Workers’ migration, high taxes hurt strong beer, country liquor – Times of India


BENGALURU/NEW DELHI: Steep taxes and migrant workers, who have beaten a hasty retreat to their home towns, have left a gaping hole in the demand for strong beer and country liquor, categories that are some of the largest in terms of volumes in their respective segments.
Beer sales tanked 60-94% across states during the period of three weeks in May from the time liquor shops reopened, while country liquor, also called Indian Made Indian Liquor (IMIL), witnessed a sharp drop of 30-40%, according to industry estimates.
The price hike, industry executives said, along with limited access to liquor shops during the lockdown has proved to be a strong deterrent for the beer industry. For instance, a 650 ml bottle of strong beer that used to cost Rs 125 during pre-Covid-19 times, is currently being retailed for Rs 170 in West Bengal, while in Andhra Pradesh, the price has shot up to Rs 220 from Rs 130.
As a result, beer volumes plunged 94% in West Bengal and 64% in Karnataka, a key market, said senior industry executives, quoting excise data. And strong beer, the go-to evening drink of daily wagers, accounts for 80% of the total beer sold in India, showed data from International Wines and Sprits Record (IWSR).
“With this shift of blue collar workers and their earnings being affected, we think they may exit the entry level beer category all together and move to cheaper forms of spirts as the prices are not affordable,” said Kartikeya Sharma, south Asia president for AB inBev. “We see the beer category, in our case, Haywards and Fosters, getting badly impacted due to this.”
Similarly, sold under folksy brand names such as Heer Ranjha and Ghoomer at around Rs 70-150 for a 750 ml bottle, country liquor, which accounts for over 40% of the overall distilled spirits market, has been badly hit, too, in several domestic markets, including Haryana, Rajasthan, Uttar Pradesh and Punjab.
“Our sales have gone down by 30-40%,” said Virat Mann, business head at ADS Spirits, one of the leading players in the segment that operates distilleries in Rajasthan and Haryana.
“A similar thing happened in Meghalaya around four years ago,” said Deepak Roy, executive VC and CEO at Allied Blenders & Distillers. “When the coal mines were shut down, most of the labourers went back to Bihar resulting in the overnight collapse of the liquor business there. The regular segment just disappeared.”



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