Alcohol Industry In India

Indian Spirits Sector - Overview

Indian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over
the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The
sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka
is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam
the sector is about to witness next phase with realization rising in line with that of their foreign
counterparts.
There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor.
However, production rate is about 40% of total licensed capacity as total requirement of liquor
stands at 1.3 billion liters.

Major National Players

United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitan
who entered the IMFL space some 8 years back has already cornered 12 % market share and
gaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc.

International players
The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo has
tied up with Radico for entering Indian markets in brown spirits)

Investment Rationale
Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped
the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth
and more people entering the drinking club with newly obtained prosperity or from up trading
from the existing brand.

Inherent Potential:
Since liberalization, the economy has been growing at steady pace with per capita income rising
from INR 23,222 in 2005 to INR 6,012 in 1991.
Shift from country liquor to IMFL is expected with rising per capita income and limiting the sale
of country liquor by states due to hygiene factor.
Industry has one of the lowest per capita consumption of both Liquor and Beer and also since the
margins are amongst the lowest...

Alcohol and Emerging Markets (Patterns, Problems and

Response).
S. K. Ghosh
The second volume in the International Centre for Alcohol Policies series on Alcohol in Society
explores in a unique way how a balance may be achieved between public health and commerce;
giving a good indication how in practice different disciplines like governments, scientists,
scholars and public health experts, non-governmental groups and bodies, as well as the beverage
alcohol industry, all need to have a place at the table.

The book indicates that any policy on the topic of alcohol drinking should have a balance
between governments' regulation, industry self-regulation, and individual responsibility. This
book contains 14 chapters and is in two parts. In the first part, it discusses contemporary trends
of the patterns and consequences of drinking in developing areas like Africa, Asia, South East
Asia, China, India, and also central and eastern Europe, Russia, Latin America, and Mexico. The
second part discusses encouraging better practice. Different authors have contributed, thus giving
various perspectives on alcohol-related issues in different countries.

It has always been difficult to collect detailed and accurate information, and reliable data, to
achieve a proper conclusion in most developing and Latin American countries. In the sub-Sahara
and Africa, there is an enormous diversity of cultures in the whole continent, as well as rapid
social changes. The influence of these, as well as other factors, on patterns of drinking, which
cannot easily be described in simple terms, like quantity and frequency are so diverse that a
multidisciplinary approach towards understanding of alcohol drinking would be the better
proposal.

The book also states that each country in Africa aims to develop policies on alcohol, to enable
the inhabitants to enjoy the benefits and pleasures of drinking, while also taking appropriate
measures to protect against all the ill effects of alcohol.

All Asian countries are experiencing an increase in the demand for alcohol. This is initiated by
changing lifestyle, culture, and exposure to more sophisticated advertising in a context where
people have the right to choose from different options. Alcohol policies need to be formulated in
these countries taking into account the social, religious, cultural, economic, political, and public
health dimensions of alcohol use and abuse. A more holistic approach, based on objective and
long-term prospectives would be ideal, rather than ad-hoc policy-making. Most Asian countries
may be approaching alcohol use and abuse from a narrow, short-term perspective, without
adequate consultation from different disciplines.

The chapter on The Alcohol Drinking Pattern in India is also interesting. The findings and
observations are very close to my own findings from a similar research project in West Bengal
and Punjab about a decade ago; the chapter compares the drinking habits of Indians with Asians
in the UK. The pattern of drinking is definitely changing very fast, with major changes in
economic policies, the liberational market, the steady introduction of a market economy, and
growing consumerism in India. Other factors are also bringing about various changes, such as
the break up of the traditional joint family system and changes in values and attitudes, including
attitudes towards the consumption of alcohol. Cultural and religious controls, that prevented
people from drinking alcohol, are weakening steadily and alcohol drinking has been spreading
to all classes of people. Alcohol drinking is also increasing amongst groups who were
traditionally abstainers, such as women, teenagers, and the rural rich, and I agree that there is an
urgent need for the country to review its alcohol policies, especially in some parts of India where
alcohol drinking is becoming more prevalent.

In central and eastern European countries, there has been a long and rich tradition in the
production, trade, and consumption of alcoholic beverages. In Russia, it is said that extreme
political, social and economic changes, within a short time, and the fall of socialism, have created
a difficult context in which to formulate and implement government policy, suggesting that the
task that lies ahead, at least in the short term, is likely to prove very difficult.

China has experienced tremendous social and economic changes, from the 1980s onwards, and
the prevalence of drinking alcohol and of alcohol-related problems has also increased
significantly, which is posing a challenge to medical workers, particularly in the mental health
field.

In Mexico and other Latin American countries, the culture does not limit the drinking of alcohol
and so the habit is quite widespread. Another real danger is the production and sale of non-
drinkable alcohol, which is 96% proof alcohol, or the consumption of home-made beverages
which have been produced with no health controls, as a possible result of restrictions on
availability. I found a similar picture in India when I carried out an alcohol-drinking survey.
There is definitely an urgent need for research designed to support the national programme and
to answer questions about different aspects of alcohol drinking and alcohol production.

In a later chapter, quite a few important points are made in identifying the most appropriate role
for the beverage alcohol industry, mentioning the industry structure as a whole, improving the
data on patterns and level of consumption, responsible promotional and advertising practices,
alcohol education, and also suggesting a framework for responsibility and a checklist for related
activities.

The concluding chapter by Marcus Grant is well written. On the whole this book is well
presented and gives a new dimension to the pattern of alcohol drinking in many countries of the
world.

I am sure that it will be very useful for research workers, health visitors and other health
professionals, and also for alcohol producers and policy-makers on alcohol drinking in many
countries.

FOOTNOTES

Edited by Marcus Grant. Taylor and Francis, London. 1998, 384 pp., £33.00. ISBN: 0 87630 978
3.

Column : Whiskey, not whisky

Reghu Balakrishnan
Posted: Saturday, Jan 31, 2009 at 0002 hrs IST
Updated: Saturday, Jan 31, 2009 at 0002 hrs IST

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: Of course pubs routinely spring surprises on you, but sometimes these are of the
instructive sort. This was the kind of experience I had during a recent visit to a pub in the
western suburbs of Mumbai, thanks to an encounter with a sophisticated bartender. First, he
strongly suggested that I try Jameson or Bushmills, the Irish masterpieces. Next, he brought me
up-to-date with how the demand for these Irish brands has been increasing nowadays. I
crosschecked his insights with the International Wine and Spirit Record data, finding myself
surprised at the compound annual growth rate (CAGR) of Irish Whiskeys (spelt with an ‘e’) in
India. It was 133%, while Scotch whisky showed just a 9% CAGR. Irish brands sold about 3,500
cases last year, up from a mere 1,500 cases in 2005.

There is a history behind the ‘e’ in Irish Whiskeys. Two centuries ago, the poor reputation of
Scotch whisky forced the Irish and American distilleries to adopt the spelling “whiskey”, to
distinguish their higher product quality. Today, the brands distilled in Scotland, Wales, Canada
and Japan go by the sobriquet ‘whisky’, while ‘whiskey’ is what we call the spirits distilled in
Ireland and America.

Historically, Indian liquor manufacturers have a love-hate relationship with their foreign
counterparts. Foreigners have never recognised Indian-made whisky or brandy, arguing that it
doesn’t rise up to their standards. This has led to a peculiar situation, wherein Indian
manufacturers call themselves “Indian made foreign liquor” makers. Just acquiring a high-end
historical single malt brand and turning it into a low-cost blended brand will not suffice for
Indian manufacturers to get the coveted, extra ‘e’. This will only result in the invasion of more
Irish and Canadian brands.

Wikipedia currently defines Indian whisky as “an alcoholic beverag e that is labelled as
‘whiskey’ in India, which is distilled from fermented molasses, and as such would be considered
a sort of rum outside of the Indian subcontinent”. An unflattering decription for sure, but it is
unlikely that we will see this condescension subside any time soon.

'The malt whisky market has huge potential'.

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Full-Text Online Library

Online library of book, journals, articles. Research online.
www.Questia.com/Online_Library

Link to this page

<a
href="http://w w w .thefreelibrary.com/%27The+malt+
malt w hisky market has huge potential'.</a>

Byline: Dhiman Chattopadhyay

Summary: Glenmorangie, one of the oldest malt whisky brands in the world, now
owned by Louis Vuitton Moet Hennessy, is yet to crack the Indian market despite
India consuming 92 million cases of whisky annually.

Glenmorangie, one of the oldest malt whisky brands in the world, now owned by
Louis Vuitton Mo & euml;t Hennessy, is yet to crack the Indian market despite India
consuming 92 million cases of whisky annually. Its Global Business Development
Director David Ridley talks about the problems and business plans. Excerpts:

Indians consume more whisky than most other nations. Yet the malt whisky market
is negligible. Why is this? Globally, too, malt whisky has only an 8 per cent market
share, with 92 per cent preferring blended whisky. Malt whisky targets only the
high-end consumer who craves exclusivity. After LVMH LVMH Moët Hennessy-Louis
Vuitton (upscale retailer) bought Glenmorangie, we have been steadily increasing
our presence in India.

However, the country is yet to wake up to malt whisky. While 92 million cases of
whisky were sold in India in 2008, a mere 35,000 cases of this was malt. The bright
side of this is that it means there is huge potential for growth.

What is the major hurdle for growth? The taxation system on spirits is a major cause
for concern at present. Foreign spirits are taxed between 200 and 500 per cent
more than domestic counterparts here, differing from state-to-state. This is acting
as a deterrent for buyers, who prefer to buy single malt abroad where it's far
cheaper.

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What sort of growth are you looking at and how do you propose to achieve this? We
hope to see India reach this take-off stage by 2012. The company is not interested
in ad blitzkriegs since the target audience is rather niche. Instead, the business plan
is simple: to conduct several rounds of tasting sessions with both trade experts as
well as connoisseurs across key metros to create awareness and spread the word
about Glenmorangie.

NUMBERS OF NOTE
50%: The likely-increase in demand for diamond jewellery (Rs 29,300 crore n. 1.
Ten millions; as, a crore of rupees (which is nearly $5,000,000) s>.

Noun 1. crore - the number that is represented as a one followed by 7 zeros; ten
million ) in India in 2010-11, compared to the current Rs 20,200-crore sales. The
domestic jewellery market is pegged at Rs 76,800 crore, which includes gold,
diamond, platinum and others.

6,800 tonnes: The amount of municipal solid waste produced by Delhi per day,
while Mumbai generates 6,500 tonnes. These cities mostly dump the wastes in
landfill sites, according to a survey carried out by FICCI FICCI Federation of Indian
Chambers of Commerce and Industry in 22 cities.

Rs 22 cr: The amount of compensation paid to Britannia Industries by Danone Group

for IPR IPR Intellectual Property Rights
IPR Inprocess/Inprogress Review
IPR Industrial Property Rights
IPR Institute for Policy Research (Northwestern University and University of
Cincinnati)
IPR Institute of Public Relations infringement of the "Tiger brand.

2.5 mn: The number of "affluent households in India, according to a survey by AC

Nielsen. Out of this, 2.2 million belong to the upper middle class segment. The rich
has 0.2 million and the superrich su·per·rich
adj.
1. Of, relating to, or being the wealthiest.

2. Containing the richest ingredients: superrich chocolate ice cream.

n. (used with a pl. 0.1 million households.

Reproduced From Business Today. Copyright 2009. LMIL LMIL London Market
Information Link
..... Click the link for more information.. All rights reserved.

Provided by Syndigate.info an Albawaba.com company

India consolidates position as number one whisky

market
25-Mar-2003
Related topics: Consumer Trends

When you think of major whisky markets, India is unlikely to spring to mind, but the sub-
continent was the largest global market for whisky, in all its variants, last year, according to a
new report from Canadean.

The report said that whisky, or whiskey, consumption in India reached around 52 million cases
in 2002, some 20 per cent higher than that of the US, the second-largest market. Furthermore,
Canadean predicts that India will again strengthen its position in 2003, with consumption likely
to rise to 55 million cases. This market is fuelled almost entirely by Indian whisky which
accounts for over 99 per cent of total consumption. In the same period, consumption is likely to
fall in the US and Thailand, the second and third largest markets respectively.

But India is not the only country showing good growth in whisky sales. The market - led by
premium blends - in South Korea has mirrored the country's recent economic fortunes. The
strong recovery since the Asian financial crisis has coincided with whisky consumption more
than doubling in the last four years, Canadean said, and South Korea is now the fourth fastest
growing national market. More significantly, of the 10 markets increasing most rapidly, South
Korea is second only to India in volume.

Elsewhere, whisk(e)y consumption in many South American countries continues to recede with
Bolivia, Venezuela, Paraguay and Argentina among the five markets showing the largest
downturns. Despite its size, the US market also showed a downturn in 2002, with Bourbon and
other American whiskeys, Canadian whisky and blended Scotch all showing steep declines.

Canadean's report also analyses sales by whisky category, and shows that blended Scotch whisky
is by far the most popular. The biggest consumers of blended Scotch are the Spanish, who drank
9.8 million cases in 2002, but France is expected to overtake the US as the number two country
this year. Scotch's 'home' market, the UK, is the fourth largest in the world for the blended drink.

Although the US remains an important market for blended Scotch, Americans consumed twice as
much Bourbon and American whiskey, with consumption dominated by two brands: Jack
Daniel's Old No 7 and Jim Beam. However, the fastest growing overall brand with significant
consumption volume in the US is in fact Diageo's Crown Royal, a Canadian whisky, the report
said.

Consumption in Thailand, the third largest whisk(e)y market in the world, remains high - around
29 million cases in 2002, more than double its nearest rival - but global brands have still to make
much of an impact there. The five best selling products there are so-called secondary whiskies -
products such as Mehkong and Black Cat. Diageo's Johnnie Walker does have some presence in
Thailand, however, although its sales are still dwarfed by the local products.

For further details of Canadean's 2002 Whisk(e)y International Product Watch Report, contact
Andy Bryce .
Shaw Wallace

From Wikipedia, the free encyclopedia

Jump to: navigation, search

Shaw Wallace & Company Limited is a liquor manufacturer in India. It is involved in the
production and sales of Indian Made Foreign Liquor. The two biggest brands of SWC are Royal
Challenge Whisky and Director's Special Whisky.

It was acquired by United Spirits, a part of United Breweries, in mid-2005 for around Rs.1300
crore.

Before 1999, SWC was into diversified businesses, which it shed as part of a restructuring plan.
Most notable were the sale of Calcutta Chemicals and Detergents India Ltd to Henkel-SPIC