs (March 31, 2010 Rs. 443,541.85 lacs) as against the reported figure of Rs. 534,847.43 Lacs (March 31, 9. Attention of the members is invited to note 24 of schedule 19 regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded. The appropriateness of the said basis is interalia dependent on the Companys ability to infuse requisite funds for meeting its obligations. Further to our comments in the annexure referred to above, we report that: 10. We have obtained all the information and explanations,which to the best of our knowledge and belief were necessary for the purpose of our audit. 11. In our opinion, the Company has kept proper books ofaccount as required by Law so far as appears from our examination of those books. 12. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account. 13. (a) Attention of the members is invited to note 16 of schedule 19 regarding recognition of deferred tax credit during the year aggregating to Rs. 49,341.80 Lacs (year ended March 31, 2010 Rs.76,463.31lacs) (Total amount recognized up to March 31, 2011 Rs. 292,778.31 Lacs) by virtue of which its loss for the year and debit balance in Profit and Loss Account stand reduced by Rs. 493,41.80 Lacs (yearended 267

March 31, 2010 Rs. 76,463.31 Lacs) and Rs. 292,778.31 Lacs (as at March 31, 2010 Rs.243,436.51 Lacs) respectively. In view of explanation 1 to clause 17 of Accounting Standard 22, we cannot express any independent opinion in the matter. (b) In our opinion, subject to the effect of the matters stated in paragraphs 4 to 6 and 13(a) above, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply in all material respects, with the mandatory Accounting Standards referred to in sub-section (3C) of section 211 of the Act. 14. On the basis of written representations received from Directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors of the Company, are disqualified as on that date from being appointed as a director, under clause (g) of sub-section (1) of section 274 of the Act. 15. In our opinion and to the best of our knowledge and according to the information and explanations given to us, the said accounts subject to note 21 of schedule 19 and read with other notes on accounts, give the information required by the Act in the manner so required and subject to the effect of the matters stated in paragraphs 4 to 8 & 13(a) above, note 23 of schedule 19 regarding certain accounts detailed in the said note being under review and reconciliation and note 25 of schedule 19 regarding the basis of computation of unearned revenue as at March 31, 2011 (Data of number of unflown tickets and their average value, based on which management has estimated the amount of unearned revenue, not being drawn from accounting records, could not be verified by us) (Effect thereof on revenue not ascertainable) give a true and fair view in conformity with the accounting principles generally accepted in India.

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CHAPTER 9: BEYOND THE BUSINESS.

9.1 CORPORATE SOCIAL RESPONSIBILITY

The UB Group -Corporate Citizen The UB Group is known as a large USD 2.2 billion corporate conglomerate with business interests ranging from spirits, beer, engineering, fertilizers and civil aviation to pharmaceuticals. Few, however, are aware that UB is a silent crusader in the field of community services in its own committed way. The Group has over the years emerged as a socially responsible corporate citizen. Its keen pursuit of activities in the field of Life Sciences has led to the setting up of a super specialty hospital - Mallya Hospital at Bangalore. In June 1991, the Mallya Hospital was inaugurated in the central business district of Bangalore in a multistoried complex with excellent medical equipment and best medical consultants. It was initially a 150-bed hospital, which has grown into a 450-bed hospital of which approximately 50 beds are for critical care. The hospital boasts of multi-specialty disciplines and is the first such hospital in India to be awarded the ISO 9002 certification. Subsidized health care is given to the under privileged class of society by providing a general ward which is reserved for them. The 24 hour Casualty and Trauma Care services are geared to handle all kinds of emergencies, ably supported by state-of-the-art, imported high-tech ambulances. These ambulances are fully equipped with Paramedical staff and are literally CCU's on wheel. The Vittal Mallya Scientific Research Foundation was set up in December 1987, in memory of the Groups Founder, late Mr. Vittal Mallya. It has been actively involved with a mission called Science for Humanity and is a non-profit organization participating with the Government in a Public Private Partnership on various projects. In the field of education, the Group has assisted in the setting up of the Mallya Aditi International School where the best possible education is imparted. Mallya Aditi International School is located on a sprawling five-acre campus in the northern outskirts of Bangalore. It boasts of buildings of award-winning architectural standard, which allows students to interact with the sky, the earth and plant life as they move from room to room. The beautification and entire maintenance of Vittal Mallya road has been the responsibility of the Group for over 15 years. Plans are afoot to further beautify the road. 269

The Groups commitment to the society is not restricted only to the city of Bangalore, but outside of Karnataka as well. It has also provided an extensive drinking water scheme in Srinivasapura village and has been actively involved in installation of Rain Water Harvesting structures at their Palakkad brewery thereby providing drinking water to Ganeshpuram village, Palakkad. A similar project was carried out at the Brewery in Ponda, Goa, which not only benefited the Brewery but also the village, whose well-water levels rose to help tide over their water problems during the dry months. Besides, there is an ongoing commitment to society by way of sponsorships of various events which are organized by charitable bodies. The Group has also been responsible for providing bus shelters in the city and water tankers to villages around Bangalore facing severe water shortages during summer. The UB Group has rebuilt and renovated the Cubbon Park Police Station, exactly a century after it was originally built as a guard room for the statue of Queen Victoria. Great care has been taken to maintain the colonial style of this quaint architectural heritage building. This is another unique Public Private Partnership which the Group is proud to be associated with. The Group will continue its commitment to society for the betterment of the community. Vittal Mallya Scientific Research Foundation (VMSRF) RESEARCHING WELLNESS OF LIFE Established (1987), in memory of the Group's illustrious founder Mr. Vittal Mallya, its prime objective has been laid to gain both newer and novel technologies that will have substantial application in industry and health care. Ably supported by The UB Group, it has established collaborative links with some reputed research and academic institutions within the country and abroad. The Foundation is led by a modest group of dedicated scientists trained in reputed institutions in India and abroad. Today, it is recognized by the Departments of Scientific & Industrial Research (DSIR), Dept. of Biotechnology (DBT), Council for Scientific and Industrial Research (CSIR) and the Ministry of Finance, Govt. of India, and has an incredible list of credits to its name.

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Patents obtained by VMSRF include Method of preparation of Insulin by cleavage of a fusion protein and fusion proteins containing Insulin A and B Chains (US Patent No.: 6337194B1). A new soluble double metal salt of group IA IIA of (-) Hydroxycitric acid, process of preparing the same and its use in beverages and other food products (US Patent No.: 6160172). An energy efficient process for the production of ethyl alcohol (Patent awarded jointly with IMTECH). CheckMite composition and a process for preparing the same (US Patent No.: 6060075). A process for the preparation of water soluble 'C' inclusion complex of Neem seed Kernel extracts containing Azadirachtin-A and its use in insecticidal formulation (US Patent filed). 1, 4-Dihydropyridines as calcium channel blockers (US Patent filed).

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CONCLUSION

The alcoholic beverages market is considered mature, with limited opportunities for growth. One way for alcohol manufacturers to increase their sales volume is by taking market share away from their competitors another is to expand the overall size of the market. To achieve these goals, alcohol manufacturers continue to invest substantial resources and capital into their marketing strategies because they believe it is necessary for expanding the market and increasing their margins. It will be important that public health groups focus their research on certain elements in the marketing mix. These include where the product is sold and what are the broad social trends marketers are using to communicate with target markets. Analysis has been done summarizes significant influences in consumer behaviour. It is advised that effortsbe directed not just to alcohol advertising, but also to the overall marketing strategy of alcohol manufacturers, and especially the techniques outlined above that encourage and influence selection. There have been several responses to concerns about the impact of alcohol marketing ranging from education and awareness to legal action and civil suits. Internationally, there are groups that advocate changes in alcohol marketing regulations as well as educate professionals and the public about the risks associated with a proliferation of alcohol marketing efforts. Indian Liquor Industry with estimated market value of INR 340 bn is growing at 1215% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The sector is expected to maintain its CAGR of 15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters. Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth and more people entering the drinking club with newly obtained prosperity or from up trading from the existing brand. Since liberalization, the economy has been growing at steady pace with per capita income rising from INR 23,222 in 2005 to INR 6,012 in 1991. Shift from country liquor to IMFL is expected with rising per capita income and limiting the sale of country liquor by states due to hygiene factor. Industry has one of the lowest per capita consumption of both Liquor and Beer and also since the margins are amongst the lowest. The Indian liquor industry, which claimed to be insulated from the financial crunch, seems to have developed pessimism over their sales in the year 2009. Though 272

companies are planning a number of launches in 2009, they are doubtful whether they can achieve as much sales in 2009 as they did in 2008 due to the global economic slowdown which has reflected in the sales of high-end spirits brands. A possible slowdown in premium brands sales and the consequent loss of higher margins is expected to hit companies revenues marginally in 2009. Asif Adil, managing director, Diageo India, said, The coming year will be more challenging, especially the first half of 2009. This situation will get mitigated in the second half of 2009 as the year-on-year comparisons will improve and markets will begin to look forward six months. In 2008, Diageo has launched a number of brands from its global product portfolio such as Thomas Barton Reserve Wines, Tanqueray No TEN, and single malt brand Singleton of GlenOrd. Mahesh Madhavan, president & CEO, Bacardi Martini India Ltd, said, Looking at the sentiments that most Indians carry as a result of the happenings in Mumbai and the global economic slowdown, there has been a certain level of reluctance from consumers against excessive indulgence. I do see this overall sentiment carrying forward for another 10 months before we see a change. Two months ago, Bacardi Martini India Ltd had launched Scotch whisky brands Dewars and Aberfeldy, priced upto Rs 22,000. Having said that the top end brands will see a steady pace of sales, they may not see the double-digit growths that were taking place through most part of 2004- 2008. Consumers who have been buying high-end brands will continue to do so. We also see a shift of consumption from the fine dining and 5 star hotels to home and private get together, Mahesh added. The sales of Scotch whisky was expected to reach at 12,03,000 cases in 2008 from 9,73,000 cases sold in 2007. Consumers who know these brands will carry them back on their travels abroad and hence we will see these brands holding their ground through 2009, although the heady growth rates may slow down next year, he concluded.

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FINDINGS AND LIMITATIONS

Most of PWDs consumer are use bislery because it is most branded and trustworthy. Consumer who use kingfisher product branded name of UB group. And rational price. Kingfisher is third largest in jaipur city. Bislery hold first position. Followed by Aquafina. Kingfisher has good supply chain. And availability of staff and team. Peoples saying :

o its competitor.

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RECOMMENDATIONS & SUGGESTIONS

After sale services should be improved. Regular visit should be maintained for proper supply. Increase no. of distributors. More schemes should be launched by the company and organization. One week credit facility or one bill due system should be introduced. Sales promotion tools such as key chains, pens, banners, racks, note pads, stickers should be given to the retailers. Counters outside hospitals, cinema halls, at bus stands & at the tourists areas should be given special consideration. Packaging should be standardized & made attractive. More experienced candidates should be appointed as sales officers. Catering service providers should be taken care of. We should focus on the costumer more than the retailer for that local advertisement would help us more like in local newspaper and magazines. We suggest you to organize some small camps like medical camps or some awareness camps to explain rural people that KINGFISHER is also a health caring stuff with mineral water under their belt.

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BIBLIOGRAPHY
BOOK: TITLE, MARKETING MANAGEMENT ,PLACE OF PUBLICATION: DELHI110092 , PUBLISHER: PEARSON EDUCATION , AUTHOR: PHILIP KOTLER PUBLISHER: TATA MCGRAWHILL PUBLISHING CO. LTD

Website: www.amphiindia.com www.economictimes.com www.ubg.com

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