UB market share remains low in Tamil Nadu: Mallya
United Breweries Chairman Vijay Mallya today said the situation of the company has not yet changed in Tamil Nadu with a drastic drop in its market share due to the ordering patterns, followed by the State Marketing Corporation, sole retailer of IMFL in the state.
Mallya, however, hoped that Tamil Nadu government would give UBL a fair share of orders for its brands as they "very popular" among the consumers there.
"Our company continues to face problem in Tamil Nadu where its market share dropped drastically because of the ordering patterns followed by TASMAC," he told reporters after the 14th UB Group annual general body meeting here.
The decision lies in the hands of the state government, he said, hoping that it would give UBL a fair share of orders because the company's brands enjoy a unique franchise with the consumers in that state.
"Clearly, the Kingfisher brand is the most popular brand in India and should be freely available to consumers in Tamil Nadu where it used to enjoy undisputed leadership," he said.
The drop in UBL's market share in Tamil Nadu was triggered by the change in ordering policy where Tamil Nadu decided not to follow market demand in their order pattern, but to look at the capacities available in the state itself.
"After all, we are local producers within Tamil Nadu. It is not as if we are selling beer from outside. We provide the same revenue benefit to the state; employment benefit. So, we hope that we will be able to persuade them (TN govt) to allow Kingfisher to regain its rightful market share."
Asked about the overall national market share of the company in midst of Tamil Nadu problem, Mallya said it remains above 50 per cent though it would have been higher had the UBL's share in Tamil Nadu been true reflection of demand for its products.
"Fortunately, we have grown in other states. Therefore, our national market share remains above 50 per cent," he said.
To a query, Mallya said "the outlook for UBL for FY14 is good barring any unforseen circumstances...". The monsoon has been good in a way contrary to the expectations that it dampens demand for beer... But we have been consciously following a strategy of evening out the weather-related peaks and slumps so that demand for beer remains strong," he added.
Mallya said though the people have experienced inflation in more ways than one in their daily lives, the UBL has done well to ensure its inflationary costs of inputs in particular to be about half of the national inflation figure.
"While there have been some challenging circumstances, I think overall, we are pretty pleased with whatever we have delivered," he added.