Anand Kripalu took over as the Chief Executive Officer of United Spirits after the UK-based Diageo bought the Vijay Mallya-owned company. In a chat with BusinessLine, he shares the company’s strategy and how USL plans to deal with the sensitive issue of Mallya’s continuation on the board. Edited excerpts:

What kind of strategy do you have in place for putting USL into top gear?

First, I’d like to say that our partnership with Diageo has clearly transformed USL’s position in India.

Our ambition now is to deliver scale and sustainable growth for the long-term.

There are three areas where we plan to invest — in our talent, our brands, and our manufacturing facilities.

We will invest in our brands and give consumers opportunities to trade up by offering them more choice.

We are driving price, reducing the cost of goods sold, delivering cost efficiencies throughout the organisation and our premiumisation strategy ensures that we are able to go after the creamier layer at the top.

Are there any issues within the organisation which needs your immediate attention?.

We are building an organisation that is structured for growth. Our organisation is being designed to deliver our new strategy, which means we will create new functions such as corporate relations and innovation, enhance some functions such as our compliance and ethics team and optimise others.

Are there any plans to completely retire or move away from volume brands and position the company as an entity which fully caters to the premium market?

We have over 100 brands and so we have to decide where to focus our investment.

We have a clear strategy to continue to build our power brands through increased investment, innovation and renovation. This strategy will not only leverage the ‘premiumisation’ trend but will also improve our margins significantly.

On the other hand, through our brands in the popular segment we will leverage scale to help us become more cost effective and still be competitive in key geographies where we have a sizeable and profitable business in that segment. So, we do not have any immediate plans to discontinue brands at the lower end of the price ladder.

Are there plans to increase Diageo’s stake in USL further?

There are no current plans beyond continuing the integration process and ensuring that we capitalise on our unique strengths as a combined entity.

We are fervent believers in the potential of the Indian spirits market and our focus for now is growth.

What is the status of the probe into the past accounting practices and the management’s role into suspected financial irregularities?

The inquiry is looking at issues in relation to (a) certain receivables of the company; (b) the unsecured loan given by USL to UBHL; and (c) a certain alleged lien claim against the company. Until the inquiry is completed, it is inappropriate to comment further.

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