The liquor industry is expecting a surge in sales driven by in-home parties and celebrations in year-end festivities. Industry experts are optimistic about 7-8 per cent growth for the collective liquor industry in the country.
The quarter of October to December is the peak season for the Indian industry, driven by increased demand for premium alcohol.
Indian consumers are appreciating quality over quantity, as can be seen in an increasing desire for refined experiences and finest offerings, which is driving high-end sales.
The Manipur government’s decision to legalise liquor in the state is also expected to drive up sales. The state withdrew the prohibition from district headquarters, greater Imphal areas, tourist locations and registered hotel establishments, according to media reports.
Experts say, the idea of prohibition seems to have lost steam, and most governments have begun to look at the industry as a vital source of tax revenues and a partner in the economic wellbeing of the state.
The uptake in the early days before Diwali was quite good in most markets dominated by brown spirits (whiskies, brandy, rum, etc.) and is expected to grow around 4 per cent during 2023-24. Alcobev is looking at a 10-12 per cent growth during the second half of the current year.
Peninsular India holds the key to the Indian alcoholic beverages market, accounting for over 50 per cent of the sales of liquor and beer.
Karnataka is the largest-selling state for liquor, with sales of 6.87 crore cases (9 litres each) in 2022-23 though a majority of it is in the value segment. Delhi NCR and Mumbai metropolitan region remained the largest market, accounting for two-thirds of the liquor business.
Delhi, Mumbai, Bengaluru, Hyderabad along with cities such as Pune, Ludhiana, Jaipur, Lucknow, Guwahati, Vijayawada, Raipur etc. have seen an upward trend in alcohol consumption during the festive season starting from Dusshera leading up to New Year.
India’s alcoholic beverage market is set to boom, reaching US$64 billion in just five years, solidifying its position as a top five global contributor. The industry, currently valued at US$52.4 billion (2% of GDP), encompasses both branded and country liquor, according to a report by the International Spirits & Wines Association of India (ISWAI).
The Australia-India Economic Cooperation and Trade Agreement facilitated the reduction in duty on Australian premium wine, which will enable them to be more accessible to the Indian consumer.
On January 1, 2024, there will be further reductions in duties for Australian premium wine (in the US$5 and above category).
If India is able to negotiate the removal of non-tariff barriers imposed by countries like the UK and EU on the majority of Indian products, there can be a surge in liquor export from India.
Inflation, particularly related to Extra Neutral Alcohol (ENA) and other input materials, has shot up and is posing a serious challenge to the alcohol industry. Prices of ENA, a key ingredient of the alocbev industry, have risen by 9 per cent over the last year.
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