When the new Airbus A380 landed in India for the first time, Vijay Mallya was the first to jump on board. As the first Indian airline company to have ordered the gentle new whale of the skies, Mallya felt entitled to it. Nobody quite realised the extent to which he would leverage its arrival coinciding with the second anniversary of his airline company. The A380 sortie inevitably had very little benefit, or indeed any positive rub-off for poor Airbus.Mallya had just pulled off yet another personal coup. Because the real surprise for aficionados was inside the plane. In what was definitely a first, Mallya had managed to bring together into one aircraft, three people who have managed India’s aviation policy. Getting his buddy and the NCP’s nominee in the Manmohan Singh cabinet, Civil Aviation Minister Praful Patel, along with his boss, Sharad Pawar, was one thing. But squeezing in Rajeev Pratap Rudy, who ran the aviation ministry for the BJP, was another. And to top it all, he also had on board Jagdish Tytler, who at one time was the Congress mantri for civil aviation. This “celebration-in-the-sky” had all the components of vintage Mallya: a free ride, hyper-expensive playthings, fabulous leveraging, ubiquitous networking. On Wednesday, when Mallya announced that he had bought 100 per cent of Whyte & Mackay, this was truly Mallya’s big moment. After all, alcohol is the mother engine on which the entire Mallya machinery runs today. Despite the fact that he has assembled a vast liquor entity by merging disparate domestic acquisitions, his 145 brands produced out of his 69 factories arguably dominate only the bottom of the fast-growing insatiable thirst of middle-class India’s alcohol barrel. To move up the value chain, Mallya knows he has to play with the global majors.By his own admission, Scotch was always “a gaping hole” in Mallya’s bulging portfolio. Or rather, just the most obvious one. He certainly gets vat-fulls of it for the $1.2 billion that he has just paid out. Those who know the business well suspect that it is only a matter of time before he merges his domestic business and his global acquisition, and floats the whole conglomerate on the global market. That alone, they say, will ensure that he manages to stay afloat into the foreseeable future. It is a strategy that he has used before. Most people have forgotten that Mallya had once acquired the global paint company Berger, run it in four continents they operated in, flipped the companies out of his basket via a successful public issue, and then exited with a clean profit. Clearly, this is a model he understands.But to do all this, Mallya will obviously have to do two things. The first, of course, is to ensure that the new combination of United Spirits with Whyte & Mackay makes enough money every month to service the huge debt that he has now taken on board. Even more importantly, he will very quickly have to learn to play by the rules of the global alcohol business. This may well be an inflection point in the Mallya maze that he may not quite have figured out as yet. At the very least, it will involve moving out of the way. As far as the entry of global brands into India’s vast alcohol market is concerned, that will mean for the first time that he allows in the big boys — players who are capable of competing with him — and may even rob him of the free ride that he has been enjoying in recent times. And what is worse, it will inevitably threaten the kind of dominance that he enjoys today where, for example, he has over 60 per cent of the beer market.At the moment, Mallya is still sitting cosy. The Indian spirits market today is massive, and for Mallya, rather conveniently, imposes high tariffs on imported liquors. But if the WTO has its way, this could collapse and foreign brands would sweep in, winning market share in an increasingly discerning Indian market.So Mallya will have to ensure the value of his companies increases. That synergies between his various businesses work. That’s the only way to make good times last. The writer is a public relations specialist
