‘Pre­mium to At­tract Ta­lent’

The Economic Times - - Econ­omy: Macro, Mi­cro & More -

“Al­cobev as an in­dus­try has sim­i­lar busi­ness struc­tures to FMCG, but tra­di­tion­ally has not been an at­trac­tive in­dus­try for ta­lent,” said Anan­dorup Ghose, part­ner at HR con­sul­tancy Aon He­witt In­dia. “Con­se­quently it tends to of­fer higher pay lev­els or pre­mium to at­tract ta­lent.” The maker of McDow­ell’s No.1 and An­tiq­uity whisky saw its sales grow 4% and net profit 39% in FY17.

The re­sults have come in the face of a very sub­dued eco­nomic en­vi­ron­ment and sev­eral reg­u­la­tory changes “be­gin­ning with the sur­prise an­nounce­ment of to­tal pro­hi­bi­tion in Bi­har, cop­ing with the af­ter­math of de­mon­eti­sa­tion and cul­mi­nat­ing in the Supreme Court ban­ning the sale of al­co­hol near na­tional and state high­ways”, Kri­palu said in the firm’s an­nual re­port.

Most liquor com­pa­nies bat­tled pro­hi­bi­tion and reg­u­la­tory hur­dles dur­ing the year, forc­ing over­all mar­ket to de­cline 2%, the in­dus­try’s worst per­for­mance in more than a decade.

LOOS­EN­ING PURSE STRINGS

An HR con­sul­tant who de­clined to be iden­ti­fied said that when em­bat­tled busi­ness­man Vijay Mallya was at the helm at USL, there were few peo­ple who were paid very high salaries. “Now that USL is be­ing run more pro­fes­sion­ally and man­age­ment is spread out, the num­ber of peo­ple earn­ing more has grad­u­ally gone up,” the per­son said. In fact, more than 20 ex­ec­u­tives who took home eight-fig­ure salary last year joined United Spir­its in the past three years af­ter Kri­palu took the helm.

A head­hunter said the spir­its busi­ness is now “far more ac­cept­able” than be­fore among job­seek­ers. “There may be tem­po­rary set­backs be­cause of pol­icy changes, but the liquor busi­ness is here to stay and In­dia as a mar­ket will con­tinue to grow,” said the per­son who is fa­mil­iar with USL.

Di­a­geo, the maker of John­nie Walker Scotch and Smirnoff vodka, bought a con­trol­ling stake in USL from Mallya in July 2013 and later raised its hold­ing to 55%. The In­dian unit of Di­a­geo filed mul­ti­ple com­plaints against Mallya af­ter in­quiries un­cov­ered “im­proper trans­ac­tions” worth Rs 1,225.30 crore. USL al­leged that Mallya had di­verted the funds to nearly half a dozen com­pa­nies in which he had a di­rect or in­di­rect in­ter­est, mostly lo­cated in tax havens. For Di­a­geo, In­dia ac­counts for al­most 40% of its sales vol­ume and 9% of net sales. In­dia is the largest whisky mar­ket in the world, sell­ing al­most 200 mil­lion cases.

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