United Breweries Group

United Breweries Holdings Limited

Type	Public
Traded as	BSE: 507458
Industry	Conglomerate
Founded	1857 (1857); 159 years ago
Founder	Thomas Leishman
Headquarters	UB City, Bangalore, Karnataka, India
Area served	World-wide
Key people	Vijay Mallya (Chairman) A K Ravi Nedungadi (President & CFO)
Products	Brewery, alcoholic beverage, engineering , real estate , horse breeding , derbies , Investments in sports
Revenue	$1.2 billion
Subsidiaries	United Breweries Ltd Kingfisher Airlines (Defunct) UB Global (trading company) UBICS, Inc.
Website	www.theubgroup.com

A Kingfisher beer advertisement in Goa, Baga

A Kingfisher beer advertisement in Goa

United Breweries Holdings Limited (UBHL) or UB Group is an Indian conglomerate company headquartered in UB City, Bangalore in the state of Karnataka, India.^[1] Its core business includes beverages, aviation and investments in various sectors . The company markets beer under the Kingfisher brand, and owns various other brands of alcoholic beverages. It also launched Kingfisher Airlines, an airline in India whose operation has been halted after problems in 2014 that led to its licence being revoked by the DGCA.^[2] United Breweries is India's largest producer of beer with a market share of around 52.5% by volume.^[3]

The company chairman is Vijay Mallya, who left India on 2 March 2016, allegedly to escape legal action by Indian banks to whom he owes some ₹9,000 crore (US$1.3 billion) in loans. United Breweries now has greater than a 40% share of the Indian brewing market with 79 distilleries and bottling units across the world. 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.

History

The UB Group was founded by a Scotsman, Thomas Leishman, in 1857. The Group took its initial lessons in manufacturing beer from South India based British breweries. At the age of 22, Vittal Mallya was elected as the company's first Indian director in 1947. After a year, he replaced R G N Price as the chairman of the company. Rangarajan took over from R G N Price.

United Breweries made its initial impact by manufacturing bulk beer for the British troops before independence, which was transported in huge barrels or "Hogsheads". Kingfisher, the group's most visible and profitable brand, made a modest entry in the sixties. During the 1950s and 60s, the company expanded greatly by acquiring other breweries. First was the addition of McDowell as one of the Group subsidiaries, a move which helped United Breweries to extend its portfolio to wines and spirits business. Strategically, the Group moved into agro-based industries and medicines when Mallya acquired Kissan Products and formed a long-term relationship with Hoechst AG of Germany to create the Indian pharmaceutical company now known as Aventis Pharma, the Indian subsidiary of the global pharma major Sanofi-Aventis.

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 Group's multifaceted operations. Now, it is just the horse.

Key Subsidiaries

United Spirits Limited Sales were expected to exceed 70 million cases during the fiscal year 2005–06, making the Group the third-largest manufacturer of spirits products in the world,^[4] after Diageo and Pernod Ricard. In addition, USL is one of only three in the world to own seven 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. With plans to become a global player, United Spirits Limited (USL), the flagship of the UB group, purchased the Scottish distiller Whyte and Mackay in May 2007 for £595 million (Rs. 4,800 crore).^[5] This would bring the brands of W&M like The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar Vodka, and Whyte & Mackay Scotch under its portfolio. However, in October 2014, the UB Group sold its Whyte and Mackay subsidiary to Philippines-based Emperador Inc. for £430m.^[6] In 2011, hounded by creditors and a depleted fleet of aircrafts, Vijay Mallya hired Rothschild consultants to raise funding.^[7] In 2012 a $2 billion deal is struck with Diageo, the world’s largest spirits company. Part of this payment was received in offshore accounts. According to banking sources, since most of the transaction proceeds were in overseas accounts, it was not possible for them to seize them. Needless to say the money was not used to repay loans to Indian banks in 2012 which lent Rs 7,200 crore to Mallya-owned Kingfisher Airlines. Later a sweetheart exit deal was brokered between Mallya and Diageo where $75 million were paid to Vijay Mallya to step down as chairman of United Spirits.^[7] In 2012, Diageo acquired a 55% stake in United Spirits.^[8]

United Breweries Limited The UB Group's brewing entity – called United Breweries Limited (UBL) – has also assumed undisputed market leadership with a national market share in excess of 50%. 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 52 countries worldwide, having received many accolades for its quality. As of March 2016, United Breweries was 43%-owned by Heineken.^[9]

Mangalore Chemicals and Fertilizers The UB group also manufactures fertilizers. The group company Mangalore Chemicals and Fertilizers (MCF) has a factory at New Mangalore in Karnataka.

UB Engineering UB Engineering Limited is the group's engineering business arm. It undertakes EPC projects, infrastructure, on-site fabrication of structures, installation, testing and commissioning of electrical and mechanical equipment, piping for large industrial projects. The company was initially established as Western India Erectors in 1963 and came under the UB Group in 1988.

UBICS UBICS, Inc provides IT consulting, bodyshopping services and professional IT products to business companies. In August 1999, the group made a first-of-its-kind media alliance for the promotion of NDTV Good Times, a lifestyle television channel run by NDTV.

Businesses

• Fertilizer^[10]
• Engineering^[11]
• Aviation (see Kingfisher Airlines)
• Formula 1 - Force India
• Alcoholic beverages
• I-League Kolkata based football team - Kingfisher East Bengal

Alcoholic beverage brands

Beer

• Kingfisher Strong (strong beer)
• Kingfisher Premium (mild beer)
• Kingfisher Draught (draught beer)
• Kingfisher Ultra
• Kingfisher Blue
• Kingfisher Red
• Kingfisher Strong Fresh
• Kingfisher Bohemia
• Zingaro (strong beer)
• London Pilsner
• UB Export
• UB Export Strong
• Kalyani Black Label
• Kalyani Black Label Strong
• Bullet
• Charger
• Marco Polo.
• Kingfisher Ice Beer
• Guru Strong.

Spirits

Some of the products have been entered in numerous spirit rating competitions and have won several quality awards. In 2006, McDowell's No.1, Black Dog, and Dalmore received Gold Quality Awards from the international quality institute Monde Selection.^[12][13] All of the vodka brands were entered in the 2006 Monde Selection’s World Quality Selections and won a Silver Quality Award.^[14]

See also

• VJM Media Group

References

External links

• Official website