Beer sales get boost from state excise policies
New Delhi: State excise policies aimed at recovering loss of revenue caused by Covid-19 are having a positive effect on India’s beer industry that had gone flat last year.
Helped by summer tailwinds, domestic breweries have not only been able to stem sliding sales but have started clawing back to pre-Covid numbers.
“In the east and West Bengal in particular, the beer industry is growing upwards of 50% due to a progressive change in the duty structure that has improved price accessibility for consumers,” said Kartikeya Sharma, president-India & South East Asia, AB InBev. “North and South India are expected to recover to 2019 level due to low rates of Covid infections and a favorable tax climate for beer,” he said.
In Uttar Pradesh, for instance, excise duties for volume-driving 500-ml strong beer cans that account for 70% of overall beer volumes have been reduced by almost a third.
“A 500-ml can of a top brand will cost Rs 110 instead of Rs 130,” said a UP-based liquor retailer. “The state has not proposed any fee increase for retail licence renewal. Wholesale and retail margins, too, have increased.”
“Quarter over quarter sales have improved and December quarter was 15-20% less than the same period last year,” said a senior industry executive at one of India’s largest beer companies. “States that have waived corona cess have done better.”
Similarly, in Rajasthan, one of India’s largest beer markets, duty hikes announced for Indian-made foreign liquor (IMFL), coupled with the thrust behind promoting ‘Rajasthan-made liquor’ (RML), are expected to push beer sales.
“Delhi has lowered the age limit for procuring and consuming alcohol. UP has come up with a personal bar permit, which will enable the residents to stock more litres in their respective houses,” said Rahul Kapur – partner at Grant Thornton Bharat. “Many states have now updated excise norms which is expected to boost alcohol consumption.”
“The cut in excise duty for beer in the liquor industry in certain parts of the country is sure to give a boost to beer consumption in the respective states,” said Prabhtej Singh Bhatia, co-founder and CEO Simba Craft Beer.