Kaya Spirits - Best Distillers 2018 Kaya Spirits Annual Information Memorandum 2019 | Page 19

Rebate structure & Liquor
Business Dynamics
Reasons of KBDL Turnover in Books
of Bottling Plant
REBATE STRUCTURE and HOW CAN WE MAKE HAPPEN THE GOOD SALE TURNOVER FOR OUR BRANDS
In India there are two types of Markets of
Liquor Business which vary as per the
norms of Excise /State government
1. Corporation Market
Where Government Buys Liquor from
Liquor Companies and Liquor Company is
paid by the Government on a cycle of 3/
7/10 days. Here there is no Market Credit
and Payment is very secure as Liquor
Company Invoice Liquor to (X/any) state
Liquor Corporation and Liquor Company
has to inform Government about their one
dedicated bank an account where all
payment is paid by Government. In the
above mode the Billing / Invoice is done by
the Company i.e. Manufacturer or
Blending Company and all turnover is
reflected in the Books of Liquor Company
for all the sales.
CORPORATION MARKET PRESENTLY Exists
at Himachal Pradesh , M.P. , ORISSA,
J H A R K H A N D , C H H AT T I S G A R H ,
TELANGANA, ANDHRA PRADESH, TAMIL
NADU , DAMAN & SILAVASSA, DELHI, WEST
BENGAL & KARNATAKA.
2. OPEN MARKET
In Open Market, L1/Wholesalers or
Licensees Buys Liquor from Liquor
Companies and Liquor Company is Paid by
the private Party and credit cycle is there
for 1-3 months .The Bottling Plant or
factory (not Liquor Company) Invoices all
Liquor Brands for any company for which
the bottling is being done in that Bottling
Plant . Thus in this Mode all brands Sold in
these states despite belonging to any
Liquor Company is reflected in the Books of
Bottling Plant as Invoice can be generated
in the books of the bottling Plant only due
to State excise norms of the Open Market.
Open Markets presently exists at PUNJAB,
NORTH EAST, HARYANA, MAHARSAHTRA,
GOA, PONDICHERRY, J&K and Uttar
Pradesh. OPEN MARKET OF LIQOUR IN
INDIA v/s GOVERNMENT CORPORATION
MARKETS Whereas Government are Safer
and quick realising in term of Payment on
the other hand Open Markets have longer
Payment credit as there is trend to pay the
Manufacturer in 1-3 months but in
government market it is 3-10 days.
In Corporation Market we have to make
Investment of Excise prior to sending
stocks which is around 100-300 % of the
EDP but in Open Market Permits or excise
investments are normally done by the
wholesales.
We were having Major sale at Arunachal
Pradesh, Mizoram, Export to Africa,
Uttrakhand and Punjab form BCL Bottling
Plant and as specified in Point no 2 the
Punjab State has Open Market where no
Company is registered to Issue Invoicing or
Billing, thus all our Past year Billing is done
by the bottling Plant i.e BCL Chemicals LTD
and it is shown in the Books of BCL Factory
Only.
This Year as specified above we have 14-15
states License where our company is
registered and Billing will be done to
corporation, thus all turnover in the Year
April 2018 to March 2019 will be involved
by Kaya Blenders & Distillers Limited.
Our projected sales is around 548000 cases
with this volume the turnover figures
would be more than 500 crore in 2018-19.
As we have done a Volume of 125000 in 4
states and thus more 12 states can increase
our Turnover to at least 4 Lacs cases that
too in a Government corporation Market
whereby the Investment realisation is
faster and credit time is less and ROI is
better.
2 % of
the sale
(Cartons
) EDP of Our
Brands
(price Per
Carton)*
INR EDP of
Competitor
Brands*
INR Margin to
Partner . 10 %
of the EDP of
us. INR ROI
(Margin X
amount per
Carton)
INR
Sr
No Brands Competitor Brands Minimum
Sale/Month/
Each State
*(Cartons) 1 Old Professor
Whisky Royal Challenge and
Royal Stag 150000 3000 1550 1550 155 465000
2 Royal Patiala
Whisky Bagpiper ,
McDowell's,
Officer Choice 300000 6000 1100 1125 112 672000
Imperial blue 100000 Marlin Whisky
4 Minister
reserve
Whisky
36 Kaya Blenders & Distillers Limited
Blenders pride
50000
1000
1300
3100
1325
3100
130
310
260000
310000
segment of Old Professor comes
where the rebates matter the most to
the Shop and we have kept our rebates
almost double that then existing high
volume segment
Present rebate/Promotions paid to
Wholesalers/retailers ( in Comparison
to our Rebates )by Liquor Companies
of Competitor Brands
Brand Name DIAGEO/U.S.L/PERNORD
rebate(INR) KAYA SPIRITS Rebate(INR)
1 Royal Stag & Royal Challenge 100-200 300
2 Bagpiper/Officer choice 25-50 100
3 Imperial Blue 50-100 125-150
4 Blenders pride 400-500 700
SOME PAST EXAMPLES OF LIQUOR INDUSTRY
1. Oasis Distilleries
All Seasons Whisky – The brand is
doing well with the consumers as
the company has strategically
placed the brand in the segment
above Royal stag and Royal
Challenge in Delhi and is giving
value for money to its consumers.
Their success was based upon
price, packaging and taste. They
offered a good blend and brought
down the spending of the con-
sumers on higher brands.
Ÿ
2000
The above socio-economic group
constitute more than 70 % volume of
the industry and thus we also have
more sale of Royal Patiala Brand than
other segment brands .No hard efforts
or any big brand name is required for
this type of sale as syndicate owners,
Retail vends and wholesalers prefer to
choose that cheap blend which offers
them higher rebate just like the
example at CHEMIST shop the shop
owner sells that After that the
Sr No
Ÿ
Our Brand has following competitors & their market share
3
For Low Priced Liquor or cheap Liquor,
the consumer for those are very less
conscious about brands or Company
names as they identify Liquor at retail
shops only by Taking the names as
ADDA, PAVVA and BOTTAL As per
survey they hardly uses any names of
brands or company names as these
are Belonging to the people of BPL
category who have daily routine to get
drunk and thus ask only as above at
the retail vends of Liquor.
Blue Patrol Whisky – Brand
Positioned against Imperial Blue,
but yet to achieve desired brand
equity due to consumers percep-
tion of the Brand name and
response to the Packaging.
2.
Ÿ
Ÿ
ADS Spirits
Royal Green Whisky – The Brand
achieved excellent visibility in
most parts of the country .Due to
its attractive packaging it gener-
ated a lot of curiosity and Trials.
Due to certain Market Dynamics
prevailing in North India the
brand is made to allow the high
rebates to the wholesalers and
the distributors. The result is the
brand is getting a trait push but
losing out on its bottom line.
in the Southern states, their
business is not as focussed as in
the North.
The Generation Whisky – It is
being launched with good
packaging but the company is yet
to unleash its marketing and
brand building activities to get
desired results.
3
Ÿ
Alcobrew
White &Blue Whisky – The
Company hit a bull's eye with this
brand in terms of packaging,
pricing and placement. The
company offered higher rebates
to its retailers and at the same
time did market promotions for its
consumers and gradually cap-
tured a decent share in the
market. They also kept up with the
changing market trends and kept
improving their packaging to keep
its consumers attached to the
Annual Information Memorandum 2018-19
37