The Ambrosia Awards 2021, held on December 17 at Hotel Andaz, New Delhi, was an extraordinary event, held during extraordinary times. The alcobev industry was starved of any networking event for nearly two years with the pandemic in full play. The Ambrosia Awards night came as refreshing breather to an industry which needed all the booster shots it could get. The Ambrosia Awards and the day-long Indspirit 2021 conference provided that perfect platform for the sector to not only network, but also to strategise going forward.
It was a packed awards night. There was one common refrain among the award winners as they were delighted to win as it endorsed and encouraged their efforts in keeping the focus of the industry going through resilience, strategising differently, innovation and above all the ‘never say die’ spirit.
That spirit was summed by the Ambrosia Business Leader of the Year 2021, Mr. Abhishek Khaitan, the Managing Director of Radico Khaitan Limited. While thanking Ambrosia for honouring him with the award, he thanked his team for growing the company. “With the team of ours we have been able to create over 15 premium brands in the country including a single malt whisky which is retailing at `1 lakh per bottle. This is a proud moment not only for me, but the entire team at Radico.”
Team spirit echoes at Awards Night
This ‘team spirit’ sentiment echoed through the huge gathering which had descended upon the venue to cheer the alcobev sector. Each of the awardees had a story to tell, even if it was just a ‘thank you’. It was not easy for the esteemed panel of judges who had to sift through so many deserving players. The panel of judges included: Mr. Bernard Schaefer, whisky expert and consultant; Mr. Ajoy Shaw, wine maker and consultant; Mr. Binod K. Maitin, independent consultant; Mr. Graeme Bowie, Scotch whisky expert; and Ms. Sheetal Kadam, wine promoter and consultant; and the judges for the packaging segment were Dr. Santosh Kshirsagar, Dean of J.J. School of Arts; Mr. Pranav Bhide, Sr. Creative Director, Leo Burnett; Mr. Shekar Ambedkar, Head of International Packaging Centre; and Prof. K. Munshi, former Head of Design Department, IIT.
Alcobev industry stands solidly behind the community
It hasn’t been easy for SAP Media Worldwide and its leader, Mr. Trilok Desai, to ensure the success of this event after a couple of postponements which the industry well understood. The Awards Night began with 30 seconds silence in memory of those from the industry who had lost their lives to Covid-19. In his address at the Awards Night, Mr. Trilok Desai talked about how the alcobev industry – be it Diageo, Pernod Ricard, Beam Suntory, Radico Khaitan, Jagatjit and several others – stood solidly behind to help the alcobev community overcome the Covid-19 crisis in whatever way possible. “Now, the worst period in the history of the alcobev industry is over. And we pray that Omicron does not turn out to be that dangerous.”
Mr. Desai was optimistic. There is a positive outlook on all fronts for the alcobev industry including the announcement of industry-friendly policies by the governments of Maharashtra and West Bengal. He singled out the efforts of the Delhi government which has revamped the excise policy and taken government out of the liquor business, a welcome move.
India, a global hub for alcoholic beverages
“India is fast becoming a global hub for alcoholic beverages as many of the world’s biggest brands continue to move to the nation in a bid to sell their products; compete with local distillers and producers. The reason is not far-fetched, India remains the world’s fastest growing major economy and, according to the International Monetary Fund (IMF), the country will continue to lead in economic growth at 8.5% in 2022 following an impressive growth of 9.5% in 2021.
All these have been possible with the Indian economy growing at a decent rate of 8.5% with the third largest PPP- purchasing power parity- and over millions of young consumers who have high purchasing power. India’s ever increasing number of high networth individuals (HNIs) is also contributing to the growth of high-end whiskies; scotches and single malts, besides wine. The society is lot more liberal now and has started accepting social drinking culture for the past few years.”
Centre, State now more amenable to industry needs
Mr. Desai mentioned how the alcobev industry has been contributing to almost all the State exchequers and how a few states have had to reverse prohibition within months of enforcing it, given the challenges of the huge revenue losses. The alcobev sector also creates millions of jobs directly and indirectly and contributes in no small measure to the growth of the industry. “The Central and the State governments have started understanding these aspects and several states are responding positively in the interest of the alcobev industry, thanks to the continuous efforts of CIABC; ISWAI; AIBA and AIDA. Let’s give them a big round of applaud for their efforts.”
Changing dynamics
The Indian alcobev industry has become more innovative with more single malts rolling out of the stables, not only concentrating in the Indian market, but have performing well in exports. “More crafted spirits; flavoured spirits; increasing number of gins and several start-ups during the past two years have attracted investors and kept the industry buoyant.”
India’s increased requirement of ethanol blending in petrol of 20% by 2025 to control pollution and reduce the bill on import of oil has fuelled the investment in the sugar and distillery industry for the ethanol production. This will lead to increased employment in the sugar producing states like UP and Maharashtra.
Ambrosia Awards instituted 28 years ago
Talking about Ambrosia Awards per se, he recalled how they were instituted 28 years ago and how over the years it has earned recognition and credibility as it has maintained a strict criteria and parameters for their evaluation. We have been continuously investing in this property over the years.
“The evaluation process is very stringent and the international jury has expressed their satisfaction at the judging process as we maintain strict international standards. The jury is highly reputed and is recognised in their respective fields. They have also been surprised at the quality of products over the last five years. They feel that IMFL products quality is constantly improving and they offer the best value on an average price of 6/7 dollars a bottle.”
While thanking the staff for the success of the event, Mr. Desai mentioned how Ambrosia has come to be one of Asia’s highest circulated wine and spirits magazine and is in its 28th year of publication. It was the first English language magazine launched in Asia in the alcobev sector and we continue to maintain the leadership position. The publication is owned by SAP Media Worldwide Ltd which has several other titles like Asian Photography and International Aerospace, Show Dailies and so on besides many other verticals like conferences, awards etc. In certain segment of the industry like Aerospace & Defense we are the 4th highest circulated magazine in the world and we publish dailies under the title SHOW DAILIES in several countries like Japan; Korea; UK (Farnborough); France (Paris); UAE (Dubai); Singapore and so on during the year.
Over the years, Ambrosia has evolved and has even moved on to publishing the first Coffee Table Book and now the 3rd edition of the Coffee Table Book is under preparation with lot of additions and deletions looking at the continuous changes in the markets.
Mr. Bhavya Desai, Group Head and CEO, talked about how the Ambrosia Awards and Indspirit 2021 conference had been planned to not only stimulate one’s thinking but one’s senses. He mentioned that a record number of entries had come for this year’s awards, despite the many challenges that surfaced due to the pandemic.
Svami, a brand in the non-alcoholic beverage segment, has teamed recently with Amazon Prime Video’s most anticipated football series on the legendary player, Diego Maradona. Svami has launched a Limited-Edition bottle for 2 Cal Cola in honour of Maradona’s No. 10 jersey. The partnership also commemorates Maradona’s birth anniversary, as the series premiered on the same day. The series premiered exclusively on Amazon Prime Video on October 29, 2021, across 240 countries and territories.
This collaboration between Svami and Amazon Prime Video is a one-of-a-kind partnership in which Svami’s varied selection of beverages and mixers, especially the new limited edition 2 Cal Cola, is the ideal choice of refreshment while watching the all-new exhilarating series at the edge of one’s seat. Through this collaboration, the brands aim to reach out to a larger football fanbase across the various metros of India. They have an exclusive retail tie up with Foodhall pan India and engagement on social media by involving the Maradona fan base has been on the cards. The brand will also run a digital ad to announce this partnership.
Aneesh Bhasin, Cofounder at Svami further added that, “Svami always has a different taste when it comes to collaborations. When we got to know that Maradona: Blessed dream was going to be launched on Amazon Prime Video, it was a no-brainer for us to onboard and thereby engage our football fan base via this collaboration. The launch of 2 Cal Cola Limited Edition, is our way of paying a tribute and celebrating the No 10 associated with this legend.”
Svami is spearheading the category of mixers and non-alcoholic drinks for adults. Svami’s comprehensive portfolio of drinks ranges from products like tonics to non-alcoholic rum and cola, giving people choices for great tasting drinks on all occasions. In a short period, Svami has become the default choice for bars and restaurants and retails in 40+ cities in India, Singapore and Hong Kong.
Maradona: Blessed Dream follows the controversial life of legendary footballer Diego Armando Maradona. A boy from Argentina with a dream of greatness, made his mark in the international football league, earning himself a well-deserved place in history. Living a life strewn with drugs, sex and public scrutiny, he played by his own rules regardless of the consequence.
Bombay Sapphire recently announced the launch of Bombay Sapphire & Tonic Ready-to-Drink (RTD), enabling its consumers to now enjoy the world’s number one premium gin as a bar-quality Gin & Tonic serve, no matter where they are. The much-anticipated offering combines the brand’s heralded, vapour-infused London Dry Gin with the perfect balance of tonic water, for a superior taste experience.
Bombay Sapphire has been disrupting the category ever since its iconic blue bottle landed on shelves within a sea of green glass. Now, consumers can prepare themselves for a drink that stays true to the brand’s long-standing commitment to only the finest ingredients with a bar-quality taste.
Bombay Sapphire & Tonic is best enjoyed cold, straight from the fridge and poured over ice with a refreshing squeeze of lime. Whatever the occasion, whether it’s al-fresco events, to intimate gatherings at home, or being on the move, the pre-mix is meticulously crafted to showcase the signature juniper and citrus notes of Bombay Sapphire gin. Aside from its versatility and convenience factor, Bombay Sapphire & TONIC ensures it does not compromise on quality and taste. The perfectly balanced gin’s amalgamation with tonic offers a premium quality cocktail to-go with no artificial flavours or colours added to the final product. The ready-to-drink cocktail cans are sure to become a widely demanded product that is ideal for outdoor gatherings, festivals, beach days, and more.
Adtnu Tiwari, Senior Brand Manager, Premium White Spirits, Bacardi India Private Ltd., expresses his views on the launch, “Bombay Sapphire is known for stirring creativity in various capacities and disrupting the market with its innovative vision. Besides versatility and convenience, one of the key focuses while launching the Bombay Sapphire RTD was to emphasise and ensure that the quality of the drink remained intact. While the product enables its consumers the ease of portability and storing the drink, what sets it apart is its taste that’s at par with that of a premium bar cocktail. Bombay Sapphire’s RTD is going to fit all occasions, anytime and anywhere; it is going to grow into becoming the next most demanded product under the RTD category.”
The sleek, matte finish packaging has been carefully designed to preserve the standard of the serve, both on-shelf and once purchased. The material helps protect the liquid from sunlight keeping the G&T fresher and colder for longer. Available individually or in a pack of four, the can is 100% recyclable. Bombay Sapphire & Tonic will soon be on the shelves of all top retailers for gin fans to pick up.
Uttar Pradesh became the first state to announce its excise policy for the year 2022-23, setting an excise revenue target of Rs. 40,000 crore, up from Rs. 34,500 crore in the previous year. To achieve the target, one of the routes the UP government has taken is to increase the license fee across all categories. The increase ranges from 20% to a whopping 172%, depending upon the nature of license.
Revenue Target
The UP government collects 20% of its annual revenue from excise, however in the last two years, due to Covid, there has been a dip in the collection of excise from the set targets. In 2020 -21 targetted revenue was `37,500 crore which was reduced to Rs. 34,500 crore in the current financial year (21 -22) against which by this year end the expected revenue collection is Rs. 36,000 crore. Considering the positive trends and situation becoming normal the UP government has fixed an optimistic revenue of Rs. 40,000 crore. This is 16% more than the revenue target of 2021-22. The breakup of revenue planned for 22-23 is shown below :
Avenues for Revenue
Licence Fee
To achieve Rs. 40,000 crore, it has increased the licence fee and security amount across all categories of licences. Some of these licences are shown below:
Besides the above mentioned increase, the processing fee for these licences has been increased to `1.0 lac as against Rs. 55,000 for each application.
Brand & Label Registration Fee
Label registration is very tedious work which the entire beverages alcohol industry has to indulge in every year by compromising manufacturing and supplies till new labels are registered. Manufacturers spend a good amount of productivity of its people besides paying the stipulated fee. The industry feels it is difficult to understand the reason for this increase every year. Under the new excise policy, this fee has been increased from 33% to 90%.
Excise Duty
There is a very nominal increase in the Pratifal fee of IMFL. This increase will be between 0.75% – 1.50% maximum per case of 9 litre depending upon the Liquor category (Economy, Medium, Regular, Premium etc.). Similarly for beer the Pratifal fee has been increased by Rs. 1 per litre. At least this is a relief to the industry which has a direct impact on fixation on MRP.
Country Liquor – The Milking Cow
Due to high sales, massive production stakes with minimal import allowed from outside state, country liquor (CL) has always been top priority for various state excise departments. CL’s contribution in overall excise revenue ranges between 45% – 50% every year and therefore a lot of effort is made to safeguard this major chunk of revenue. The UP excise has therefore initiated following steps to ensure its revenue of Rs. 19,140 cr. for the fiscal 2022 -23;
It is very interesting to note that the same UP Govt and state excise department which had become very strict on changing the packaging norms of country liquor last year has changed its decision in just a couple of months . After two subsequent hooch tragedies in western UP in early 2021, the alternatives of the CL in PET bottle were being discussed at high levels of government and in the months of July – August 21 pressure was mounted on the industry to source aseptic brick carton filling machines aka Tetra Pack machine since this kind of packing is considered as 100% tamper proof. In fact few circulars were issued to industry to start supplying at least 20% of CL in Tetra Pack immediately. There was much hue & cry in UP’s distillery sector because there is hardly any manufacturer of this type of filling machine in India and import of this machine can take minimum 90 – 120 days’ time. In the new excise policy this condition has been replaced from Tetra pack to glass bottle packing having a shrink wrap on the cap. This will certainly give a boost to Firozabad (UP) glass industry which has been requesting the government to provide a platform for its revival.
Wine: Still a Mirage
The total excise revenue generated through wine sales in 20 -21 was only Rs. 9.68 crore out of total revenue generated of approx. Rs. 30,000 crore. Wine’s revenue contribution increased to Rs. 29.54 crore in 2021-22 of Rs. 34,500 crore. The growth in wine sales in UP has phenomenally increased by 200% in just one year which clearly shows the scope and opportunities for wines. The increase of revenue is directly proportional to consumption.
At the moment there is not a single winery in UP and to boost the wine industry the government is continuing with its endeavour as provided in its last years excise policy by :
The new excise policy also indicates towards a separate new wine policy being prepared. It is suggested that the UP government establish a wine promotion board on the lines of the Karnataka Wine Board which is headed by a knowledgeable and senior IAS officer and other administrative officers who closely work with wine industry to find our more and more avenues for increasing wine production and consumption. Associations and federations like the Indian Wine Academy should also come forward to tap this potential.
Ease of Doing Business
We can see some steps the U.P. government is taking for ease of doing business in the excise policy. Some of these initiatives are:
Analysis By: Gopal Joshi
Strategist & Consultant
Beverages Alcohol Industry
linkedin.com/in/gopal-joshi-78a2a33
Global Brand Director, Jennifer English, looks at the trends which are set to take the world of treats by storm and why less but better, kindness, and mother nature will be inspiring how we treat ourselves this year.
The uncertainty and unpredictability of the last two years has seen consumers look for moments of spontaneity and joy in their lives, more than ever before. Gone are the days where treats are seen as frivolous luxuries, people now see them as essential parts of a balanced joyful lifestyle.
Over the last few years, we’ve repositioned Baileys as a year-round adult treat and successfully established it within the treating and indulgence category which is forecast to grow by £302 billion by 2025.
While once seen as a cream liqueur enjoyed only on special occasions, we’ve inspired consumers globally to get creative with Baileys all year round, from drizzling over ice cream in summer to adding a splash to your hot chocolate in winter. During lockdown, as home baking soared, Baileys was added to banana cake drizzle, dalgona coffee, mochi ice cream and more, as consumers looked for new ways to add a touch of indulgence to their sweet treats.
So, what’s next? Working with food futurologist, Dr. Morgaine Gaye, and renowned chefs, bakers, journalists, writers and food stylists from around the world, here are the macro trends that will impact the scrumptious treats we’re set to see and taste in 2022.
Less but better: 2022 is going to be all about indulgences that are meaningful – spending a little bit extra on more premium treats. Think along the lines of treating yourself to a beautifully crafted barista coffee or the ‘fancy pants’ chocolate rather than impulsive till point purchases. We want to make sure our treats are as meaningful as possible. It’s all about quality over quantity.
Taste of kindness: We’ve all seen the importance of kindness in recent times. And there’s no better way to express kindness than through the act of giving. But our need for kindness doesn’t stop at turning up at a friend’s house with a homemade brownies or box of cupcakes – we’re going to be looking for foods that are made with compassion, be it cocoa from a B-Corp chocolatiers or a Fairtrade coffee. We want to celebrate the spirit of community.
Inspired by Geo-Nature: Treats are about to get visually exciting – we want a feast for the eyes, as well as our bellies. A treat for all the senses… foods that glisten with iridescent gold, or mimic nature in the form of flowers, snowflakes and crystals. We’re ready to walk into a brand-new day, with some jaw-droppingly gorgeous treats to mark the occasion.“
Treating in 2022 will reflect our response to the past two years, as we emerge from a time of feeling restricted. We now want to explore our freedom and embrace indulgent fun in our treats, whilst also being mindful of the impact on the planet and how they integrate with nature itself,” says, Dr. Morgaine Gaye.
Grey Goose and Martini bring you the perfect way to cut through the winter chills and get in the holiday spirit with these perfect-for-winter cocktails. Bask in the winter sun with a Grey Goose Aperitivo Espresso with orange zest. Precede lunch with a Dry Apple Martini and enjoy the benefits of an apple a day all while keeping the seasonal gloom away! Relish cocktail hour with a Grey Goose Old-Fashioned on the rocks, and see for yourself why this oldest cocktail has stood the test of times. Keep the festivities alive even when the temperature drops.
APERITIVO ESPRESSO
A delightful mid-day aperitif! Coffee and vodka meet tonic water and orange zest to give it the freshness necessary to brighten up any afternoon.
Glass
Wine Glass
Garnish
Orange Zest
Occasion
Aperitif, Brunch
Ingredients
1 part Grey Goose Vodka
1 part Unsweetened Coffee
Tonic Water
Orange Zest
Method
Build in wine glass in this order: Grey Goose Vodka, coffee, tonic water, orange zest
GREY GOOSE OLD FASHIONED
As one of the oldest cocktails in the world. It’s easy to see why it has stood the test of time. Nowtry it with a simple Grey Goose Vodka twist instead of whiskey.
Glass
Rocks
Garnish
Orange Zest
Occasion
Aperitif, Cocktail Hour, Digestif
Ingredients
50 ml Grey goose Vodka
2 tsp Demerara Brown Sugar
Dash of Hot Water
Dash of Angostura Aromatic Bitters
Method
1 Add the sugar and water to a rocks glass, then stir to dissolve.
2 Add orange zest.
3 Slowly trickle in Grey Goose and cubed ice, piece by piece, stirring throughout.
4 Top with cubed ice to serve.
MARTINI DRY APPLE
Ingredients
2 parts Martini Extra Dry
¼ part apple juice
1/3 part Manzana Verde
1/8 part apple syrup
2 tsp caster sugar
Juice of half a lemon
Half a green apple
Method
Shake all the ingredients with cubed ice then double strain into a chilled martini cocktail glass. Garnish.
Garnish
Apple slice
Glass
Martini cocktail glass
Background
A modern interpretation of the Apple Martini
Bira 91, one of India’s fastest-growing brands in its category, and boAt, India’s #1 Earwear brand (as per IDC India Monthly Wearables Tracker, November 2021 release) have come together to launch an exclusive ‘BOOM’ audio collection that is high on both functionality and aesthetics. The ‘BOOM’ collection will include the brand’s quirky yet powerful Stone SpinX 2.0 and Stone 190 making them the perfect party companions. For those who enjoy music in their own space, this collection will also come with boAt Rockerz 450 Headphones.
The ‘BOOM’ collection has been intricately curated for consumers who are bold and expressive, and don their wearable accessories as an extension to their personality. It seamlessly integrates the daring colour palette and the striking design of Bira 91’s ‘BOOM’ variant with the fashion-forward aesthetically designed boAt portfolio. The limited-edition collection is expected to be nothing less than the go-to style statement accessory of the season.
To bring alive the central theme of music that resonates with both brands, Bira 91 crafted a special music track for this collaboration called ‘Get Set BOOM’. The high-energy video paints a picture of the perfect weekend, with music bringing friends together in an ultimate house-party setting. The playful and upbeat lyrics and strong visuals are complemented with subtle integrations of the audio collection and other brand merchandise to create the ‘party vibe’ like never before.
Commenting on this epic partnership, Ankur Jain, CEO and Founder, Bira 91 said, “Beer and Music are a match made in heaven, which is why we are thrilled to announce our partnership with boAt. At Bira 91, we have been partnering with several like-minded homegrown brands, to provide unique experiences to our consumers. And this association with India’s largest earwear brand is another step in that direction. The launch of the limited-edition collection of ultra-stylish audio devices helps both brands deliver on their consumer promise of quality and innovation. Our endeavour at Bira 91 is to become a lifestyle brand and we have been building a dynamic portfolio of products at the Bira 91 Merch Store. This partnership with boAt takes us a step closer towards that goal.”
Commenting on this association, Aman Gupta, Co-Founder and CMO, Imagine Marketing Pvt. Ltd. said, “We are elated to partner with Bira 91, a brand that is playful, creative and resonates well with our brand ethos. We aspire to launch the most unique, vivid and quirky products in the Indian market and the BOOM collection showcases our ideology really well. We hope our boAtheads enjoy using these products as much as we did designing them.”
The BOOM collection will be available exclusively on Bira 91’s Merch store and the boAt website starting 20th January.
• No hangover guaranteed
• Anti-anxiety oxidants
• Anti-aging properties
Junior Abhishek Herbals Pvt Ltd. is launching its first product range of liver supporting liquor brands in Odisha State. The Nagpur-based company is introducing Cordial Pride whisky and Cordial white rum, said to have a few health benefits – not affecting liver and kidney. It is also touted to have anti-aging properties and is guaranteed not to give one a hangover. Yes, that is what the company is claiming. Junior Abhishek Herbals has announced that these two products are ‘hepato and kidney protective’, besides having anti-anxiety oxidant strength.
Cordial Pride is a premium whisky blended with five-year-old malt and two different malts, along with a unique herbals formulation which provides it the taste of soil, smoke, saffron, peat and other natural aromas. It is mild on the palate, smooth to sip although the strength of alcohol is 42.8%.
Cordial white rum is said to be uniquely different, with the taste getting nuanced as per the effects of the different seasons. During the winters, the rum will keep the body warm from inside for around 7 to 8 hours and during summers, it will keep the body cool from inside. The company claims that one who consumes it is not likely to get a sun stroke or suffer from hypo thermia during cold seasons.
Protects liver
Further explaining the features, the company said the ingredients are so intelligently formulated that it controls aldehydes and neutalises its bad properties that may occur instantly or over a period of time due to regular alcohol consumption.
Protects kidney
The company stated that the products do not impact the kidney in any way. “Normally when we consume alcoholic drinks, it puts pressure on the kidneys. Alcohol forces the inner parts of the kidney which results in absorption of some blood particles, resulting in yellowish urine discharge. But Cordial products will not allow such effects and the discharge of urine will be colourless.”
Anti-Oxidants
The company further claimed that it controls aggression in the person during and after consumption. Cordial products are said to have a calming effect. The anti-anxiety oxidant property helps the consumer not to get aggressive, while it keeps the individual seemingly fresh. The drinker will not overeat, it claims, thus avoiding any acidic activity.
No hangover guaranteed
The Cordial labels are printed with. ‘No Hangover’ assurance. The company said that hangovers occur due to ‘worst kinds of ingredients added in alcoholic drinks’, but in Cordial there is no such ingredient. All ingredients, the company mentioned, had been selected after a research of nearly 20 years and the ‘under impression time’ of the drinker will be around 7 to 8 hours.
Anti-aging
The company also claimed that the products have anti-aging properties and that a person consuming a little quantity on a regular basis for around three months, the skin will start glowing, due to the herbal formulation. There will not be any side-effects, the company further stated.
The Chairman of Junior Abhishek Herbals Pvt Ltd. Anirudha Kapaley informed that the price of Cordial Pride would be in the range of `1,250 for 750 ml and the Cordial white rum will be `900 for 750 ml. It will launch the products in 375 ml and 180 ml sizes. We are planning to launch some more products with similar quality and priced reasonably, he said and expects good sales due to the unique features of the products.
The company which started in 2010 is led by Master of Master Blenders Anirudha Kapaley along with three other directors – Deepali Kapaley; Pawan Kumar Jha and Sandeep Raut. The Chief Operating Officer is Amit Awachate.
Ms. Nita Kapoor, CEO, International Spirits and Wines Association of India ( ISWAI, gives a holistic view and shares insights on various issues the industry faces on account of high taxes, inflation, and interstate duties. The way forward is E-commerce, low duties via the FTA route, Maharashtra State duty cuts, Delhi Excise Policy model and premiumisation of liquor.
What role has ISWAI played to boost the interest of its members?
ISWAI is an apex body of the premium alcobev sector, promoted by multinational alcoholic beverage companies having investments and business operations in India. Founded in 2004, ISWAI strives to transform the Indian spirits and wines industry, upholding the highest level of quality, responsibility and ethical business practices.
ISWAI is actively engaging with state government and policymakers and committed to a supportive, predictable, harmonised, and progressive policy environment that enables member companies to thrive in India and build economic value for the States where they operate. ISWAI and its members advocate for responsible alcohol consumption by creating conversations about the negative impact of misuse, spurious and counterfeit products, illicit products, drinking and driving, and underage drinking.
Members of ISWAI include global leaders in both the spirits and wine industries, like Bacardi, Beam Suntory, Brown Forman, Campari, Diageo-United Spirits, Moet Hennessy, Pernod Ricard, and William Grant & Sons. Taken together, ISWAI’s members account for a substantial part of the revenue generated from alcoholic beverages across the country.
How have the international beverage companies coped with the Covid phenomenon?
Covid-19 has affected almost all businesses across sectors. The alcobev brands manage disruptions caused by Covid by focussing on efficient supply to ensure stock availability. The service of outlets is in line with the lockdown timings and guidelines laid down by each state. The alcobev companies also urge the state governments to consider home delivery of alcobev products as a regular service. It will minimise the disruption of retail businesses and improve job opportunities at the last mile route to consumers.
What is the strategy being adopted by the international beverage companies post-Covid?
In addition to what we mentioned above, ISWAI and its members engage with the state governments through regular consultations, which are essential to forging a predictable and progressive policy framework.
We have also seen a trend of premiumisation in the alcobev sector, which has further accelerated during the pandemic. The alcoholic beverages consumers are opting for better and premium quality brands. At-home consumption is paving the way for home delivery, social acceptance, and a rise in women consumers on account of home delivery during the pandemic.
Besides this, we are already seeing trends play out with consumers experimenting with craft gin, red wine and ready-to-drink (RTDs), which are anchored on differentiated and low alcohol content.
Do you see other states following suit by cutting duties like Maharashtra did?
West Bengal has already reduced its duties, and yes, we would expect other states to rationalise the additional duties on Bottled In Origin (BIO) products as a 150% customs duty is already levied, and any additional tax is a ‘tax on tax’ that artificially inflates the price of BIO products making it unaffordable for the consumer and thereby creating economic leverage for the counterfeit and spurious products. The reduction of duty in Maharashtra will lead to curtailment of counterfeit products, improve state revenues on account of minimal cross border inflow of spurious products.
The alcobev industry in India is witnessing significant changes influenced by a global culture leading to a trend towards premiumisation. Indian consumers are increasingly opting for ‘Bottled in Origin’ (BIO), and geographical indication (GI) tagged niche products, which carry a stamp of premium quality. The Maharashtra government has taken cognizance of the emerging growth trends of BIO in the alcobev segment and the importance of GI-tagged products, which is commendable. The decision by the Maharashtra government to halve the duty on imported alcoholic products (from 300% to 150%) will bring price rationalisation, disincentivise, if not eliminate, inter-state product smuggling, and increase volume offtake, thereby boosting the state excise revenue.
How is the Delhi government’s new policy likely to impact the international alcoholic beverage companies?
ISWAI believes that extended hours for on-premise alcobev outlets, reduction in the number of dry days, super-premium vends, an overhaul of consumer experience by privatising retail, auctioning of retail outlets, are all steps in the right direction and in keeping with Delhi’s image of a modern and bustling city that caters to a large number of young residents and tourists. It would also provide relief to the hospitality industry that has been hit hard by the pandemic.
As per the new policy, only private liquor shops will run in the city, and each municipal ward has 2-3 liquor vends. The Delhi government’s new policy is a welcome move. It is likely to curb illicit practices by equitably redistributing liquor shops, improving the consumer experience, and reducing corruption besides increasing government revenue. Every liquor outlet in the city will provide a unique walk-in experience to its customers, who will have multiple choices of brands. The entire selection and sale process will be completed within the vend premise.
Is all-around inflation likely to impact the industry?
Yes, inflation has affected the alcobev industry significantly. The triple whammy of suppressed volumes, runaway inflation, and reducing supplier share of the consumer rupee, makes it very hard for alcobev manufacturers to sustain their business operations.
The industry needs a predictable policy, a regulatory overhaul and an inflation-embedded approach to pricing. This would consider various factors such as differences in operating conditions between states, such as state levies, cost of materials, transportation, route-to-market, etc.
For example, the costs of a fast-moving brand in the value segment have increased by ₹60 per case compared to the previous year (A case is twelve bottles of 750ml each).
As per the estimates by the ISWAI, wet alcoholic ingredients, such as ENA and Scotch, are now 5% more expensive than last year, while the cost of packaging materials such as glass bottles rose by 8%, cartons by 37%, and labels and closures by 5% and 15% respectively, in just one year (FY21 and FY22 (est)). Additionally, transportation costs have shot up by 68% between FY18 and FY22.
With most states holding onto the historical lowest EDPs, no price increase leeway has been provided to the industry over the years, resulting in the Indian alcobev sector facing a sustainability crisis.
However, the need of the hour is to allow alcobev manufacturers to seek price increases recognising the supply chain and inflationary pressures. The excise policies of the states need to adjust for inflation.
Do online sales of alcobev products have a future in India?
In a pandemic-induced environment of social distancing, offering home delivery of liquor to curb counterfeit, spurious products, transparent pricing and simultaneously limiting crowding at shops is highly recommended. We believe that if the services are handled maturely by the retail trade and with all the necessary regulations in place, this could become a potential channel for the growth of revenue for states.
ISWAI urges state governments to consider ex-retail home delivery of liquor as a sustainable and long-term model. The state government can consider allowing home delivery to be included as a permanent feature of the excise policies of the states to cater to consumer demands and minimise industry disruptions during the Covid surge. It would enhance livelihood opportunities and unlock the potential of an alternative channel towards state revenues.
Has the premiumisation of liquor grown the sales of foreign liquor?
The premiumisation trend across beverage alcohol has been going on for some time. While Covid-19 has greatly impacted the alcohol industry in 2020, premiumisation appears to continue as consumers adopt new purchasing habits. Disposable income spent on going out to eat and drink before the pandemic was redirected to premium-and-above products for at-home consumption. As per IWSR Drinks Market Analysis data, total sales volume (all alcobev) declined about 29% to 474 million cases in 2020 from 668 million in 2019. Sales of spirits (which include whiskey, gin, vodka, rum and brandy) were down 20% to 277 million cases in 2020. The industry is yet to recover to pre-Covid levels and the jury is out there to confirm the growth of foreign liquor sales.
What is the possible outcome of the FTA between the UK and India?
We are encouraged by the forthcoming outlook shared by the Union Minister for Commerce and Industry, Piyush Goyal and the UK Secretary of State for International Trade, President of The Board of Trade, Anne-Marie Trevelyan, during the launch of the India- UK Free Trade Agreement (FTA) on January 13th,2022 in Delhi. The schedule to complete the early harvest agreement in the coming months is what we look forward to. Both ministers assured that the two nations would proactively and regularly engage with each other, deliberating on the trade deal’s scope and coverage.
Mr. Goyal said, “Atmanirbhar Bharat is about opening India’s doors wider so that India engages with the world from a position of strength, on equal, fair & reciprocal terms.” He calls for enhancing sectoral cooperation by addressing market access issues and removing trade restrictions.
Together with the Scotch Whisky Association (SWA), ISWAI has proposed a reduction in the customs duty, for products above a price threshold, from 150% to 75% immediately, and a final resting rate of 30% at the end of 5 years. Improved market access for Scotch would enable an increasing number of Indian consumers to enjoy these premium products. A similar reduction of duties on Bulk Spirit would also be good for our industry to step up the quality of its products by blending with aged Scotch, step up exports, and increase Indian government tax revenues – a win-win for all.
