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Published on December 7, 2007

The goal is to stimulate sales during the peak New Year's season after the Bt1.2-billion market went flat earlier this year, due to anti-drinking sentiment.

Pernod Ricard (Thailand), importer and distributor of Chivas Regal, last month initiated huge retail discounts of up to 20 per cent - the first-ever cut in the deluxe-Scotch-whisky segment. Its 12-year Chivas Regal in a 75-centilitre bottle now sells in stores for Bt799, down from Bt998 before.

Diageo Moet Hennessy (Thailand), importer and distributor of Johnnie Walker, fought back with a business-to-business campaign in which the wholesale price is offered to corporate clients buying between three and 12 cases.

"Our competitor [Chivas Regal] has launched the toughest-ever campaign," said Diageo president Vorathep Rangchaikul.

"In my point of view, Chivas is diluting its brand positioning, because its new price has fallen to the same level as our eight-year-old [Johnnie Walker] Red Label."

He said that while the move would hurt the Red Label in the long run, Black Label would be the only player left in the luxury-Scotch-whisky segment.

Vorathep insisted the price of Black Label - Bt1,050 now - would not be cut, because that would destroy the product's image.

"Marketing activities will be confined to areas that will not affect the product's brand value or image. Most activities we've launched for Black Label will help enhance its brand image, such as image advertising, experiential or on-trade marketing, and customer relationship marketing," he said.

Diageo next year will formally launch a fingerprint-scan project in cooperation with the national police. It will allow individual customers to enter any of Diageo's contracted entertainment complexes, pubs and restaurants without having to flash their ID cards.

The deluxe-Scotch-whisky segment witnessed near-flat growth of only 1 per cent in volume year on year in October, Vorathep said.

Black Label achieved sales growth of 3 per cent, with its market share rising from 70 per cent to 71.3 per cent. Sales of Chivas Regal dropped 5 per cent, while its market share fell from 27.5 per cent to 25.6 per cent. In the same month, Red Label enjoyed 50-per-cent growth.

Pernod Ricard (Thailand) managing director Phanuwat Wongsriphisant said he did not view the price cut as a means to destroy the competition's brand image. He said Chivas Regal was not positioned to fight Red Label but that it would be nice if, at the new prices, it did steal some of the market share from the premium-whisky brand.

"We launched our pricing campaign for Chivas Regal to serve our loyal customers. We're not the first to launch such a campaign. Our competitor has done that over the past three years, including presenting Johnnie Walker Black Label in a 1-litre bottle for only Bt998, the same price as a 75cl bottle. The company used to discount the price of its Red Label to only Bt499. What we've done today is to follow our competitor's pricing-strategy platform," he said.

Kwanchai Rungfapaisarn

 The Nation