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Whisky industry calls on Chancellor to fulfil Manifesto Pledge to Scotch

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The Scotch Whisky Association (SWA) which conducted a poll shows that a third of the voters are less likely to support the Conservatives if the Chancellor, Jeremy Hunt increases duty, while 72% support a freeze on Scotch whisky tax in the Spring budget.

Jeremy Hunt has been urged to freeze duty to fulfil the pledge made in 2019 to “ensure our tax system is supporting Scottish whisky”. The Chancellor will use his Budget to finalise a long-awaited review of the duty system, but reports suggest whisky drinkers and producers will get nothing – and even see tax rates increase.

Per unit of alcohol, duty paid on spirits is already significantly higher than the European average, with around £3 in every £4 spent on a bottle of Scotch whisky going to the treasury as tax. A further increase to spirits duty in the budget would further add to the cost of living and fuel inflation – which the UK government has pledged to halve this year.

The poll, conducted by Survation, also shows Scotch Whisky’s crucial role in supporting the wider supply chain, with 76% believing support for the Scotch Whisky industry will boost hospitality businesses. Spirits like Scotch whisky account for 34% of sales in the UK on-trade, but 99% of distillers do not have access to proposed tax breaks in pubs and bars, known as “draught relief”. 

The Scotch whisky industry already contributes more than £5.5bn to the UK economy every year. The sector supports more than 42,000 UK jobs, employing 11,000 people directly, the majority of whom are in rural communities of Scotland. More than 90% of all UK spirits production is based in Scotland, and the SWA has argued that any increase to spirits duty would put Scotch whisky distillers at a further competitive disadvantage and disproportionately impact business north of the border.

Commenting on the results of the poll, Mark Kent, Chief Executive of the Scotch Whisky Association, said, “Distillers across Scotland are waiting for the pledge made in 2019 to be fulfilled. There has been a review of alcohol taxation, but still Scotch whisky is taxed more than beer, wine or cider and 99% of distillers do not have access to tax breaks available to sales in the on-trade. The competitive disadvantage faced by the industry could get worse if the Chancellor further raises tax on Scotch whisky and other spirits in the Budget this week. We urge him to listen to people across Scotland, make good on the commitment to support Scotch Whisky, and freeze duty.”  

Liquor and duty free sales look upbeat as the Covid threat recedes

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There is an air of optimism as the threat of Covid is on the wane. A report on the growth of the alcobev and duty free market.

The global alcoholic beverages market was estimated to be at USD 1.58 trillion in 2020 and is projected to grow at a compound annual growth rate (CAGR) of around 3.5% between 2020 and 2023. India is one of the fastest growing alcoholic beverages markets globally, with an estimated market size of USD 52.5 billion in 2020 and the market is expected to grow at a CAGR of 6.8% between 2020 and 2023.

The alcoholic beverages industry contributes to around 1.5 million jobs in India and generated around USD 48.8 billion in sales revenue in 2019. The sector is open to foreign investments and many states offer subsidies for local manufacturing (for example, Maharashtra and Karnataka for wines). From the demand side, factors such as rapid urbanisation, changing consumer preferences and a sizeable and growing middle-class population with increased purchasing power have contributed towards growth in demand for alcoholic beverages.

According to industry estimates, the number of people consuming alcohol increased from approximately 219 million in 2005 to 293 million in 2018; it is projected to increase to 386 million by 2030. The share of the upper middle income group in alcohol consumption has increased steadily from 7% to 21% and is expected to increase to 44% by 2030.

The Global Duty-Free Retailing Market is projected to reach USD 127.83 billion by 2027 from USD 87.37 billion in 2021, at a CAGR 6.54% during the forecast period.

The Americas Duty-Free Retailing Market size was estimated at USD 21 billion in 2021, is expected to reach USD 22 billion in 2022, and is projected to grow at a CAGR of 7.37% to reach USD 32 billion by 2027.

The Asia-Pacific Duty-Free Retailing Market size was estimated at USD 36 billion in 2021, is expected to reach USD 38 billion in 2022, and is projected to grow at a CAGR of 6.75% to reach USD 53 billion by 2027.

The Europe, Middle East and Africa Duty-Free Retailing Market size was estimated at USD 31 billion in 2021, is expected to reach USD 31 billion in 2022, and is projected to grow at a CAGR of 5.71% to reach USD 43 billion by 2027.

The global duty-free and travel retail market is estimated to generate revenues of around $112 billion by 2023, growing at a CAGR of approximately 8% during 2018-2023.

The duty-free retail market in the Asia-Pacific, the largest market for duty-free retail products, is expected to cross pre-pandemic levels in 2023 as normalcy returns to the market and customer demand picks up, according to a report from GlobalData.

The rising number of middle-class population and rapid urbanisation is propelling the growth of the global duty-free and travel retail market. The increase in disposable income, improvement of standard living, and affordability and convenience of air travel are boosting the number of middle-class population travelling and purchasing products from these stores in the global market. The leading vendors are developing consumer-focussed businesses especially for this end-user segment to boost their travel retail industry size over the next few years.

In emerging countries such as India and China, middle-class consumers are the largest contributors to the economic development and have the spending capacity to promote the growth of the duty-free industry in the global market. With the surge in middle-class median income, their expenditure trend, travelling mode, and demand for premium brands will also rise, thereby, fuelling the travel retail sales. The rapid development and urbanisation will augment the development of infrastructure and offer access to better amenities in the global market. The building of new airports and ports will boost the revenues in the global duty-free and travel retail market.

The significant growth in the tourism industry is one of the key factors driving the market growth. In line with this, the increased time spent by passengers at airports due to security concerns and early check-in times is favouring the market growth. Additionally, the increasing preference for luxury and premium products, such as cosmetics, fragrances, and alcohol, is acting as another growth-inducing factor. Besides this, the rising air travel and proliferation of new international airports due to the rapidly expanding aviation industry is providing a considerable boost to market growth. Moreover, the introduction of touch screens and interactive retail kiosks, which offers seamless ordering and payment solutions, is providing an impetus to the market growth.  Apart from this, the widespread adoption of new marketing strategies by brands, such as launching exclusive and limited products and partnerships with prominent distribution chains to gain a competitive edge, is propelling the market growth. Furthermore, the implementation of various government initiatives promoting international tourism is positively influencing the market growth.  Other factors, including rising expenditure capacities of the consumers, emerging trends of digitalization in retailing processes, the rising consumer inclination for premium wines and spirits, and the introduction of pre-ordering applications, are anticipated to drive the market growth.

The global duty-free and travel retail market by product is segmented into fragrance and cosmetics, liquor, fashion and accessories, tobacco goods, electronics, watches, and confectionery.

However, some countries impose duty on goods brought into the country, though they had been bought duty-free in another country, or when the value or quantity of such goods exceed an allowed limit. Duty-free shops are often found in the international zone of international airports, sea ports, and train stations but goods can also be bought duty-free on board airplanes and passenger ships.

The competitive landscape of the industry has also been examined along with the profiles of the key players being Aer Rianta International, China Duty Free Group Co. Ltd., Dubai Duty Free, Dufry, Duty Free Americas Inc., Gebr. Heinemann SE & Co. KG, James Richardson Group, King Power International, Lagardère Travel Retail, Lotte Duty Free, Sinsegae Duty Free and The Shilla Duty Free.

Erik Juul‑Mortensen, President of the Tax Free World Association (TFWA), was also positive, an outlook largely based on the latest available travel data. Noting that, with the exception of China, every major market in the Asia‑Pacific region has partially or completely reopened to vaccinated travellers, he added, “Many markets have seen a strong recovery in March and April, and with pent‑up demand or ‘revenge travel’, two markets have just exceeded their 2019 duty‑free revenues for the same period, namely Australia and Singapore.

“This has happened despite the total number of travellers remaining relatively low. Duty‑free members have been reporting higher basket value, driven in part by pent‑up demand and less store congestion, and, therefore, more attentive service by store personnel. The pandemic has forced the industry to consider and adapt to a still‑changing environment. Our priority in duty free and travel retail is to keep pace with, even to anticipate, those new expectations. They will continue to evolve, and so must we.”

On duty‑free spending trends, Sunil Tuli, President of the Asia-Pacific Travel Retail Association and Group CEO of King Power Group, agreed, saying, “Around the region, we have reports of increased spending per passenger. Every day there are more people travelling – for instance, here in Singapore, Changi Airport passenger traffic more than doubled in April from March, approaching 40% of pre‑pandemic levels, just one month from when borders were fully re‑opened to vaccinated travellers. However, across the board, significant pain points exist in terms of stock shortages, security delays in product screening, partial retail space re‑openings, low staff levels, a reduction in routes, recession fears, and the Russia‑Ukraine crisis driving inflation.”

The likelihood of impending recovery in the duty‑free industry was championed by Pedro Castro, Chief Operations Officer Asia‑Pacific of travel retailer Dufry, who said, “Markets such as the US, the Caribbean, Central America and Europe have already seen a return to about 60% of 2019 levels, with only Asia‑Pacific still lagging behind at about 10%. Domestic travellers in some markets around the world are already slightly higher than 2019 levels, and business travellers are close to 2019 levels. The Asia‑Pacific region is ready to support a rapid return to normalcy.”

Ashish Chopra, CEO of Delhi Duty Free Services, provided a deep dive into the Indian market, an analysis likely reflective of the air‑travel and duty‑free industries across Asia‑Pacific markets – if not now, then in the near future, saying, “In the past two months, we have seen sales reach 90% of pre‑pandemic levels on the back of 70% of passenger traffic. There is definitely pent‑up demand, and we expect Delhi to reach 2020 levels by this year.” For now, the passengers were business and high‑middle‑income travellers, and therefore were willing to spend more, with mass‑market travellers expected later in the year.

According to a new report published by Allied Market Research, titled, “Airport Duty-free Liquor Market by Type: Opportunity Analysis and Industry Forecast, 2021-2027”, the airport duty-free liquor market size was valued at $8.9 billion in 2019, and is projected to reach $10.4 billion in 2027, registering a CAGR of 22.22% from 2021 to 2027. The airport duty-free liquor at airport shops have become a favourite destination for travellers who like to shop before starting their journey. This is due to the elimination of local import tax or the duties implemented by the government bodies.

The key players operating in the global airport duty-free liquor industry are Brown-Forman, Diageo, Erdington, Bacardi, Heineken, Glen Moray, Accolade Wines, Constellation Brands, Inc., Remy Cointreau, Pernod, and Ricard.

The airport duty-free shops have become a favourite destination for travellers who like to shop before starting their journey. This is due to the elimination of local import tax or the duties implemented by the government bodies. This results in lesser pricing of liquor or any other products such as cosmetics, perfumes, souvenir, and others, which are available at duty-free shops.

Due to Covid-19 crisis, there is a decrease in international travel, which has affected airport duty-free sales in large proportion. As the lockdown continues in major parts of the world, airport duty-free retailers have unsold stock, while some retailers are finding imaginative ways to keep trading. As the travel retail sector market is temporarily on hold, airport duty-free liquor has experienced crucial sales channel cutoff. Airport duty-free liquor sales declined to large proportion due to the closure of international flight operations.

By type, the whiskey segment accounted for the second maximum share in 2019, owing to increase in demand for whiskey across the globe.

For the past few years cognac has gained universal recognition as one of the finest spirit, which is distilled from grapes. Cognac is also getting popular in the airport duty-free liquor market due to the recent surge in demand for premium liquor.

By region, Europe accounted for the highest revenue in 2019 owing to the tourists from the Middle East, China, the U.S., and Russia contributing a significant part in the market. Also, love for travel is experiencing an upward airport duty-free liquor market trends among Germans, which significantly contributes toward the growth of the market.

‘The Youth will be finished’

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Supreme Court on illicit liquor related deaths

•             Spurious liquor claims over 50 lives in Bihar

•             Bihar Chief Minister says no compensation to families of victims

•             Supreme Court pulls up Punjab Government for illicit liquor trade

Illicit liquor deaths in India are not uncommon. The 50 plus deaths in Bihar due to consumption of spurious liquor has sparked off a debate on prohibition too, vigilance, affordability etc. The stance taken by the Bihar Chief Minister, Nitish Kumar that ‘jo piyega, woh marega’ has been criticised by the opposition saying that instead of cracking down heavily on those manufacturing spurious liquor, the Chief Minister is taking a high moral stance.

Nitish Kumar, Chief Minister of Bihar

Not just the youth will be finished, but all those who consume illicit liquor will end up in a mess. Even while the Supreme Court made the remark recently on the flourishing illicit liquor trade in Punjab, in Bihar, where prohibition is in place, the death toll due to consumption of illicit liquor had crossed 50 at the time of writing. The deaths were reported from Saran district. 

The Chief Minister of Bihar, Nitish Kumar is obstinate about continuing prohibition, despite the frequency of deaths due to illicit liquor. He said in Hindi ‘Jo piyega, woh marega’ (one who drinks, will die) and added that prohibition had helped so many families. The Chief Minister categorically stated that no compensation would be paid to the families of those who had died in the liquor tragedy.

To boot Bihar has a Minister for Prohibition and Excise, Sunil Kumar who dismissed the tragedy, stating that “Rumours are being spread by some political parties or people with vested personal or political interest that hooch tragedies are happening in the state because of prohibition. We want to clarify that hooch incidents have no relation with the ban on liquor.”

Sunil Kumar, Minister for Prohibition and Excise

The Chief Minister said, “Even when there was no liquor ban here, people died due to spurious liquor – even in other states. People should be alert. As there is a liquor ban here, something spurious will be sold due to which people die. Liquor is bad and shouldn’t be consumed.”

Prohibition gives room for illicit trade

Deaths due to consumption of illicit liquor is a common phenomenon in Bihar and elsewhere too, but the governments are turning a blind eye to the situation. Earlier in March this year, 42 persons died and in 2021 the number of deaths reported due to illicit liquor consumption was 95 in Bihar. It was in 2016, Nitish Kumar who has been Chief Minister for seven times, introduced prohibition, taking a high moral ground and termed all those who drink as ‘mahapaapis’ (great sinners) and ‘not Hindustani’ which as head of state did not augur well for a trade which, besides adding to most State coffers, has evolved itself with great responsibility and sophistication. Yes, there are black sheep that run the illicit trade, which can be weeded out jointly by the industry and regulators.

The tragedy has led to war of words and the opposition, particularly BJP, has got a handle to drub the government on how prohibition has not only failed, but also led to rise in illicit liquor trade. The Union Minister for Panchayati Raj Giriraj Singh has urged Nitish Kumar to reconsider the prohibition policy, claiming that it has failed in checking illegal sale of spurious liquor, resulting in frequent deaths, and a rise in crime linked to it.

Last year alone from January 2021 to October 2021, the Bihar government registered a total of 49,900 cases in different districts after conducting special raids under the State Prohibition and Excise (Amendment) Act-2018. It seized a total of 38,72,645 litres of illicit liquor. The Bihar Police in an official statement had mentioned that a total of 12,93,229 litres of country liquor and 25,79,415 litres of foreign liquor was recovered and confiscated in the state.

During the operation, 62,140 accused were arrested and 12,200 vehicles were confiscated. Of the total accused, 1,590 people arrested did not belong to the state. The five districts, which were on top in terms of liquor seizure were Vaishali with 45,63,59 litres of liquor, Patna with 35,00,85 litres, Muzaffarpur with 25,64,80 litres, Aurangabad with 23,25,42 litres and Madhubani with 22,37,67 litres. The five districts, which were on top in terms of arrests are Patna with 6855 arrests, followed by Saran (3872), Motihari (2832), Nawada (2814) and Muzaffarpur (2660). With mounting opposition, the Bihar Chief Minister has asked his officials to arrest the ‘big fish’ involved in manufacture of spurious liquor.

Nearly 4 lakh violators languishing in jails

As per media reports from Bihar, nearly 4 lakh people have been arrested under the prohibition law since April 2016, leading to crowded jails and courts which are stressed dealing with such cases. Most of those arrested are poor, unable to afford bail. Despite this, the illicit trade keeps attracting people into the network of clandestine trade.

With so many arrests and many of them languishing jails, while the big fish go scot-free, the Nitish Kumar government has proposed amendment to the Bihar Prohibition and Excise Act, 2016. The proposal is to give a ‘second chance’ to violators rather than punishing them straightaway.

Illegal ‘bhattis’ keep mushrooming

Bihar, Gujarat, Mizoram and Nagaland are the states where prohibition is in force and deaths due to illicit liquor consumption is not surprising. And Punjab where liquor consumption is high, illicit liquor trade is thriving and the Supreme Court recently castigated the government on how such trade was destroying the social fabric. A bench of justices M R Shah and C T Ravikumar asked the Punjab government to spell out specific steps taken to curb the production and sale of illegal liquor. Senior advocate Ajit Kumar Sinha, appearing for the Punjab government, assured the court that the state is taking action and had already destroyed over 13,000 illegal liquor ‘bhattis’ (distilleries).

“We are not concerned with A government or B government. So far as Punjab is concerned, the drugs problem is increasing. The youth will be finished. It is very unfortunate that this is happening. Who is the sufferer? The poor people. Illegal manufacture and transportation have to stop because it ultimately affects the health and the society,” the court observed.

36,000 FIRs registered in Punjab in two years

The top court was hearing a plea arising out of a September 2020 order of the Punjab and Haryana High Court that had disposed of a petition seeking transfer of some FIRs registered in Punjab in relation to distillation of spurious liquor, its sale and inter-state smuggling to the CBI. Sinha told the Supreme Court that over 36,000 FIRs had been registered in the last two years.

Bhagwant Mann, Chief Minister of Punjab

The bench pulled up the defence counsel stating “You (government) are only filing FIRs, but according to you in every gali and mohalla there is a ‘bhatti’.” “The state may also come out with a circular on effective investigation and enquiry…. that if any illegal bhatti is found, the concerned local police will be held responsible for not keeping a vigil,” the bench said. The apex court, which observed the poor were the worst sufferers of hooch tragedies, directed the Punjab Excise Department to apprise it about the particulars of certain FIRs that have been lodged.

The Punjab government’s excise department has filed an affidavit in the Supreme Court that it would introduce country liquor with an alcohol content of 40% as a ‘healthier alternative’ to illegally home-brewed liquor and spurious liquor. The Punjab government also told the court that an officer of the rank of Inspector General of Police would be deputed to investigate and monitor all cases registered under the Punjab Excise Act, 1914 and that circulars had been issued to all field units to ensure action against illegal liquor production and smuggling.

The petitioners had claimed in the high court that illegal distilleries and bottling plants mushroomed in the state where the liquor mafia continues to thrive. They also referred to the August 2020 hooch tragedy in Punjab where over 100 people had died owing to consumption of spurious liquor. There are hundreds of varieties of spurious liquor and they are sold under different names such as ‘Mahua’, ‘Narangi’, ‘Moonshine’, ‘Tarra’ etc. Most ‘bhattis’ make hooch using coarse Jaggery, local yeast extracted from plants, citrus peels from oranges, sweet lime, etc., and other fruits like wild berries, pears, apricot, peaches, water, methanol etc. are used. Further, it is reported that they add organic waste, dead rodents, lizards and battery acid to make it more potent.

782 deaths in India in 2021

Last year, India registered a total of 708 incidents of consumption of illicit/spurious liquor causing 782 deaths.  The maximum such deaths were reported from Uttar Pradesh (137), followed by Punjab (127); Madhya Pradesh (108) and Karnataka (104). The problem is more of spurious liquor. However, industry experts believe that prohibition aids illicit liquor trade, but add that unless governments deal with a firm hand such trade, deaths are going to continue, prohibition or no prohibition. The contention of the industry is that by lifting prohibition, consumers are spoilt for choice and that in a way can bring down casualties.

Illicit liquor trade is big not just in India, but in many countries due to the moolah it brings in for those indulging in it. As per a report, the ASEAN countries are forecast to have the highest consumption of unrecorded alcohol by 2025. “Illicit alcohol accounts for 90% of the alcohol market in Indonesia and 85% of the market in Vietnam.

– R. Chandrakanth

UK wants to say Cheers with Scotch despite tariffs

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In a recent visit to India, UK Ex-Prime Minister Boris Johnson decided to push for a Free Trade Agreement. The idea was to have fewer trade barriers between the two countries. In other words, an agreement that would help both countries ship products and services without excessive taxes.

For the UK Scotch whisky is the elixir perhaps because of Brexit. UK voted to leave the European Union and perhaps what went unnoticed was third of the country’s whisky exports -  £1.3 billion ($1.65 billion) worth actually, went to EU countries. Post-Brexit however, that isn’t the case. The move has cost the scotch whiskey industry £5 million ($6.3 million) every week. And now they’re being forced to work with every EU country independently. They have to deal with different shipping norms, separate customs requirements and a whole host of packaging regulations.

It turns out that all these issues have prompted the UK to think differently and find newer markets. First, they targetted Australia and struck a deal — to remove a 5% tariff on scotch whisky. Elsewhere the UK managed to obtain the coveted “protected status” for its whisky by inking separate deals with Japan, Norway, Iceland and Liechtenstein. This will protect their scotch whisky from imitation, misuse, or any other forms of intellectual abuse.

And the focus shifted to India, a country that consumes more whiskey than any other country in the world. One in every two bottles of whiskey is now sold in India and the UK wants to make up for the loss in sales in the European Union by growing its market in India.

The UK allows ALL imports of Alcoholic Beverages into the country to be taxed to NIL customs duty and this is not just from India, it’s from 70+ other countries, that supply AlcoBev to the UK. Similarly, the conditions about a minimum three-year maturity, type of substrate used, the absence of additives, etc. are all equally applicable to Whiskies from all supplying countries, including the UK. So, there are no India-specific barriers that some players are seeking removal of. On the other hand, India imposes customs duty of 150% on all imports of Alcoholic Spirits, from all countries including the UK (which has the largest share of such imports), says I P Suresh Menon, Secretary General, ISWAI (International Spirits and Wine Association of India).

But the whiskey definitely dominates the Indian market, almost contributing 60% of sales to the IMFL (Indian Made Foreign Liquor) segment. But if you’re a person who enjoys a glass every now and then, you’d know there’s a difference between Indian whiskey and Scotch whisky.

Scotch whiskey is typically of Scottish origin and made from grains - primarily barley. On the other hand, IMFL is made from molasses, a by-product of sugar production and grains. It is much cheaper. So in some ways, IMFL liquor outsells its foreign counterpart in a massive way. But there’s another roadblock for foreign manufacturers - Taxes! See, taxing liquor is a wonderful source of revenue for the Indian government. For instance, five southern states namely Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala generate 10% of their revenues from taxes on liquor sales alone. And you can see why they want to impose even higher taxes on imported liquor. In fact, import duties can go as high as 150% in some cases. And that means, even though Scotch Whisky imports in the country have risen 200% in the past decade, it still only commands a tiny 2% market share in the Indian markets.

Now imagine if the tariffs were removed completely. What would that mean for the UK and Scotch Whisky industry. Well market sources contend that the market share could reach as high as 6%.

And so you can see why this makes total sense for whiskey manufacturers in the UK. But do Indians benefit in any way?

Well, for starters Scotch Whisky will likely become more affordable and more Indian whisky producers will use more Scotch in their IMFL and will premiumise their brands to an extent that the difference between Scotch and IMFL would not be much different. So it will mean that Indian consumers will get a product as good as Scotch at a favourable price. But cutting importing duties could also bump up revenues for the government. For instance, last year, the Maharashtra government slashed excise duty by 50% on imported liquor. And it now expects revenue to rise by ₹150 crores — from the sale of imported scotch annually.

And finally, with over 19 million new consumers coming of “legal drinking age” each year, India is definitely a market that liquor makers would like to tap into. Guess it will be a win-win situation for consumers. The Indian government may be tempted to go ahead with deal as the possibility of revenues rising in a sustainable manner is a good possibility.

According to Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC apex body for domestic liquor firms), Vinod Giri, this FTA also holds significant importance for India in the scope of future trade with the United Kingdom as trade competitors like Bangladesh, Sri Lanka, and Pakistan enjoy duty-free merits under the UK’s generalised scheme of preferences. Indian liquor producers are keen to enjoy newer markets for their products in the United Kingdom but are hindered by the stipulation that whiskey exported to the Brits should be Grain based and aged for three years. At the same time, liquor produced in India is not aged.

  • Refined Oil (9.7% of all UK goods imported from India)
  • Clothing (9.6%)
  • Medical and pharmaceutical Products (5.6 %)
  • Miscellaneous Metal Manufactures (5.1%)
  • Textile Fabrics (5.0%)

All these products were the primary imports to India from the United Kingdom, but as the pact stands on the brink of either collapse or being executed after several reconsiderations. A recent list had brought forward 240 odd items which would face trade duty deductions once the agreement is executed. From this pool of 240 things, a few that stand out are whisky, cars, vaccines, basmati rice, wool, and tea premix. As of now, no indication has been released about the possible way out of the situation, but in the coming future, it’s possible that the pact might be passed with several reconsiderations and follow-up procedures. Currently, diplomatic negotiations of the highest level are going on between the countries.

Amid reports of the UK seeking massive tariff concessions on imports of scotch whiskey during ongoing free trade agreement (FTA) negotiations, liquor sector association Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the government strongly objecting to any plans to slash Basic Customs Duty (BCD).

A reduction in BCD, it said, will adversely affect Indian Made Foreign Liquor (IMFL) brands since imports already dominate the Indian alcoholic beverages market. CIABC has been part of several recent meetings hosted by the Ministry of Commerce with stakeholders before the trade talks with the UK.

“India exports just ₹5 crore worth of alcoholic beverages annually to the UK against an import of ₹1,300 crores. Exports to the UK constitute only 0.2% of India’s total exports of alcoholic beverages whereas imports from the UK are 24% of India’s total import of alcoholic beverages,” said Vinod Giri, DG, CIABC.

Giri further noted that “restrictive” trade policies are also hampering the growth of Indian exports. “While the export of alcoholic beverages from India stood at 7.3 million cases (9 litre each) in the year 2019-20, exports to the entire EU (including the UK) were less than 30,000 cases which consisted of Indian super premium malt whiskies,” he pointed out.

CIABC said that the United Kingdom should also remove restrictions such as a minimum three years’ maturation period for whiskey and rum, since it has been scientifically established that in warm Indian conditions, spirit ages 3-3.5 times faster than in the UK. Giri added that a BCD cut would skew the balance of trade.

A notion worth dispelling is that Scotch whiskies are costlier to produce; it is 50% more expensive to produce it in India than in Scotland.

In wake of the Indo-UK trade discussions, many ‘experts’ argue for reduction in tariff, particularly slashing custom tariffs on imported Scotch and on ‘Intermediate’ products which they say are nothing but high-strength, potable, undenatured ethyl alcohol used for bottling and blending in India.

They argue on three main grounds. One, that India has a large trade surplus in the category and can afford greater imports; two, customs duty reduction on intermediate products will encourage ‘Make in India’; and three, even if tariff is reduced the bulk of consumption will remain locally produced whiskies — so why bother.

This industry contributes nearly ₹250,000 crore in taxes and for most states it constitutes 15-30% of revenue. Customs duty is not even ₹5000 crore in comparison. Second, this industry uses agricultural products as primary raw material and nearly 50 lakh farmers depend on it. It provides employment to 20 lakh people. Any disruption will have widespread ramifications for the government, farmers and labour market.

The problem with the first argument is that it hides the true balance of trade on alcoholic beverages using a wider head of ‘Food and Drinks’. If one separates alcoholic beverages/products for human consumption from the wider clubbing of ‘Food and Drinks’, a very different picture emerges.

As per DGFT data for 2018-19, India exports only ₹5 crore worth of alcoholic products/beverages to the UK, against import of ₹1300 crore. Clubbing alcohol under a much bigger ‘Food & Drink’ category to claim favourable balance of trade is highly misleading.

The second argument is also a misconception. Scotch Whisky goes through two major stages of productions — distillation and bottling. The ‘Intermediate’ Scotch whisky is actually the output of the first stage, it has been produced and matured in Scotland. What happens in India is only bottling. Therefore, while incentivising intermediate products through reduced or zero duty will lead to an increase of usage of bottling plants in India, which will be a big loss for Indian farmers and manufacturers.

The third argument misses out on three vital points. One, in product categories with multiple price segments like whisky, consumers seamlessly shift to the next category up or down depending on affordability.

So, when a Scotch whisky is sold at a lower price it takes away consumers from products in the price segment, starting a domino effect that makes the domestic industry the net loser. Two, introduction of Scotch whisky at lower price attacks the profit driving end of portfolio of Indian companies, thus jeopardising their viability. Third, Indian premium whiskies like Amrut, Paul John or Rampur are now regarded amongst the best in the world but are unable to make the same headway in the domestic market due to an unsupportive regime and reducing customs duty further just will not help.

Another notion worth dispelling is that Scotch whiskies are costlier to produce. Rather, it costs at least 50% more to produce a whisky of similar quality in India than in Scotland. This is primarily on account of a higher cost of capital and higher taxes in India, interstate restrictions and higher evaporation losses.

Also, many states offer concessionary taxes on imported products, but reduction in customs tariffs cannot be done without removing compensatory state-based concessions as otherwise it will create a hugely discriminatory tax regime against Indian products.

If we talk about reciprocal duty concessions, the problem is that barriers put up by the UK are not tariff based but non-tariff ones. India, being a sugar producing country, has evolved whisky recipes based on spirit distilled from molasses. The UK does not accept this as it is not “recipe standards”. The result of these non-tariff barriers is that of the 70 lakh cases of whisky exported from India every year, the whole of the EU including the UK accounts for less than 30,000!

Indian industry is not against reducing customs duty on alcohol, but it should be in a phased manner and up to a point where it creates a level playing field.

Accordingly, it has put forward its recommendation to reduce import taxes, aggregate of customs duty and AIDC, from 150% to 100% now and to 75% in five years’ time. It has also recommended a threshold import price for taxation at $5 per bottle, and reciprocal concessions from the UK allowing whiskies from India to be allowed in the UK market as ‘Indian Whisky’ without minimum maturity conditions.

30 Best Bars India announces new category – Best Sustainable Bar

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A jury of over 50 industry professionals and bar enthusiasts from across the country are currently at work to create the long list of Top 100 Bars for 2022. Starting early November, a larger pool of more than 200 jurors will vote to rank the country’s 30 Best Bars, and also pick winners in 10 jury-nominated categories including Best Hotel Bar, Best Restaurant Bar, Best Independent Bar, Best Cocktail Menu, Best Bar Team, Best Bartender, etc.

The 2022 Jury Chairs for the 30 Best Bars ranking across various cities include names like Sanjay Ghosh (YouTuber and Director, Cocktails India), Rohan Carvalho (Founder and Partner, Bar Square India), Harinath Shanker (Director, Bar Masons), Puru (Drinks Enthusiast), Shatbhi Basu (Author, Managing Director & Owner,  STIR Academy), Shreya Soni (Founder and CEO, DSSC), Minoti Makim (CEO, Carpe Diem), Karthik Setty (Founder of Hyderabad Thirst Club), Kimberley Pereira (Marketing Director at Kade Communications),  Nolan Mascarenhas (Photojournalist, UpperCrust), Vaniitha Jain (Founder, The Perfect Pour) and Karina Aggarwal (VP, India Craft Spirits Co).

Incredible resurgence of bars

Speaking on the occasion, Vikram Achanta, Co-Founder of 30 Best Bars India, said, “India’s bar industry has been remarkably resilient over the past two years, and we are now witnessing an incredible resurgence – as new ventures are transforming the bar scene every day. We are incredibly excited to open applications for our third edition, with a new award category introduced to applaud sustainability innovations. We look forward to working with leading alcobev industry members to unveil our 2022 rankings.”  

This year the Best Bar Design Award, which commends bars that set new standards of excellence in design, interiors, and bar ergonomics will be voted on by experts of the bar design industry. Bar owners who feel they may have been missed out from being included in the 30 Best Bars India long list can self-nominate themselves on https://www.30bestbarsindia.in/enroll-your-bar/, with required information and photographs.

“When we started, we wanted to honour the country’s best bars and bartending talent. Today, 30 Best Bars India is on every bar’s radar, and they are constantly upping their game to be featured on our Top 100 and Top 30 lists. With our masterclasses, workshops, and cocktail carnivals, we are rapidly shaping India’s cocktail culture, and aim to be the go-to list for consumers to find the best watering holes in their cities,” added Radhakrishnan Nair, Co-Founder of 30 Best Bars India.  

Prior to the finale, 30 Best Bars India will also host immersive Masterclasses for the bartending community, cocktail workshops by renowned mixologists, and first-of-its-kind cocktail carnivals with specially curated cocktail menus from the world’s best brands across India. 

Co-founded in 2019 by Vikram Achanta and Radhakrishnan Nair of Bar 30 India LLP, 30 Best Bars India aims to raise awareness about the rising standards of Indian bars and beverages nationally, and on international platforms. 30 Best Bars India ranking of the country’s best bars in the previous two editions in 2019 and 2021 have included well known bars that have gone on to be part of international bar ranking lists over the last three years. To see the full list of bars and their rankings in 2019 and 2021 please visit: https://www.30bestbarsindia.in/. 

Raising the bar, indeed

Indian bars are stoked that some of them are making it in international rankings, something to cheer about. Some of the Indian cities have a vibrant cocktail culture, but never did they vie for international recognition. There are a couple of reasons for this trend, the first being those founding these heady bars are young, spirited, innovative and above all daring to dream. They are certainly raising the bar. Then there is the customer who is sipping his or her drink with finesse, with a lot of understanding and responsibly. The well-heeled traveller is one of the profiles of the customer, but then the internet of things, so to say, has given birth to a new breed of connoisseurs.

And when Delhi’s chic bar – Sidecar makes its entry into the World’s Best Bars with a ranking of 26, it certainly warms the cockles of one’s heart. Goa’s go to bar Tesouro which opened during the pandemic has just sneaked into the top 100 with a ranking of 99 in 2021.

In Asia’s Best Bars, Tesouro has taken the fourth place. The capital has three ranks in Sidecar – 14th; Hoot – 26th; Home – 30; and Bengaluru’s Copitas is at 44. And the industry believes that the number is going to swell.

Tesouro makes a splash

Tesouro, meaning treasure in Portuguese is a treasure trove in the coastal state of Goa which prides itself of the local brew – Feni. Tesouro in South Goa is a cool bar with Goan-Portuguese design elements and a very impressive bar and bar tending aficionados. The cocktail menu is a showcase of the bar team’s creativity with drinks such as Midnight Brekkie (gin, bianco vermouth, peanut butter, watermelon, strawberry) topping the ranks as the most popular drink. Tesouro certainly has made a splash as a new entrant in the international bar scene.

Sidecar – Racing away to glory

Delhi’s Sidecar has been winning accolades, thanks to the bar legend Yangdup Lama and business partner Minakshi Singh. The duo has positioned Sidecar as a ‘friendly neighbourhood bar’ in a happening place of Greater Kailash. The signature cocktails are something to toast too and Rohan Matmary has dished out amazing iterations of their namesake – the Sidecar.

Hoots – One might as well say ‘I care two Hoots!!’

Ranked 26, Hoots which is tucked away in Vasant Vihar in New Delhi is kind of pivot in the capital’s cocktail scene, kind of a pioneer having introduced a world-class cocktail programme, attracting the globe trotter and haute monde and who know what a fine cocktail is.

Home – Is where the spirit is

Ranked 30th, Home was previously a member’s club and only recently it opened its doors to the public at large who seem to be heading home, just by the whiff of it. The bar reminds one of a Parisian jazz clubs, but some of the offerings have a local flavour to it, making it a perfect fusion. Like a typical home, one can nurse one’s drink with a book in hand or just enjoy the music which wafts through without being loud.

Copitas gives a different flavour to Pub City

It is said to be Bengaluru’s watering holes, besides the many places such as Toit, Byg Brewsky etc. which have elevated the IT city to another level. Copitas is located on the 21st floor of the Four Seasons hotel and come rain or shine, the well-stocked bar leaves one tingling for more. Looking down at the city from that level has got more to do with the bartenders’ artistry than the city lights.

The cocktail culture is fast evolving in not just the Indian metros, but other cities and towns too. Yes, albeit a bit late on the international scene, but sure enough the bars are making waves.  

India and Australia seek boost in wine trade and access

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India and Australia have maintained a cordial relationship for many years, with bilateral trade between the two nations valued at $27.5 billion in 2021. The Economic Cooperation and Trade Agreement (ECTA) signed earlier this year has seen both nations looking to boost bilateral trade to as much as $45 billion by 2027. As Australia’s 9th largest trading partner, with a share of 43% of all wines imported from the Pacific region, stakeholders in the wine sector are now looking for avenues to introduce more premium Australian wines into the country.

Mr. John Southwell, Trade and Investment Commissioner and Consul, Australian Trade and Investment Commission (Austrade)

The recent lunch hosted by Austrade and Wine Australia at the Australian High Commission in India was the latest in a series of efforts to showcase the best of premium Australian wines to Indians. The lunch came as part of the Australian-Indian Business Mission 2022, featuring insightful interactions between crucial stakeholders, including Sarah Roberts, Regional Manager Asia Pacific, Wine Australia; John Southwell, Trade and Investment Commissioner for Agribusiness, Food and Beverage, Austrade, as well as wineries and other crucial stakeholders.

At the event, premium brands such as the Three Lions Cabernet Merlot, D’arenberg Stump Shiraz, Brown 1889 Chardonnay, and Shaw Smith Sauv Blanc were served. The aim was to showcase how these wines can become a household staple in homes because of their unique and rich tastes.

Australia’s strategic advantage as an isolated continent surrounded by the ocean lies in the fact that it has a diverse wine ecosystem, with more than 100 grape varieties and legacy vines aged 200 years and beyond because it was able to escape the devastation caused by phylloxera. One of the main highlights of the event was the video presentation by Sarah Roberts wherein she shared details of demographics and the profile of Indian wine drinkers.

Sarah Roberts, Regional Manager – Asia Pacific, Wine Australia

According to Tejaswi Rathore, Director, Communications, Austrade-South Asia, if there is one thing you can’t take away from Australian wine, it is variety and diversity. “Australian wineries work with so much freedom and innovation, resulting in a multiplicity of tastes and profiles. What this means is that each wine serves specific purposes. While the reds, especially the shiraz will go very well with Indian food, the consumer has a freedom to choose what works for him from one particular dish to another. This is why Australian wines are highly rated across the globe,” she says.

However, as much as Australia’s wine scene is diverse, it is not restrictive. There’s a conscious effort to continue to learn and adapt new ideas, knowledge, and technology from all over the world, fusing the experiences, and flavours from microclimates to create a truly rounded wine ecosystem. To adequately satisfy the tastes and cravings of Indian wine consumers and understand the best way to position their brands, a research team was put together to understudy the profile and demographics of Indian wine drinkers, and the result has been helpful in curating choice wines for the identified groups.

“What we need right now is for the ECTA agreement to come into force, so that Indians can gain access to these array of choice wines. Although our main focus is the tier one cities, we hope that every Indian that wishes can have a bottle of our finest wines whenever they please. We’re taking our awareness strategy across the supply chain to enhance visibility. There’s also the advantage of having great value for money without compromising the premium quality that the wine offers,” commented John Southwell, Trade and Investment Commissioner for Agribusiness, Food and Beverage, Austrade.

As the Indian population continues to make wines a part of their daily life, there’s confidence that there will be more Australian quality wines filling the cellars, bars, and cabinets in homes and bars across the nation.

Pent up demand in Global Duty Free markets, but there is caution

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The global duty free retail market size was valued at USD 35.87 billion in 2021. The market is projected to grow to 72.23 billion by 2029, exhibiting a CAGR of 9.17% during the forecast period. The global Covid -19 pandemic saw the Duty Free Retail experiencing lower-than-anticipated demand across all regions compared to pre-pandemic market exhibited a decline of 42.38% in 2020 as compared to 2019.

This market generates significant revenue for airports, airlines, tourism, and other travel-related industries worldwide. Total income from duty free and travel retailing. Duty free goods’ sales typically happen within international zones, and these goods can also be sold on ships or onboard aircraft with shoppers/travelers in transit.

The duty free retailing market is majorly driven by increasing growth of travel and tourism industry coupled with rising penetration of low cost airlines. Increasing sales alcohol and confectionery is a major factor driving the growth of the global market.

Travel retail revenues make a functionally important influence to the overall financing of airports, the maritime companies as well as their infrastructure. All in all, these physiognomies of duty free retailing pose distinctive offerings for the travelers by meeting their needs, generating revenues and in turn supporting the maritime and aviation transport infrastructure and their services. Duty free retailing has emerged in parallel with the expansion of sea and air travel.

Although, the use of perfumes and cosmetics has a long history, increasing demand for premium fragrances and cosmetic products has raised the growth of the global duty free retailing industry. Rising investments by the governments of several economies to set up duty free retailing centres to cater to international tourists is another key factor driving the global market. Perfumes and cosmetics as well as tobacco goods are expected to register the fastest growth over the forecast period owing to increased demand for international tobacco and cosmetic products. Travellers prefer tasting tobacco and other products of different countries and prefer purchasing them from duty free retailing shops. This is expected to drive the overall market growth.

According to the research, in 2021-22 lower prices vs the domestic market and value for money are consistently quoted across all segments, whether age groups, genders or travel purposes. Good value for money is a particularly significant purchase driver for seniors at 49% and millennials, 34%.

Convenience is also an important purchase driver for both seniors, 36%, Gen Z shoppers and leisure travellers (both at 23%). Another common purchase driver in travel retail in 2021-22 is loyalty to the brand, especially for seniors (30%) and females (26%).

Travel retail revenues make a functionally important influence to the overall financing of airports, the maritime companies as well as their infrastructure. All in all, these physiognomies of duty free retailing pose distinctive offerings for the travellers by meeting their needs, generating revenues and in turn supporting the maritime and aviation transport infrastructure and their services. Duty free retailing has emerged in parallel with the expansion of sea and air travel.

Although, the use of perfumes and cosmetics has a long history, increasing demand for premium fragrances and cosmetic products has raised the growth of the global duty free retailing industry. Rising investments by the governments of several economies to set up duty free retailing centres to cater to international tourists is another key factor driving the global market. Perfumes and cosmetics as well as tobacco goods are expected to register the fastest growth over the forecast period owing to increased demand for international tobacco and cosmetic products. Travellers prefer tasting tobacco and other products of different countries and prefer purchasing them from duty free retailing shops. This is expected to drive the overall market growth.

The research also analyses the importance of sales staff in influencing shopper behaviour. Sales associates have a significant impact on the decision to purchase and this varies quite considerably by customer segment as well as by region. The research reveals that the impact of the interaction has increased considerably in the wake of the pandemic as travellers set to the skies again.

Recent years have witnessed considerable demand for duty free alcohol across countries, notably in Asia. The diversifying consumer buying habits, rapidly increasing international tourist arrivals, and rising spending among the rising demand for premium liquor is creating heightened consumer interest in duty free alcohol worldwide at a macro. The alcohol category has also witnessed significant developments, most notably product launches, in recent years.  At a macro level, the growing demand for retail will boost duty free alcohol sales and other product types during the forecast period. Furthermore, the alcohol category is likely to encourage market key players to offer luxury and premium products.

The proliferation and introduction of new international airports across countries are creating lucrative business opportunities, in February 2021, the Airport Authority of India (AAI), an Indian governmental body that operates 125 airports saw revenues of USD 135.07 million (`987 crore) for the first phase of an international airport named ‘Dholera’ in Gujarat. According to Civil Aviation Ministry’s ‘Indian Aviation’s Vision 2040 claims that by 2040, India will have 190-200 operational international airports, while the top 31 Indian cities will have two operating airports. The fleet of 622 airliners to more than double to 2,359 aircraft by March 2040.

Numerous airlines across countries are expanding their international networks and establishing new airports as post the Covid-19 crisis.

Duty free markets are sensitive to exchange rates among countries. Although they operate in several countries with currencies including Euros, Dollars, and Pound, which have specific exchange rates, they are subject to global market changes exchange rate of a particular day. The currency exchange fluctuations in the global market may positively or negatively including retail chains that offer luxury goods, depending on the fluctuating exchange rate.

Based on type, the global market is segmented into perfumes, cosmetics, alcohol, cigarettes, and others. Internationally reputed distribution channels offer luxury perfumes worldwide. Affluent global travellers typically visit duty free retail chains that offer perfumes of internationally reputed Gucci, Giorgio Armani, Al Haramain Dazzle Intense, Belle, Signature Rose, Signature Silver, and Khulasat Al Oud. Perfume types, including Perfume or De Perfume, Eau De Perfume (EDP), Eau De Toilette (EDT), and Eau De Cologne.

Based on sales channel, airports, onboard aircraft, seaports, train stations, and others constitute the market segment worldwide. The mushrooming number of domestic and international airports across countries is favouring products. Various developments within the ‘airports’ category highlight the increasing number of duty free stores across airports in 2022, Flemingo, a Dubai-based global travel retail operator, and Adani Group, an Indian integrated business establish a duty free shop at the Thiruvananthapuram International Airport by mid-May 2022. This strategic move intensifying competition in the Indian market.

As the duty free & travel retail industry had hoped, 2022 has so far brought real signs of hope that the recovery in international travel is under way. The pent-up demand for travel, so often alluded to during the darkest days of the pandemic, is evident in all markets. But that demand is putting severe pressure on airport and airline capacity. And the reopening of some countries, notably in Asia, is only taking place at a gradual, even glacial, pace.

The duty free and travel retail market was hit hard in 2020 due to the sudden fall in tourism amid the Covid-19 pandemic. The tourism sector has already felt the negative impact of the pandemic on its performance much earlier. Globally, travel restrictions and measures started as early as January 2020. Domestic and international tourists limited their travel due to fear of contracting Covid-19, which reduced the number of domestic and international customers for this retail channel.

Duty-free and travel retail comprises a category in a growing list of ancillary offerings by airlines. For some low-cost and ultra-low-cost carriers, the growth in the scope and magnitude of ancillary revenues has become key to their operations, allowing them to offer lower ticket prices and stimulate the overall demand for air travel as a result. Furthermore, when compared to airport duty-free and travel retail, the duty free and travel retail sales generated by airlines are substantially smaller, both in magnitude and relative to the financial performance of the respective recipient.  

Alcohol Market Insights Report 2022 and Future Growth Analysis by 2026

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The number of alcohol consumers in India continues to rise on the account of rising urban population. Consuming alcoholic beverages has become a customary tradition for a majority of people residing in India’s urban cities. Changing lifestyles and increasing incomes are compelling them to consume alcohol on a frequent basis.

Future Market Insights recently published its study on India’s alcohol market, which estimated that more than `2.5 trillion worth of alcohol was consumed in 2016. The study further projected that consumption of alcohol in India is less likely to decline in the years to come. By the end of 2026, more than 14 billion litres of alcohol will be sold across India.

According to the report, revenues amassed from sales of alcohol in India will soar vigorously at 7.4% CAGR, and reach `5.1 trillion value by the end of 2026. In terms of volume, India’s alcohol consumption in 2016 has been estimated to have surpassed 8 billion litres and will grow at 5.5% CAGR in the due course of forecast period. An in-depth analysis on India’s alcohol distribution indicated that just above three-fourth of alcohol consumed in the country is government controlled. In 2016, alcohol distributed in India through open market sales made revenues worth over `400 billion. Meanwhile, about 550 million litres of alcohol was auctioned in India by the end of 2016.

The wine market in India is set to grow by USD 274.00 million from 2021 to 2026 as per the latest market report by Technavio. The report projects the market to decelerate at a CAGR of 19.78%. Also, the market to record a 29.30% Y-O-Y growth rate in 2022.

The wine market share in India is expected to increase by USD 274.00 million from 2021 to 2026, and the market’s growth momentum will decelerate at a CAGR of 19.78%.

The wine market share growth in India by the domestic segment will be significant for revenue generation. The demand for premium wine brands is increasing among consumers in India. Rising consumer preferences for smooth, rare, and innovative flavours of wine have increased, which has fostered the domestic production of wine. The rising demand for premium wine in recent years has led to an increase in the launch of innovative products.

India’s Alcohol Market: Report Highlights

  • Nearly two-third of India’s alcohol revenues will be accounted by sales of Indian-made foreign liquor (IMFL)
  • In 2016, more than 1,800 million litres of strong beer was consumed in India
  • By the end of 2026, white wine sales in India will have brought in an estimated `16.8 billion in revenues
  • Revenues amassed from sale of country liquor in India will have soared at 5.5% CAGR
  • Whisky will be the most-preferred type of alcohol in India, while sales of white spirits will grow at more than 11% CAGR
  • Key findings of the report, titled “Alcohol Market: India Industry Analysis and Opportunity Assessment, 2016-2026”, projected that Southern and Western states of India will continue to contribute to more than 80% of alcohol revenues through 2026. Bangalore’s SAB Miller India Ltd. and United Spirits Ltd., and Mumbai-based Tilaknagar Industries Ltd. and Allied Blenders & Distillers Pvt. Ltd. are key players partaking in the growth of India’s alcohol market.

Meanwhile, the consumption of alcohol will witness a considerable dip in India’s northern and eastern zone. Even still, a majority of alcohol manufacturers and suppliers in India are originating from New Delhi. Companies such as Carlsberg India Pvt. Ltd., SOM Distilleries & Breweries Group, Radico Khaitan Limited, Globus Spirits, and Jagatjit Industries Ltd. are based in and around the country’s capital. Shimla’s Mohan Meakin Ltd. and Daman’s Khemani Group are also recognised as some of the leading alcohol manufacturer in India.

Among every ten alcohol consumers in India, nine of them will most probably be men; leaving a slight chance that the tenth one is a woman. With more than 90% stake in India’s alcohol revenues, the country’s men will be offering over `4.7 trillion for consuming alcohol by the end of 2026. Likewise, Indian women are also likely to increase their contribution to the Indian alcohol market. During the forecast period, revenues accounted by sales of alcohol to Indian women will have soared at the fastest pace, registering a stellar CAGR of 8.6%.

The availability of online stores and online specialty retailers provides a wide range of choices to consumers in addition to online shopping conveniences.

The increasing use of online channels for purchasing products is likely to drive the growth of the wine market in India. The presence of strong online distribution channels and platform providers is expected to boost the growth of online sales.

The increase in the use of online sales channels is expected to create new opportunities for vendors where they can target customers without geographical boundaries, improve operational efficiencies, and provide customised products to consumers. Thus, the growing adoption of online sales channels will increase the profit margins of wine vendors, which, in turn, will drive the growth of the wine market in India.

The growing incidence of alcohol abuse and alcohol-related accidents, especially among the younger population, has led to many regulatory and social organisations launching campaigns against alcohol consumption and players to prevent this.

The increasing preference for non-alcoholic beverages, such as health drinks, is also affecting the growth of the market in the country.

The stringent advertising restrictions on alcoholic beverages, along with increasing campaigns against alcohol consumption in India, can hamper the growth of the wine market in India.

Consumption of alcohol containing molasses as key ingredients will remain higher in India. Grains will also serve to be a preferred raw ingredient used for producing alcohol in India. Although, production of alcohol through agricultural produce such as fruits and vegetable will remain negligent till the end of 2026. The report also anticipates that consumers will be more inclined towards buying Indian-made liquor – regardless of it being a foreign or Indian brand. Consumption of foreign liquor bottled in India is also likely to grow, but showcasing a marginal degree of increment.

Wine Market in India: Key Drivers and Trends

The increasing use of online sales channels is notably driving the wine market growth in India, although factors such as campaigns against alcohol consumption may impede the market growth. The research analysts have studied the historical data and deduced the key market drivers and the Covid-19 pandemic impact on the wine industry in India. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.

Key Wine Market Driver in India

The availability of online stores and online specialty retailers provides a wide range of choices to consumers in addition to online shopping conveniences. The increasing use of online channels for purchasing products is likely to drive the growth of the wine market in India. The presence of strong online distribution channels and platform providers is expected to boost the growth of online sales. The increase in the use of online sales channels is expected to create new opportunities for vendors where they can target customers without geographical boundaries, improve operational efficiencies, and provide customised products to consumers. Thus, the growing adoption of online sales channels will increase the profit margins of wine vendors, which, in turn, will drive the growth of the wine market in India

Key Wine Market Challenge in India

The growing incidence of alcohol abuse and alcohol-related accidents, especially among the younger population, has led to many regulatory and social organisations launching campaigns against alcohol consumption and players to prevent this. The increasing preference for non-alcoholic beverages, such as health drinks, is also affecting the growth of the market in the country. The stringent advertising restrictions on alcoholic beverages, along with increasing campaigns against alcohol consumption in India, can hamper the growth of the wine market in India.

This wine market analysis report of India also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.

This statistical study of the wine market in India encompasses successful business strategies deployed by the key vendors. The wine market in India is fragmented and the vendors are deploying various organic and inorganic growth strategies to compete in the market.

To make the most of the opportunities and recover from post Covid-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.

The wine market in India forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.

The wine market share growth in India by the domestic segment will be significant during the forecast period. The demand for premium wine brands is increasing among consumers in India. Rising consumer preferences for smooth, rare, and innovative flavors of wine have increased, which has fostered the domestic production of wine. The rising demand for premium wine in recent years has led to an increase in the launch of innovative products.        

Excise takes a hit in Delhi; Political battle between AAP and BJP

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• Delhi government discontinues Excise Policy 2021-22 from August 1, 2022

• 468 private liquor shops operating in the city, shut from August 1 as licenses expire on July 31

•  Mad rush at liquor vends as supply chain affected

It is a massive political battle out in the National capital between the Bharatiya Janata Party (BJP) and the Aam Aadmi Party (AAP) and the casualty has been the liquor industry. While the battle rages on, there is short supply of liquor and with private vends closing down, there is mad rush for liquor of whatever that is left.

As such Delhi was experiencing short supply of liquor for some months now, but the government did not really pull up its socks.

While the situation was such, came another shocker for the AAP government when its Chief Secretary on July 8 reported that there has been ‘deliberate and gross procedural lapses to provide post tender undue benefits to liquor licensees for the year 2021-22’. The Chief Secretary’s report also pointed out to prima facie violations of GNCTD Act 1991, Transaction of Business Rules 1993, Delhi Excise Act-2009 and Delhi Excise Rules – 2010. 

Based on the Chief Secretary’s letter and the corruption murmur in the capital, the Delhi Lieutenant Governor,
Vinai Kumar Saxena recommended a probe by the Central Bureau of Investigation (CBI). 

Alcobev industry at its wits end

The alcobev industry which had hailed the Delhi Government’s new Excise Policy 2021-22 is at its wits end with the political battle going on. Many industry experts had hailed the policy but had complained that implementation was the stumbling block.

AAP blames BJP for the crisis

However, the Deputy Chief Minister of Delhi, Manish Sisodia in a press conference has put all the blame on the BJP for the excise crisis, stating that private vendors were threatened by the Enforcement Directorate and the CBI, forcing them to shut shop. The BJP, on the other hand, has alleged that the Delhi Government had doled out licenses to private vendors on a quid-pro-quo basis, charging AAP of large scale corruption. The two parties are leveling charges against each other while the alcobev sector and the end-consumer has to bear it all.

Government vends would be revived: Sisodia

Manish Sisodia said that the government vends would be back from August 1 as private vends were ‘scared’ to venture into this business. The number of government vends, would not exceed 850. Stating that there was an orchestrated campaign by the BJP to fail the new excise policy, he said only 468 shops were running and that number would further reduce drastically from August 1. “Their (BJP) plan is to stop legal sale of liquor and promote illegal sale of liquor in which the BJP has stake of thousands of crores of rupees,” he said and referred to the Gujarat model where there is prohibition, but illegal liquor trade is strong, leading to illicit liquor, consequently to hooch tragedies.

Citing that the AAP government had planned it’s vends to cater to the population without exceeding the number of vends from 850, he cited how in BJP-ruled States the number of vends was higher, thus encouraging liquor trade, both legal and illegal. There was one outlet for over 4,000 people in Gurugram; one for over 12,000 people in Bangalore; one for over 700 people in Goa, while in Delhi it was one outlet for over 22,000 people.

Another reason for the BJP to derail the Delhi policy, he said was as the former feared that the state revenue would jump from `6000 crore to `9,500 crore which would mean the success of the new policy.

BJP holds Sisodia responsible

Meanwhile, the BJP has upped its ante charging the AAP led government of corruption to which the Delhi Chief Minister has termed it as ‘false and that the BJP was afraid of AAP’s growth’. The BJP said the Excise Department, which is headed by Sisodia, reportedly gave a waiver of `144.36 crore to the licensees on the tendered license fee citing pandemic as an excuse. 

Policy was to give enriching customer experience, now going back to government vends

The 2021 policy was to pave the way for a range of sweeping reforms to boost excise revenue, crack down on the liquor mafia and to improve customer experience. The Government wanted to provide a ‘decent standard of customer experience commensurate to the stature of the National Capital’ and one of the most noticeable changes was abolishing the iron grills in front of the shops. The policy amendment also allowed for online sales in sync with the ‘new normal’.  There is no mention of what would happen to online sales, considering that the supply chain itself is adversely affected.

Framework for grant of licenses

The process of granting of the license was to ensure equitable coverage so that there is no instance of un-served and underserved areas in Delhi including Non-Conforming Areas. The number of retail liquor vends had been limited to 849, including five super premium retail vends, but absolutely no Government owned liquor vends for IMFL/FL.

The policy had ended on May 31 but extended by two months offering the retail licensees chance to renew their licenses paying fees on the pro rata basis for the extra period. However, many license holders did not opt for the extension and shut shops as they were already finding it difficult to reach break even after paying high license fees, some liquor traders have claimed.

Then there was the issue of some retailers giving massive discounts up to 40% to consumers while some big players offered ‘buy one, get one free’ schemes. The government intervened and capped the discount at 25%, but some retail shops went beyond that, some in the trade have complained.

Excise policy extant vs Delhi Master Plan rules

Under the excise policy extant, each licensee had to open three stores in each municipal ward. However, out of 272 municipal wards, 100 were non-conforming where the shops could not open due to action by civic bodies against violations of Delhi Master Plan rules, officials said thus leading to inadequate liquor stores.

CIABC hopes the policy will be tweaked

As mentioned there were many good features in the policy but the government failed to implement. The Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC), Mr. Vinod Giri has said that the industry had taken up the matter with the Delhi Government to reduce the size of the zones as to make the trade viable. He said by doing that it would have reduced the financial stake of licensees, improved loss bearing capacity and prevented monopolies. He attributed the failure of the policy to bureaucratic apathy towards trade, while the policy per se was good, befitting a modern metropolis such as Delhi. He was hopeful that the policy would be tweaked, but right now the political din has taken over.

There have been many such niggling issues that the Delhi Government did not iron out, while it kept patting itself on its back that it had come up with a ‘great policy’ that eliminated corruption and sale of seconds liquor. But the reality on the ground has been different, where actions did not match the words the AAP government kept bandying about. The capital is going to be mired with this controversy for some time now. The alcobev sector awaits new directives, till then the end consumer will have to find ways to quench his or her thirst.

The Beaches and Bar destinations, the place to party

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For those who love the beach, and want to party, there are many options to enjoy on the beach.

For many sun seekers, visiting the beach is the reason they go on vacation. Sitting by the ocean with your feet in the sand is the hallmark of relaxation for many of us – especially over the past few years.

Beaches are love! The soft sand under your feet, the breeze running through your hair, the waves bringing sea shells on the shore and the open sky playing with shades of orange and blue. Beach bars are even greater! The soft sand under your unsober feet, the breeze running through your drunk hair, the waves bringing the most fascinating sea shells to the shore and the open sky soothing your high soul.

“Although last year was still far from ‘normal,’ these are the beaches travellers visited and loved more than any others,” said Christine Maguire, VP, Global Media Business at Tripadvisor. “Whether you’re looking for a trip where you can continue to social distance outdoors, or are comfortable heading to spring break, beaches are the perfect place to be in 2022.

Sparkling sands, cool sea breeze, beautiful waves, delectable seafood and lots of vitamin D – a beach vacation is all that and more! And considering that India has a long coastline, there are many beautiful beach destinations you can head to for a relaxing as well as adventurous holiday. Laze around, go for strolls, click fabulous pictures, collect shells, or get your adrenaline pumping with fun water sports.

Goa is one of the most popular beach destinations in the country, thanks to the many breathtaking beaches it has. Apart from the golden sands, palm and coconut trees and delectable seafood, the beaches here are famous for hosting thrilling water sports and amazing late-night parties.

Goa’s Bar Tesouro, emerged as India’s Best Bar for 2021. Tesouro (which means treasure or treasury in Portuguese), is flanked by Fire Fly in the otherwise serene Colva beach in South Goa. Over the last two years, it has gone on to become one of the most talked about drinking holes in the country, much loved for its cocktails including the famous Midnight Brekkie (made using gin, vermouth, watermelon, peanut butter, and strawberry compote). The bar was founded by Donovan Vaz, scion of a Goa liquor distribution family, who quit his racing car career to become a restaurateur, along with mixologist Arijit Bose.

Bar Tesouro’s ascension is part of the surging popularity of Goan bars over the last few years. As many as four others including Escobar, Miguel’s, Gunpowder, and For The Record Vinyl Bar made into the Top 30 bars list for 2021. Delhi, Mumbai and Bangalore each have six bars each in the list. Kolkata has four, Gurgaon three, and Pune and Hyderabad have one bar each.

Surrounded by Bay of Bengal and Andaman Sea, Andaman and Nicobar Islands are among the finest beach destinations in India. Pristine blue waters, sparkling silky sands and lush green vegetation attract beach lovers in droves. Besides relaxing in beach cottages, huts and shacks, and soaking in natural beauty, adventure enthusiasts can try different water sports here.

Lakshadweep, the smallest union territory in India, has 36 islands and some of the most stunning beaches. Apart from unique natural beauty, the islands have many amazing spots that attract tourists from far and wide.

Located about 140 km from Goa, Gokarna is perfect for those looking for something offbeat. The beaches here are beautiful, calm as well as affordable. The serene surroundings, coupled with many fun activities, make Gokarna one of the best beach destinations in India.

A popular beach destination near Goa, Karwar is a must-visit. The coastal town is located at the confluence of the Arabian Sea and River Kali. Tall palm trees, golden sands and pristine waters accentuate the beauty of the beaches here and make them ideal for nature lovers and peace seekers.

Popularly known as the ‘Queen of the Arabian Sea’, Kochi or Cochin is one of the best beach destinations in India. This small coastal city is peppered with picturesque beaches that serve as perfect retreat from urban din.

Dotted with beautiful palm-lined beaches, the union territory Daman and Diu is a popular getaway in the western part of India. It is located near Gujarat and frequented by those seeking peace and quiet. The horse-shoe shaped Nagoa Beach in Diu is one of the best beaches for swimming in India.

Located on the shore of Bay of Bengal, Puri is known for some of the best beaches in India. Puri Beach is especially known for its wild waves.

Mahabalipuram majorly famous for its ancient temples and UNESCO World Heritage Sites, this historical town in South India is also one of the best beach destinations in India. Mahabalipuram lies on the shore of the Bay of Bengal and is a popular weekend getaway for people in Chennai, thanks to its proximity to the city.

Marina Beach, which is the longest beach in India and the second-longest in the world, is in Chennai. The sight of the evening sun from the beach, slowly disappearing into the ocean, is an awesome experience.

One of the four metropolis siblings of India, Chennai was known for being cautious about adopting the ever-popular trend of catering to the new age party-goers as the rest of India. But as the years went by in the last decade, Chennai became a hub for a multicultural and more importantly a very hardworking workforce of Indian youth. To meet their needs of letting loose after a hard day’s of work, a lot of pubs, clubs and bars – both fancy and commonplace now dot the capital city of Tamil Nadu.

Visakhapatnam, popularly known as Vizag, is one of the best beach destinations in India. The city is located on the east coast and boasts pristine seashores, sparkling blue waters and lush greenery.

Boasting a long coastline with many serene beaches, Mumbai is a delightful destination for travel enthusiasts. Juhu Beach, one of the most famous beaches in India, is in the heart of Mumbai.

The darling city of high-end parties, nights refuse to fizzle out here in this cosmopolitan giant. The city is especially known for the Hindi film industry, Bollywood. Juhu and Bandra are two of the most important spots where the crowd comes to every night, but other than these there are other parts of the city where partying is an option.

Located on the Konkan coastline, Ganpatipule is one of the best beach destinations in India for nature lovers and serenity seekers. The town has a long shoreline with many pristine beaches.

Kolkata is a wonderful destination for different kinds of travellers. And if you love beaches, this populous metro city has some beautiful ones along its 158 km long coastline.

Once known as the party capital of India, the party spirit of Kolkata took a hit after several political uprisings in 2010. However, it is only for so long that you can put a cap on the nightlife of Kolkata. Kolkata now hosts a range of artistic bars, old-school restaurants and gorgeous Instagram-able cafes. The city’s vibrancy of culture, art and history is so unique to Kolkata that can’t be seen anywhere else in India. So let your hair down and paint the town red in this beautiful city of artists and dreamers!

Fondly known as Pondi or Pondy, Pudducherry (formerly Pondicherry) is a little town with a big heart. Formerly a French colony, this beach town is known for its calm vibes, low cost liquor and delectable cuisine. Groups of friends, couples, old timers and small and large families alike, take to the streets and sit by Promenade Beach to watch the waves crash at the shore. The plethora of street food carts stationed across the town cater to the hungry mouths after sundown.

In terms of nightclubs, the city does have many to offer as it still continues to grow in that regard. And almost all of them strictly function only till midnight. But many backpacker friendly hostels and stays allow their patrons to party later than midnight and have a great time.

This small and serene union territory is known for some of the best beaches in India for honeymooners. You can unwind on the popular beaches here and spend quality time with your partner.