Indian Alcohol Industry New

7/28/2019 Indian Alcohol Industry New

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By: Ekansh


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Introduction

Between 15 and 20 per cent of Indian people

consume alcohol.

Over the past twenty years, the number of drinkers hasincreased from one in 300 to one in 20.

India is predominantly a hard spirits market and beeris a minority preference.

The Hindustan Times says that 65 per cent of theIndian liquor market is controlled by whiskeymanufacturers.


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The varieties of alcohol manufactured for

consumption in India are:1. Beer (5%-15%)

2. Country Liquor (more than 40%)

3. Indian Made Foreign Liquor (IMFL)

4. Wines (12%-16%)

The beer industry is highly regulated. 26 differentalcohol specific taxes constitute about 50% of theconsumer price which is amongst the highest in theworld.

Beer is actually taxed 60% more than hard liquor.


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Major revenue contributor to state govts hence it is unlikely

that the level of taxes or control would reduce.

In fact, courtesy the high duty levels, the Indian market hasnot been flooded with cheap imports.

Key IMFL consuming states-

Andhra Pradesh-18%

Karnataka-18%

Tamil nadu- 16%Kerala-8%

The state of Kerala stands first in per capita consumptionof liquor at 8.3 liters followed by Punjab 7.9 liters.


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Major Players

Diageo-Smirnoff, VAT69, Johnnie Walker.

United spirits Whyte and Mackay, Black Dog, Antiquity,White Mischief, Signature, Royal Challenge, McDowells,

Bagpiper.

SABmillers Haywards, Foster.

Radico Khaitan- 8pm, After Dark, Magic Moments,Contessa.

Pernod Ricard- Chivas, Seagrams Blenders Pride.


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Growth pattern

The Indian beer industry has been witnessing steady

growth of 7-9% per year over the last ten years.

The rate of growth of IMFL has remained steady inrecent years, with volumes passing 155 million cases

during the 2008 from a mare 70 million cases in 2002.


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2010-2011

Total Indian Alcohol industry-660 million cases

Beer-181 million cases

Distilled spirits-478 ml cases

IMFL-236 ml cases

Country liquor-242ml cases

Wine-Rs.6 billion

Case is defined as 12 bottles of 750ml for distilled spirits and

12 bottles of 650ml for beer.


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The sector grew at a compound annual growth rate of13.2% for the period spanning 2004-2008.

12% for the period spanning 2005-09.

18.9% for the period spanning 2006-10.

Vodka, the fastest growing IMFL segment registered aCAGR of 44.4% in the Past 5 Years.


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Wine

Indias wine consumption is rapidlyincreasing and is forecasted to growat a compounded annual growth rateof 27 per cent from 2010-12.

The consumption of imported wines will rise at a CAGR ofaround 33 per cent during 2010-2012, well above theindustrys overall growth.

The value of the Indian wine market is around 2 per cent ofthe total alcohol beverage industry.

In the next ten years the wine consumption could reachmore than 10 million cases.


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Scope

Consumption of alcohol has

saturated in many countries,

while India offers immense growth

opportunities. Rising disposable income.

Per capita liquor and beer consumption is extremelylow in India-hence latent demand potential.

Growing social acceptance of alcohol consumptionand a large young population.

Women in India have also started consuming more

alcohol.


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Expected Growth Rate


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Indian Alcohol Industry New

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