According to our sources, the new agreement is to be effective from April 1. Rajeev Samant, Director of Sula Vineyards neither confirmed nor denied the report though he did say they were looking into the proposal. There was a similar response from Rukn Luthra, Managing Director of Remy Martin India. He did confirm that this was one of the business models which the company was considering- to have one master distributor for a range of products. In this case it will include Remy Martin Cognacs, the Pipe Heidsieck Champagne and Cointreau liqueur.
There is yet another cousin, Charles Heidsieck which is also in Remy Martin’s portfolio but is not expected to be offered to the Indian market. The slightly cheaper Piper is a direct competitor with the ubiquitous Moet et Chandon.
Heidsieck Monopole is more popular in UK whereas Piper Heidsieck is better known in the US. The most expensive Charles Heidsieck is apparently enjoyed by the richer Asians. They are all off-shoot champagnes of Heidsieck & Co. founded by one Heidsieck couple in 1785 but over the years the three companies branched off independently as separate Champagne Houses and have nothing to do with each other.
Sula may have nosed more intense possibilities to increase their top line with the increased range, with a better bottom line from the liqueur Cointreau used in cocktails in every bar in the country and a category of its own, having much lesser competition.
It is not yet clear how the principals would sort out their relationship with the existing distributor, Gurgaon-based Kyndal. A well-established spirits distributor, Kyndal has had relatively modest success with wines. The 30th Latt label owned by them, the wine produced by Flamingo wines in Nashik exclusively, and using seemingly false advertising that implied that Nashik was located at 30° latitude, was unable to make a dent in the market and is practically invisible on the shelves, jeopardizing the very existence of Flamingo. (Visit http://www.delhiwineclub.com/news/Kyndal.asp for an earlier related article)
Despite the guarded response, the imminent agreement ought to be beneficial for both sides as the time is ripe to make a dent into the virtual monopoly of Moet Chandon and Sula has a Pan India distribution system that can be effectively used to penetrate the market. Sula is the number one wine producer in India-targeting an ambitious growth in 2010-11. However, it has not been able to focus or perform as well with the imported products so far. This could be the turning point for them.
Mme Dominique Heriard Dubreuil, Chairperson of the € 312 million French Remy Martin Group was in Delhi earlier this week to promote Vinexpo Asia Pacific in Hong Kong-she is the chairman of the Show. But she did not comment on the agreement. However, the two-day burst into the Indian wine market would have prepared her for the battle ahead with the well-entrenched Moet Chandon and the need for an active support system for this market to make their strategy in India successful. |