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India Travel Retail Market

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GROWTH, TRENDS, COVID 19 IMPACT AND FORECASTS (2021-2026)

Travel Retail is the next great frontier of the Indian Retail Sector, and as people’s incomes rise, India’s position as a business powerhouse and tourist destination will also continue to solidify, leading to the growth and prosperity of this industry.

Covid-19 has all but wiped out the travel industry in India and the passenger numbers continue to be affected in India even in 2021 owing to existing lockdowns and restrictions in the wake of the second wave of the pandemic. In 2020, less than 3 million foreign tourists visited India with a dip of around 75% when compared to 2019 due to travel restrictions imposed. The Covid-19 outbreak is impacting duty-free shopping behaviour, spend, and browsing likelihood on a category level, with this being particularly the case with luxury items in India. As a result of the pandemic, shoppers have moved to online shopping in greater swathes than before, and several travel retail operators, including Delhi Duty-Free, have introduced new online retail services facilitating home delivery of travel retail exclusive and duty-absorbed products.

A combination of a large and growing population, increasing air connectivity, inbound tourism, and the growing disposable incomes and propensity to travel internationally by India’s middle class are some of the major factors fuelling the growth of India’s travel retail market.

As per a research, it is estimated that nearly 80% of the country’s duty-free shoppers are Indians which is quite unlike other markets in the region, such as Korea or Thailand, where most duty-free sales are from international travellers rather than local travellers. However, this is likely to change with the growth in international tourism in the country. While India accounts for only 4.8% of the Asia Pacific region’s total international tourist arrivals, its year-on-year growth rate has been well above the region’s average in recent years and as of 2019, India attracted nearly 17.9 million international tourists. The changes by the Indian Government to its e-visa regime are simplifying procedures, making it friendlier to international tourists and these developments will further help in the growth of India’s travel retail market.

The growth of e-commerce can be seen as part of a broader digitalisation of the travel industry in India and especially airports. This is in part due to younger profiles of travellers, growth of low-cost airlines, and airport privatisation. The introduction of Goods and Service Tax (GST) has decreased the cost and time of logistics and interstate transport which has made the Indian retail market more lucrative for foreign investors who can invest in single brands, multi brands, wholesale/ cash and carry, e-commerce and duty free.

Travel Retail is commonly used to describe the duty-free retail industry, in addition to all retail activities dedicated to travellers and tourists. A complete background analysis of the Indian Travel Retail Market which includes an assessment of the economy, market overview, market size estimation for key segments, and emerging trends in the market, market dynamics, and key company profiles are covered in the report. The Indian Travel Retail Market is segmented by Product Type into Fashion and Accessories, Wine & Spirits, Tobacco, Food & Confectionary, Fragrances and Cosmetics, Others (Stationery, Electronics, Watches, Jewelry, etc.) and by Distribution Channel into Airports, Airlines, Ferries and Other Distribution Channels. The report offers market size and forecasts for the Indian Travel Retail Market in terms of value (USD Billion) for all the above segments.

Airports Constitute the Major Retail Channels in India’s Travel Retail Market

Nearly 50% of an international airport’s revenue is generated from duty-free and travel retail activities and in terms of sheer size and range offered, the duty-free retail areas at Indira Gandhi International Airport in Delhi, Chhatrapati Shivaji International Airport in Mumbai are nothing less than high-end malls. The largest duty-free area in India is currently operated by Mumbai Duty-Free at Mumbai International Airport Limited (MIAL) followed by New Delhi International Airport Limited (DIAL) which is operated by New Delhi Duty-Free Services (DDFS). The duty-free revenue per passenger for New Delhi and Mumbai was the highest in India at USD 11 and 10 per passenger for FY2019.

The future of airport retail is defined by data, omnichannel, and personalisation. Online pre-purchase orders for airport pickup are more popular in the Indian market than anywhere else in the Asia Pacific region and there is a growing response by duty-free operators to the increasing flexible payment, ordering pickup, and delivery needs of customers. Delhi Duty-Free’s ‘Shop and Collect’ plan for instance offers an extra 10% discount to those who pre-book orders at the airport on their outbound journey and pick them upon return.

IndSpirit 2021 Awards underline quality of brands and packaging: Judges

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After two years of Covid, Indspirit 2021 Awards evaluation got underway with all seriousness.

It was indeed nice to see the coming together of professionals, after a two year lull, for the Ambrosia wine and spirits tasting sessions, as part of the Indspirit 2021 awards which is happening on December 17 in New Delhi. Five judges for the Ambrosia Alcobev products tasting and four judges for the packaging awards huddled together for two days to judge 252 brands. The eminent jury tasted different brands in all categories of whisky, vodka, gin, rum, brandy, craft spirits, wine and beer and the jury on packaging evaluated on various parameters.

Eminent jury panel

The eminent tasting jury comprised Dr. Binod.K.Maitin, ex-USL and an independent consultant; Graeme Bowie, President – Malt Plant, Piccadily Agro Industries Ltd; Ajoy Shaw, Wine Maker and consultant; Sheetal Kadam, Wine & Spirits promoter and independent consultant; and Bernard Schaefer, a veteran judge from Germany.

The expert packaging jury consisted of Pranav Bhide, Leo Burnett Creative Director; Prof. K. Munshi, former Head of IIT Design department and independent consultant; Dr.Santosh Kshirsagar, Dean of J.J.School of Applied Arts; and Shekhar Ambedkar, Assistant Director and Head of the International Packaging Centre.

Scope for new entrants

The alcobev industry in the country largely comprises of Indian made whisky which accounts for a sizable share in boosting the growth of this sector. Across segments, domestically produced brands account for a higher share of consumer preference and there is still significant scope for new entrants to gain consumer preference.

The spirits industry in India with over 60% preference for whisky, offers great untapped potential for growth. There are several opportunities within the domestic sector markets for Indian whiskies to grow. There is huge country liquor consuming audience base that is seeking better quality products and have been upgrading over the years. India’s relatively young population sees newer individuals/consumers added each year to the legal drinking age – wherein Indian whisky could become the entry point for this audience. There has also been a growth of women whisky drinkers aided by on-premises and retail environments. All of these factors indicate the scope to fully explore the Indian spirits market.

Internationally, markets with a large Indian diaspora as well as those having similar palette to the Indian consumer see a strong preference for Indian whiskies. Some of the world’s top-selling whisky brands come from India and find much consumer love, globally as well.

What the judges have to say about the range

Dr. Binod Maitin says Indian whiskies are predominant among the top whisky rankings based on volume of sales. Indian whiskies have a distinct identity due to the tradition of blending with neutral alcohol produced from cane molasses to produce extra neutral alcohol (ENA). Economy whiskies are made with ENA and flavourings, premium blended whiskies contain Indian and Scotch malts, and single-malt whiskies use only Indian malts. Neutral alcohol from grain has also been adopted by manufacturers, particularly for premium whiskies.

Graeme Bowie, opines that there is huge improvement in quality of the products, even in the economy category. “There is passion for quality.”

Ajoy Shaw is impressed with the huge variety of spirits available for the Indian consumer. The discerning consumer looks for good value, good quality and a plethora of options. Similarly, Sheetal Kadam is delighted to see the expanding range of spirits in the Indian market. The portfolio is ever expanding and good for the consumer who is now spoilt for choice.

Bernard Schaefer, a veteran judge, is always in awe of the brands presented at Indspirit competition, however, some don’t exactly make the mark according to him. One good thing, he says is that there is constant improvement in the quality of products presented every year.

Sensory evaluation

Talking about the competition, Binod Maitin says, “Sensory evaluation is used as the primary means of flavour control in the industry. This chapter describes the origins of flavour in whisky and the typical sensory methods used both during production and in consumer research. The panel is experienced and harmonised. Mistakes in samples are pointed out. Samples are provided for references.”

Graeme Bowie says the brands are fairly good, endorsing the same is Ajoy Shaw who feels that all brands can easily get a bronze medal and more. Sheetal Kadam believes that the quality is above average.

Technology driving change

Technology is driving change in operations and strategy – right from crop analysis to smartphones scanning product labels. Big data and analytics have also been major drivers for the alcobev industry when it comes to improving insights across the supply chain. Having in-place solutions to provide real-time insights can help identify the largest problems at hand and find ways to optimise production and maintain quality.

Analytics is beneficial

Additionally, when we look at operations and quality assessment, and analytics strategy can go a long way in helping run plants, raw material test analysis, blend inspection analysis, quality control, compliance, end of line quality analysis, hygiene assessment, and managing customer complaints. There are multiple visual and physical checks required across various stages, and because it is a restricted environment wherein companies are bound by various regulations, analytics can be extremely beneficial.

Quality of brands improving every year

Talking about the quality of brands on offer, Binod Maitin, who has created many succesful blends, says the alcobev brands are okay. Wines are a problem, he says because of storage issues. Graeme Hamilton opines the products are plausible. Ajoy Shaw believes all brands can do well in the market place. Sheetal Kadam says there is improvement to a large extent as there is demand for upgradation.

Packaging market to touch nearly $39 billion by 2026

The alcoholic drinks packaging market was valued at USD 29.84 billion in 2020, and it is expected to reach a market value of USD 38.87 billion by 2026, registering a CAGR of 5.06% during the forecast period (2021-2026). Globally, growth in disposable income, coupled with increased spending on recreational activities, is a major influencing factor that collectively lead to growth of alcohol consumption, which fuels the growth of the alcoholic drinks packaging market over the forecast period.

Major manufacturing companies in the alcohol industry follow attractive packaging formats, which include ceramic glass bottles, whiskey pouches, bag-in-box, bag-in-tube, etc. Changing consumer preferences are also affecting the market significantly. Over the years, growing awareness among the brand manufacturers about differentiating their alcoholic products based on the packaging is also expected to contribute to the growth of the alcoholic drinks packaging market.

Conventionally, European and American manufacturers are often referred to as the leading producers of alcohol beverages. However, with the rise in demand for Chinese beer and Japanese whiskey, Asia-Pacific is increasingly becoming a major market for alcoholic beverage production, creating a massive demand for alcoholic drinks packaging solutions.

Metal packaging growing market

Owing to various benefits offered by metal packaging, such as better hermetic sealing and high mechanical strength, there is a growing preference for metal packaging from the companies present in the alcoholic drinks packaging market.However, fluctuating raw material prices and implementation of stringent regulations on packaging materials used for alcoholic beverages may hinder the growth of the market.

Judging parameters

The judges looked at parameters such as unit pack, canister, graphics, new ideas and feel. This is what judges had to say on the brands that were presented for packaging, their sustainability and their comparison in the international market place.

Pranav Bhide said the first impressions of the packaging is its versatility. It is important for the brands to stand out. The buzz word in today’s world is sustainability. There is a sea change in the packaging of Indian liquor and it is towards Indianness. Indian brands can match international brands, but it is still not there.

Prof. K. Munshi says after two years of pandemic it is a nice feeling to be here for Indspirit and once again judging packaging. He felt that despite the pandemic entries this year are more and also there is qualitative improvement in packaging. “It was a tough time judging” and hoped that there would be more creativity. However, he felt there was no evidence of sustainable packaging. “Indian liquor industry needs to take help and take advice. Indian brand packaging has long way to go. We need to put in efforts in R & D and innovation.”.

Dr. Santosh Kshirsagar was of the view that this year’s packaging industry did not have much variety as compared to last year. “Indian liquor industry should have a different approach. Indianness needs to be reflected and must stand out in the market place. Sustainability is an extremely important world issue. We have not identified a value for it. It is not easy, but it is a fundamental issue. Caps of bottles are a sensitive issue.. There is a long tradition in design. India has traditional visual imagery. Futuristically it is possible to succeed with this imagery. We need to make a mark with packaging.”

Shekhar Ambedkar says he has seen at Indspirit a range of unique packaging and innovation. “There is uniqueness in materials and the future should be sustainable packaging and believes that regulation would help in that direction. This year there are very commendable glass bottles for beer, especially those with a special tint. Good design is also present. We have been matching international standards. Companies should work towards being unique and that will sell.”

Beam Suntory moves towards 2030 goal, launches Oaksmith in North India

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Following a massive success in various markets since its launch, Oaksmith, a premium Indian whisky and the Iconic portfolio from The House of Suntory – Yamazaki, Hibiki, Toki – and Japanese craft gin – Roku –  are all set to expand presence in North Indian states including UP, Haryana, Chandigarh, Rajasthan, Punjab and Delhi.

Beam Suntory, the global premium spirits company, has introduced a range of five premium spirits in markets of North India, signaling its commitment and strategy to grow in India in line with its ambition to reach USD 1 billion in revenue by 2030. Continuing the momentum after launching successfully in pilot markets in 2019, the entry of five premium brands in North Indian market is a huge stride for the company to tread strongly towards its 2030 ambition. The launch of Oaksmith in North India is key to Beam Suntory’s growth strategy in India.

“India is a strategic market for Beam Suntory, and we are thrilled by the appreciation that Oaksmith, Toki, Hibiki and The Yamazaki have received from consumers in India. The growing premiumization of the Indian market and the appreciation for finely crafted spirits make this an exciting time to expand the launch of these brand in India. Indians today are exposed to global trends, which inspired the creation of Oaksmith for whisky lovers in India,” says Neeraj Kumar, Managing Director of Beam Suntory India. On Oaksmith and Oaksmith Gold, he said, “The beautiful blend incorporates our East Meets west competitive advantage and incorporates years of tradition that the Beam Suntory family upholds while showcasing Shinji-san’s award-winning blending capabilities making it a whisky that, quite simply, no one else could possibly create. We are excited to launch our brands across North India with its diverse offerings in terms of culture, people and places. We see a growing opportunity for premium quality spirits across these states”

Top Bar Trends for 2021

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The top bar trends for the new year include creative ways bar owners are adapting to save their businesses and preserve bar culture.

Off-Premise Alcohol Sales

For bars and restaurants that serve alcohol, off-premise sales will be an essential bar industry trend in 2021. Many businesses have already dipped their toe into alcohol takeout options, but the new year will see a surge of off-premise alcohol sales. The pandemic gave this already growing segment a boost and we expect breweries, distilleries, and beer distributors to get in on the action. Off-premise sales can take several forms:

Cocktail Kits – These drink kits are popping up on takeout menus everywhere. The perfect kit contains all the ingredients, and sometimes the tools, needed to create signature cocktails at home.

Growler Pours – Regulations on growler fills vary by state, but where allowed, growlers provide a safe option for beer enthusiasts to enjoy craft beer from their favourite brewery.

Adult Slushies – These boozy slushies are the adult version of your favourite childhood treat. States like Pennsylvania allow the sale of these frozen cocktails for takeout. To-go cocktail containers and supplies make it easy to send customers home with adult slushies or mixed drinks.

Whole Bottle Sales – Liquidation of liquor inventory was a knee-jerk reaction when the pandemic hit, but whole bottle sales by bars and restaurants are predicted to continue in the new year.

Alcohol Delivery

The intricate laws governing alcohol delivery were loosened in the last year, giving bars and restaurants in some states the opportunity to offer alcohol options on their delivery menu.

The demand for alcohol delivery will only continue to grow in 2021 as the expectation for convenience climbs ever higher. To take advantage of this trend, bars and restaurants may have to jump through a few hoops to make sure they are abiding by state and local regulations.

Curated Subscription Services

If the theme of 2021 is “drinking at home” then curated subscription services are another bar trend that helps to connect bar owners with their customer base, beyond just basic alcohol delivery. Some bars have kept their bartenders employed by putting them to work on cocktail subscriptions that channel their mixology talents into a slightly different medium.

Breweries are partnering with subscription services like Tavour, an app-based business that notifies subscribers immediately when new, highly rated craft beers become available for shipping. For wine bars, a hand-selected bottle with a handwritten note from the in-house sommelier makes a special monthly subscription box for wine lovers. These types of services will continue to become more creative and more sought after in the new year.

Digital Shops and Merchandise

Branded merchandise is nothing new for bars, but you can expect a more sophisticated digital shopping experience in 2021. For many bar websites, the merchandise page used to be an afterthought with a limited product offering. Standard merch might include a branded t-shirt, a shot glass, and maybe a beer glass or two.

Bars will be upping the ante and making improvements to their merchandise selection to include branded growlers, bar tools, and high-quality apparel. If customers can’t visit their favourite watering hole, they can show their support by bringing a little piece of the bar into their home.

Craft Canned Cocktails

The canned beverage trend was already quite popular when the pandemic gave it an even bigger boost. Now canned hard seltzer and canned rose wine aren’t the only stars of the show. Ready-to-drink cocktails in a can are an appealing bar trend for a few different reasons.

For one, the quality of canned cocktails has vastly improved and you can expect a perfectly blended drink that rivals a made-from-scratch cocktail. Also consider the safety benefits of offering your customers a pre-packaged beverage verses a hand-mixed cocktail. To top it off, a canned cocktail is a convenient option for imbibing in the comfort of your own home.

Premium Products

Quality over quantity is another common theme for 2021. All the time spent in quarantine has resulted in many drinkers becoming quite educated about mixing their own cocktails. This has a far-reaching impact on the industry because educated consumers expect the best and they’re willing to pay for premium spirits and ingredients.

Bars can take advantage of this shift by offering a smaller cocktail list that features local, sustainable, or top-shelf spirits. Use illustrative drink descriptions on your menu and don’t neglect the mixers. Premium bar ingredients like homemade bitters and infused simple syrups can elevate the cocktail experience even more.

Outdoor Drinking Spaces

The past year has shown that outdoor activities are safer than indoor activities, which has left many bars looking for ways to create outdoor drinking spaces. The question becomes, how do you provide an outdoor drinking space when you have no available space? For bars located in certain parts of the country, the outside temperature alone is a huge obstacle to overcome.

In 2021, bars will become more creative with their approach to outdoor drinking. Alleys, parking lots, and sidewalks will be transformed into temporary drinking spaces and remodels to balconies and rooftops will increase. To battle the cold temps and create an outdoor winter destination, bar culture will start to include a different type of BYOB in the form of bring your own blanket.

Advanced Online Ordering

Online ordering is a big part of the pivotal shift to reduce contact in the hospitality industry and allow consumers to perform most functions digitally. As the platforms designed for online ordering become more advanced, we will see enhanced options for bar service.

Instead of ordering drinks directly from a bartender, online ordering and digital payment can be performed by mobile phone to reduce person-to-person contact. In the past, online ordering was commonly used prior to arriving at the destination. In 2021, we’ll see online ordering being used as a method of ordering drinks and food onsite.

Social Media Presence

Social media is the gathering place where many go to feel like they are connected. With the present challenges imposed by the pandemic, an increased social media presence provides a way bar owners can connect with their customer base in spite of an onsite closure. But in 2021, maintaining a social media presence goes beyond just making regular Instagram updates.

Weekly video tutorials that put the mixologist front and center help to keep customers loyal to their favourite bar. Videos can be posted for free or offered as a subscription service to increase revenue. Many bars will start offering digital gatherings like wine or whiskey tastings in conjunction with an alcohol purchase so customers can follow along virtually.

For bar owners in 2021, the stakes are much higher than they’ve ever been. The bar industry trends that will shape the future bar scene are being adopted out of necessity rather than a need to keep up with changing fads. Diversifying revenue streams and providing safe, convenient methods of serving will continue to dominate bar culture for the unforeseeable future.

Prohibition, Illicit Alcohol and lessons learned from Lockdown

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The highly contagious and lethal nature of Covid-19 forced governments worldwide to rapidly implement measures to stem the spread of the virus. In pursuit of social-distancing objectives, closing large parts of economies, implementing work- and school-from-home restrictions, and even imposing personal stay-at-home quarantines quickly became the new normal. At the same time, governments were challenged to keep alive industries that they had locked down, buoy the economy and maintain employment for millions of people who might otherwise be forced into the already swollen ranks of the unemployed.

Achieving public health goals while avoiding the economic and social consequences clearly presented a paradox to policymakers rarely if ever witnessed before.

Within this mixed bag of emergency measures is the case of forced restrictions on the production, sale and consumption of alcoholic beverages, otherwise known as dry laws and collectively a modern version of prohibition.

Supply restrictions incentivise illicit markets and criminal activity

Sudden restrictions in access to legal alcohol create a downward shift in supply that causes increases in the demand for illicit substitutes and incentivises illicit suppliers to enter the market to meet that new demand. In the case of outright bans/dry laws, consumers are prevented from purchasing legal products and pent-up demand has no other option than to shift entirely to illegal markets.

This report provides evidence on both consequences. For example, customs and police officers in India reported a significant increase in consumers’ demand for illegal liquor and an uptick in seizures of illicit product. This trend repeated in Mexico, India, South Africa, Panama, Colombia, Namibia and Sri Lanka, all of which imposed prohibition measures on alcohol.

Furthermore, in South Africa the Institute for Security Studies reported an increase in criminal activity and that criminal networks active during the pandemic had added illicit alcohol to other illegal products they offer clandestine customers, such as narcotics. This trend was repeatedly observed in most places where dry laws were imposed, consequently, boosting criminal activity and shifting markets further into the control of illicit actors.

Beware of associated consumer health risks

Perhaps the most alarming consequence of alcohol prohibition measures was the exposure of consumers to health risks associated with toxic illicit alternatives. Beyond the fact that these illicit substitutes do not comply with sanitary, quality and safety regulations, the most hazardous are contaminated with toxic chemical additives.In the worst cases, people died from consuming illicit beverages as a substitute or as a perceived remedy to Covid-19.

In other cases, they were driven to engage in harmful behaviours, such as alcohol looting and panic buying, all of which undermine social distancing objectives and their exposure to the Covid-19 virus.

Therefore, the sombre lesson about prohibition and illicit alcohol is found in the collective harm, serious injury and reported death counts.

Prohibition reduces tax collections and constrains budgets

Taxes collected on alcohol at various points along the legitimate supply chain are traditionally an important source of revenue for many governments. Consequently, a fiscal priority is to stop the revenue leakages associated with the sale and consumption of untaxed illicit alcohol.

During the pandemic, tax and revenue authorities from India, South Africa, Colombia, Sri Lanka, Mexico, United States, and Kenya, for example, all reported significant drops in taxes collected on alcoholic beverages.

Consequently, the lesson learned from lockdown is that governments that implement draconian supply restrictions on the alcoholic beverage sector end up depriving their own treasuries of much-needed fiscal revenue. While it is difficult to imagine that Finance Ministers would be surprised by this result, perhaps this situation highlights the need for Finance Ministers and Health Ministers to improve coordination, consultation, and joint impact assessment of proposed laws.

This report also finds that in addition to the immediate drain on treasury revenues, negative impacts on future fiscal collections can be significant. The longer legal businesses are sidelined, the greater is the opportunity for illicit traders to capture market share and fortify demand for their untaxed, unregulated products. Under these circumstances, regaining revenue losses can take years, especially if there follows a period of economic depression and high unemployment.

In all cases, reduced tax revenue resulting from a government’s own alcohol prohibition laws puts extra burdens on its ability to pay for policing criminal activity, including cross-border smuggling activities, that underpins illicit trade. Mounting expenses in the face of declining revenues put considerable strain on government budgets at a time when fiscal stimulus is needed most.

Prohibition sidelines legitimate businesses and depresses formal job opportunities

Emergency restrictions on alcohol production and sales have had an outsized impact on legitimate industry, jeopardizing long-term employment and growth, while fuelling a parallel underground market that further harms the legal sector’s ability to rebound once restrictions are lifted.

While it is challenging to evaluate the full effect of prohibition laws on an industry that employs millions of people in primary and secondary sectors, any job losses – especially those lost via a government’s own alcohol bans – are particularly debilitating in countries where the overall unemployment rate is already high. Taking South Africa as an example where prohibition measures have had severe impacts, it is estimated that over 165,000 South African jobs were lost during the first alcohol ban.

A few words about the post-pandemic recovery

As governments move from crisis management to recovery planning, the findings from this report suggest that valuable lessons from alcohol prohibition can usefully shape the most constructive and inclusive ways to build back economic activity, employment and growth.

The alcoholic beverage sector and its multiple and varied secondary industries are significant contributors to GDP and employment – and tax revenues – in virtually every economy worldwide.

Because of this, the sector will be an important part of the recovery. But governments should think twice about sudden increases in excise taxes levied on alcoholic beverages as a means to replenish budget shortfalls. A quick fix approach could end up being as reckless as the imposition of prohibition laws, resulting in lower consumption of legal beverages, smaller pools of tax collections and an increase in demand for untaxed, cheaper illicit alternatives.

Moreover, policymakers would be wise to note that this sector and the people who work there have already been particularly hard hit by prohibition measures. Governments must anticipate that prohibition sidelines legitimate businesses and depresses formal job opportunities.

There are a great number of alternatives to increasing excise taxes, and consideration should be given to a portfolio of time-proven regulatory measures that can complement taxes, not undermine them.

Ensuring accessibility of regulated taxable products will generate legitimate and significant levels of tax revenues. Governments cannot collect taxes on products that are not sold or on illicit products that exist outside of tax regimes.

Imposing sanctions on the bad actors that supply markets with fakes or smuggle contraband across borders will help plug fiscal leakages by disincentivising the supply of illicit, untaxed products.

Increasing consumer awareness about the harms of illicit alcohol is an important measure that governments can use to steer people away from harm and into the legal, regulated and taxable marketplace.

In all cases, the result can be greater tax collections on a larger pool of legal, taxable product – with the knock-on value of economic growth and reduced consumer risk.

Government actions need to be carefully considered and finely balanced in dealing with the challenges associated with Covid-19.

The conclusions of this report, for example, delineate four lessons for avoiding the negative consequences associated with the imposition of alcohol prohibition laws. They also suggest the value to Finance, Trade and Health Ministers of improving coordination, consultation, and joint impact assessment of proposed laws.

There is also a role for private and public partnership dialogue on ways to prevent illicit trade. If new restrictive measures are being considered, governments should consult and cooperate with industry to ensure that any restrictions are temporary in nature, proportionate and sustainable. Any such measures should be accompanied by appropriate public health messaging and reinforced by responsible retail standards.

Governments must also ramp up implementation of enforcement measures to ensure that illicit trade activities caused by the pandemic do not become permanent features of the post-pandemic economy. All stakeholders have an interest in stamping out illicit trade in alcohol and all benefit from collective action.

In the face of a health pandemic, such as Covid-19, it is recommended that governments: Avoid prohibition laws as emergency response measures to protect people from the spread of virus. The benefits are conjectural, while the negative consequences are many and counterproductive to interdependent health, employment, and economic objectives.

Ensure availability and access to legitimate products that conform with social-distancing objectives without inducing demand for illicit substitutes.

Avoid the imposition of “emergency tax” increases on alcohol. A quick fix approach could end up being as reckless as the imposition of prohibition laws, resulting in lower consumption of legal beverages, smaller pools of tax collections and an increase in demand for untaxed, cheaper illicit alternatives.

Ramp up implementation of enforcement measures to ensure that illicit trade activities caused by the pandemic do not become permanent features of the post-pandemic economy.

Best places for Drinking Around the World

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While drinking at night is very popular, day drinking during Covid times has also gained traction. There are a huge variety of day drinking destinations and beverage options around the world, from public parks in South Korea to cozy bars in Belgium to the beaches of Brazil. We look at some of the best drinking destinations in alphabetical order, first by country and then by city.

Mendoza, Argentina is ideal for day drinking

The entire Mendoza wine region is designed for day drinking, with its affordable wine tastings, winery lunches with wine pairings and beautiful weather year-round. But the creme de la creme of Mendoza winery lunches is the five-course lunch with (bottomless!) wine pairings at Bodega la Azul in the Uco Valley.

Yerevan, Armenia

The best things to do in Yerevan, Armenia, is drink wine. Saryan Street is the city’s “wine street”, famous for its Karas Wine. A great atmosphere for getting work done while enjoying a glass of wine or two.

Maffra, Australia

On a sunny day, both locals and visitors love to do some weekend day drinking by meeting up with friends, sitting around and trying some of Blue Gables’ amazing wines. There is nothing better than sipping from a chilled bottle of Moscato wine, sharing a wood-fired pizza and relaxing in this chilled-out environment.

Melbourne, Australia

There is no better way to spend a sunny day drinking in Melbourne, Australia than sipping prosecco outside at one of Melbourne’s many famous bars.Light, bubbly and refreshing, prosecco is the perfect drink to linger over as you relax in the sun.In recent years, Australian producers have mastered the art of Italian prosecco and you can find their drops all over town. The Australian proseccos come from the King Valley region, produced by Italian migrant families Dal Zotto and Pizzini. A seat at Arbory Bar on the Yarra River, next to Flinders Street station, offers a change of scenery and a unique venue in the middle of the river. Ponyfish Island is where your prosecco adventures in Melbourne continue in the shade of the Southbank bridge. It’s the kind of quintessential hidden bar that Melbourne is known for.

Sydney, Australia

The Bondi area in Sydney, Australia is the perfect place to day drink among other cheerful day drinkers. This is mainly due to the Bondi beach and Bondi Junction areas being popular with backpackers who don’t need much of an occasion to get their party on. It’s a popular pastime for the working holiday-makers in Sydney, who often start day drinking after an early finish on a Friday. This can continue throughout the weekend and culminates in the Sunday session which starts sometime on Sunday morning and ends when the pub closes.Most pubs in the area open early and have a very casual feel so you needn’t get dolled up for day drinking session.The ideal day drink in Bondi is beer and wine is also perfectly acceptable for those of us who can go the day-drinking distance on the vino.

Brussels, Belgium

A mere 20 minutes from the bustle of Brussels’ Grand Place, you’ll find the commune of Saint Gilles. Described by its mayor as the place where the world comes to meet, it’s an opportunity to see the real Brussels, Belgium. Here, alongside fabulous Art Nouveau buildings by the architect Victor Horta, you’ll find life lived among friends and family. You’ll find that life plays out both around you and with you in the bars of Saint Gilles.If you’re a fan of Belgian beer, then there are plenty of choices to sit back and enjoy day drinking in Brussels with a favourite brew. One popular venue is Union and Egalite which keeps more than 90 beers in a long bar studded with chandeliers. Make a day drinking date with a glass of the splendid Orval, and feel the sheer pleasure of being in Brussels.

Rio de Janeiro, Brazil

Without a doubt, the favourite location for a spot of day drinking is Copacabana Beach in Rio de Janeiro.Either way, Copacabana Beach is awesome at all times of the year. And the drink of choice is Caipirinha. This is the most famous cocktail anywhere in Brazil. It is made from a spirit called cachaça, which comes from sugar cane. The cocktail is very simple to make: simply crush ice, lime juice and brown sugar, and then mix in some of the cachaça.Capirinhas are incredibly refreshing and very, very cheap to get anywhere in Brazil, making them perfect for day drinking in the hot sun.

Calgary, Canada

Although it’s not your typical cocktail, any good Canadian will tell you there is nothing like a Caesar to kickstart your day drinking session. Caesar is its birthplace, Calgary, Alberta.Think of a Caesar as the spicy, wilder cousin of a Bloody Mary – vodka, hot sauce, Worcestershire sauce, and Clamato juice (yes, that’s clam and tomato juice!), served with a celery salted rim and typically topped with delicious garnishes such as pickled beans, asparagus or olives. But don’t let the clam juice throw you off! This cocktail is super popular across Canada.

Ontario, Canada

For a day of activity visit Prince Edward County, Ontario, for a craft brewery tour by bicycle. The County lies a few hours outside of Toronto, and is an increasingly popular craft beer hub for locals and tourists alike.Prince Edward County (PEC) is farmland-turned-wine and beer region with a vibrant art scene and food that compliments it. As the day wears on, try Grandpa’s Coffee Stout at Parson’s as you relax in oversized Muskoka chairs. If you like sour beers, 555 Brewery is for you with its Jail Cell Sour Series. Their pizzas are delicious.Finally, end your day of beer and biking at Sandbanks Provincial Park in PEC. Here you’ll find Ontario’s white sand beaches lining some of the clearest freshwater in the world. It’s the perfect place to have a campfire and toast some marshmallows, and maybe enjoy a couple more evening brews as you relax beneath the stars.

Havana, Cuba

Havana, Cuba is known for its nightlife, but the truth is Cubans also love to drink rum during the day. Most tourists spend their time in Old Havana, which is a gorgeous and home to several bars claiming that Hemingway once drank there, but the more modern side of Havana, is where the locals go drinking.A good spot for day drinking in Havana is Playa del Estes, just outside of the city center. This beach is where locals visit on weekends. For a cocktail in Havana try 403 O’Reilly in Old Havana, a popular gin bar that also has other mixed drinks.

Český Krumlov, Czech Republic

Czech Republic is known for its beers. Český Krumlov is also filled with wonderful locations for an afternoon glass of local wine. The veranda at Papa’s Restaurant is ideal for a little picnic beside the Vltava River in the shadow of Krumlov Castle and indulge in some day drinking as you watch the kayakers pass by.

Épernay, France

Épernay is a great destination for champagne lovers. In fact, Épernay is the capital of the Champagne area! It is in Épernay where the most famous champagne brands like Moët Chandon and Mercier have their headquarters and vineyards, but there are also other independent champagne makers with interesting proposals.The champagne is produced in a very limited area, with very specific kind of grapes and a very specific process. Any drink produced out of this area or without following these rules cannot be called champagne; that’s why the champagne is so exclusive!Épernay is well connected by train, which makes of Épernay an excellent day drinking day trip from Paris or Reims.

Berlin, Germany

Beer is German’s drink of choice. Berlin, Germany is to join the locals for a frosty glass of cold beer, preferably at a sidewalk picnic table or another busy location that lends itself to people watching and meeting new travel friends.

Munich, Germany

Munich’s annual Oktoberfest festival is one of the best places in the world for some serious day drinking and a great party atmosphere.

Dublin, Ireland

O’Donoghue’s Bar is a historically significant drinking place located 15 Merrion Row in Dublin, Ireland. It is a popular pub that has attracted tourists from all over the world for over 50 years. O’Donoghue’s is known for its amazing, live, traditional Irish music, and it’s the place that introduced the popular band The Dubliners in 1960s. The bar is also frequented by other world renowned Irish traditional music bands and artists, whose pictures are displayed inside the pub.Considered to be one of the most authentic Irish pubs in the country, this bar does not only offer good entertainment, but also good drinks. A popular day drinking pub as well, O’Donoghue’s Bar is open from 10 am to midnight daily. There’s no better place to experience Ireland in an authentic way other than to gobble down a pint or two of Guinness while listening to traditional Irish songs.

Verona, Italy

Dining al fresco in the town square, dressed to the nines, wearing designer shades and sipping a great cocktail might seem like the ways of the rich and famous, but any Italian tourist can enjoy this day drinking tradition!Walk along the rim of Piazza Bra in the heart of Verona, Italy to see cafes filled with locals and visitor alike. Mid-day they might be enjoying antipasti, formaggio, or a late lunch, but in their glasses, many will sport the blood orange aperitif very popular in this region, an Aperol.Nicknamed “Ape” by the locals, this liquor can be served on the rocks, or more commonly in an Aperol Spritz – a combo of Aperol, Prosecco, soda and an orange slice. However you serve it, this drink is meant to be enjoyed during happy hour, to open your palate for the evening meal to come!

Negril, Jamaica

When you are in Jamaica you will always hear people say “give me a Red Stripe” when they are at the beach bar. They are referring to Red Stripe beer, the most popular beer brand in Jamaica.Negril Beach is a few miles of white sand beach dotted by hotels and the quintessential beach bars. You can basically work your way down the beach, stopping at the various beach bars to enjoy a Red Stripe beer or a rum. The beach bars are also a great place to people watch, enjoy the vibes and make new friends. At the end of your day drinking, you’ll get to watch the famous Negril sunset.

Maldives

Day drinking cannot get any better than on an exotic island resort in the Maldives. The Paradise Island Resort, otherwise known as Lankanfilnolhu in the north atoll in the Maldives, is a pristine white sand luxury resort island best for strolling around… with vodka, of course!The Maldives is a tropical country and it gets pretty humid during the daytime, so the best way to beat the heat is by sipping a coconut vodka cocktail. The extremely refreshing coconut vodka is served at the Hulhangu bar, a sea-facing bar at the Paradise Island Resort. To give it a more exotic touch, the drink is served in a traditional Maldivian coconut. The refreshing flavour of the coconut, mixed with vodka and topped with lemon and mint leaves, is the ideal beverage to drink on a sunny afternoon at the beach.Hydrating and refreshing, sipping a coconut vodka cocktail at the Hulhangu bar’s seafront porch is something that everyone should have the good fortune to experience.

Mexico City, Mexico

Xochimilco in Mexico City is a series of canals that wind around chinampas, or artificially created islands with small farms, sometimes referred to as ‘floating gardens’. Bright, gondola-like boats crowd the canals, manoeuvred by a driver with a long pole. A boat can fit up to 20 people, and you can rent one by the hour. Smaller boats weave around the bigger ones, selling all kinds of snacks and beverages.Michelada is a Mexican beer cocktail. A litre-sized soda cup is filled with lime juice and Dos Equis beer, then the rim is smeared with spicy Mexican tamarindo candy and chili powder.Mexican Tequilas too are world famous. Mezcal is a Mexican spirit made from agave. Tequila is technically a type of mezcal, but while tequila is only made from one type of agave plant (blue agave), mezcal can be made from 28 types of agave, including blue agave.

Amsterdam, Netherlands

One of the best places to enjoy a day of relaxing day drinking is in Amsterdam. It’s actually acceptable in the Netherlands to sit on a lovely cafe balcony and sip on a beer in the afternoon while you people watch and chat with friends. Luckily, you don’t need to only drink Heineken. There are lots of great cafes and beers to choose from. A favourite spot in Amsterdam is Brouwerij ’t IJ. This craft brewery in Amsterdam (next to a windmill!) is open all afternoon and closes early in the evening, so you actually need to get started early if you intend to sample their fantastic beers. Otherwise, you can head up to Amsterdam Noord to sample beers from the Oedipus, another great craft brewery.

Marlborough, New Zealand

The New Zealand wine region of Marlborough is superb area in which to day drink your way through a series of amazing wineries. You can easily rent a bicycle and cycle through ten wineries in a small area… or you can hire a driver and make it a heck of a lot easier. Whichever way you decide to go, Marlborough is a great wine region where Sauvignon Blanc dominates, but smaller grapes will win your taste buds.Here in Marlborough you’ll find small boutique wineries like Gibson Bridge Winery and the up-and-coming Wairau Cove, alongside internationally known Cloudy Bay, and if you want a beer at the end of the day, there’s always the craft brewery, MOA!

El Nido, Philippines

When considering the best places in the world for day drinking you’d be amiss to exclude El Nido in the Philippines from your list. El Nido is an eco-tourism hotspot with beaches are to die for and (very importantly!) the booze is cheap!When you’re sitting on the beach, being served chilled, fresh coconuts filled with generous amounts of Filipino Don Papa rum is the best experience.

Krakow, Poland

Hot mulled wine is quite popular in many places, but have you heard of hot beer? “Hot” and “beer” are two words that one wouldn’t normally associate together, but hot beer is actually is an interesting beverage and if you are visiting Poland, you must try it.Hot beer is served in most bars all over Poland. However, the bars in Krakow are especially popular.Wrega Pub is located in the Kazimierz area of Krakow, making it an ideal place to enjoy some day drinking after a spot of sightseeing.

Lisbon, Portugal

Ginjinha is a liqueur synonymous with Lisbon, Portugal. Made from Ginja or Morello cherries, sugar and fortified wine, it is the go-to drink for locals and visitors alike, and any visit to Lisbon would be complete without sampling at least one Ginjinha in Lisbon.The famous cherry liqueur was drunk by the late Anthony Bourdain when he filmed his television show, No Reservations, in Lisbon. Apparently, he enjoyed a number of glasses of Ginjinha with the locals.Porto’s most famous tipple is undoubtedly port wine. This sweet, fortified wine originates a few hundred kilometres upstream in the Portugal’s Douro Valley, but thankfully you don’t need to go far to start enjoying it. The cellars in Vila Nova de Gaia, just across the river from Porto, have been storing oak barrels of port wine for centuries.

South Africa

Wine tasting is a great excuse for day drinking, and it allows you to sample delicious wines in beautiful settings.Visiting South Africa’s Cape Winelands is the perfect excuse to start day drinking delicious wines early in the morning.

Soju in South Korea

South Korea is by far one of the best day drinking destinations in the world. South Korea is actually the country that consumes the most alcohol in the entire world, because of their great love for soju, a traditional Korean spirit. You will find day drinking to be a common activity among the locals. Most convenience stores have tables and chairs set up outside for people to enjoy their snacks, beer and soju any time of the day or night.

Girona, Spain

There is one form of day drinking that is perfectly acceptable throughout the Catalan province of Spain – taking a vermouth.Vermouth is a big deal in Catalonia, with Vermouth bars opening around 11:00 am, and closing around 3:00 or 4:00 pm. Vermouth is a fortified wine, served over ice, with a lemon slice and often an olive stuffed with anchovies on the rim. It is best enjoyed with a few little tapas, including a tortilla espanola, olives or anchovies.The best place for vermouth in Catalonia is in Girona, in the Costa Brava.

Malmo, Sweden

Winters in Sweden are a challenge. Enter Akvavit, or Aquavit, to the rescue. Aquavit is an alcohol that has been used to warm the Scandinavian body, mind, and spirit since the 15th century.Akvavit is distilled from grain and potatoes, and is flavoured with herbs and spices. It has a distinct flavour that admittedly has to grow on you. But once it does, yippee, as it provides a nice warm feeling to ward off the early darkness and short winter days.Not for the faint of heart, Aquavit is 40% alcohol by volume, or 80 proof by US standards. It will kick your butt and take you prisoner if you have too much.Still, Aquavit is such an important part of Scandinavian culture that it is used to toast weddings, graduations and Christmas dinners. Typically served as shot, it is consumed after singing a song, called a snapsvisa or a “schnapps song”.

Bangkok, Thailand

Bangkok, Thailand is good for many things – seeing all the temples, eating your body weight in pad Thai and spending the day in the sun with a Chang beer. And if you’re going to do this, there’s only one place to do it right: Khao San Road.

New Orleans, USA

While you can find daiquiris and Irish coffees anywhere, only the Tropical Isle Bar in the French Quarter sells Hand Grenades. The recipe for the Hand Grenade originated here in the late 1980s and is patented by its owners. The drink is frozen and sugary sweet, with a melon flavour, and it is served in a tall green container shaped like a hand grenade. This is all perfect to mask what it actually contains – vodka, rum, gin, grain alcohol, and melon liqueur!The Tropical Isle Bar even has its own mascot for the Hand Grenade and over a million drinks are sold every year!

San Juan, Puerto Rico, USA

When it comes to day drinking piña coladas, there is no better place to enjoy the pineapple, coconut and rum concoction than Barrachina in San Juan, Puerto Rico. Barrachina, a restaurant nestled in the heart of Old San Juan, claims to have been the birthplace of the piña colada in 1963. Be advised though, there is disagreement that the piña colada originated a few years prior at the Caribe Hilton.

Santa Ynez, California, USA

The Santa Ynez Valley in southern California, USA, is a fantastic place for drinking! The Santa Ynez Valley is a wonderful part of the world where the sun shines warmly for much of the year and winters are mild. The rolling hills are covered in vineyards and horse ranches. The quiet roads curl around between fields and buildings.This region is also renowned for its chardonnay and pinot noir grapes, and is home to around 120 wineries. Many of these California wineries open their doors to people who want to come and indulge in some wine tasting.

Sonoma County, USA

Wine is life in Northern California. The north part of the state is known for its vast range of wineries, wine makers and wine culture.Sonoma County is one of the spots that you can’t miss. If you are looking for a day of great wine, day drinking and some beautiful scenery, Sonoma County is the place to go. It is a short twenty-minute drive from the Santa Rosa Airport or roughly two hours from San Francisco International Airport. Bourbons, Tennessee whiskies are also popular in US bars.In India, Goa and Pondicherry are also ideal locales for drinking. Feni is a popular tipple of Goa. Mumbai, Delhi, Bangalore are big markets. Hyderabad, Chandigarh, Jaipur, Kolkata and Nashik are other popular cities for drinking.

Hotel industry recovers faster than expected post Covid 2.0: ICRA

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While the first few months of FY2022 were impacted because of Covid 2.0, the industry witnessed faster-than-expected ramp up in Q2 FY2022, because of lower restrictions, increasing pace of vaccination and pent-up demand, which resulted in revenge travel.

The industry is expected to clock at least 45-50% of pre-Covid revenues in FY2022. Further, it is also likely to report operating profits in the current fiscal, aided by improved operating leverage and sustenance of some of the cost-optimisation measures undertaken in FY2021. However, the situation is still evolving and remains contingent on the efficacy of vaccines and a potential third Covid-19 wave.

The industry has raised about `660 crore of equity in FY2021 and has announced `3,300 crore of equity/fund raising plans in FY2022. ICRA expects further equity fund raising/asset monetisation to support capital structure improvement going forward.

The hotel industry demand has recovered at a sharper pace post Covid 2.0 compared to last year’s lockdown, aided by the easing of restrictions in Q2 FY2022. Partial lockdown as well as travel restrictions in many states in April and May 2021 post the onset of Covid 2.0 resulted in the ICRA sample of companies reporting a 56% decline in revenues on a QoQ basis, in line with the ratings agency’s estimates. However, the revenues are expected to improve by 85-90% sequentially in Q2 FY2022.

Occupancy has picked up, with the August-21 Pan-India premium hotel occupancy at 44-46%. For 5M FY2022, the same is estimated to be 32-34% (up from 13-15% in 5M FY2021) vis-à-vis 46-48% in Q4 FY2021. The Pan-India ARRs are estimated at `3,850-3,950 for 5M FY2022 and still remain at a 25-30% discount to pre-Covid levels, although some high-end hotels and leisure destinations have even seen ARRs return to pre-Covid levels in Aug-21/Sep-21. Travel during the festive season will act as a key demand booster for the industry in Q3 FY2022.

Giving more insights, Ms. Vinutaa S, Assistant Vice President and Sector Head, ICRA Limited says, “While the first few months were impacted, the industry witnessed faster-than-expected ramp up in Q2 FY2021, because of lower restrictions, high vaccination pace and pent-up demand, which resulted in revenge travel. Demand in the last few months has come from staycations, weddings and travel to driveable leisure destinations, and from special purpose groups. There is the new trend of biscations (which is working from a resort) that is picking up. Business travel pickup has been mainly to project sites/manufacturing locations from specific sectors. The Covid-related demand which was prevalent April mid to June mid, waned from July and we are seeing real demand pick up. The situation is evolving, and sustenance of demand will depend on efficacy of vaccines and a potential third Covid wave. The industry is currently cautiously optimistic.”

Most markets reported over 50% occupancy in Jul-21 and Aug-21, the key markets – Jaipur, Goa, Delhi, Mumbai and Hyderabad displayed healthy occupancies whereas Bangalore and Pune lagged behind. The ARRs in leisure destinations were above pre-Covid levels in Jul-21 and Aug-21. Going forward, ARRs will be a function of sustenance of demand.

The demand recovery pattern has different from other crises, with properties with affiliated strong brands and in the luxury segment standing to benefit, as trust and safety are paramount. Drive-to leisure, staycations, social MICE/weddings and special purpose groups are expected to drive revenues for hotels for the next one year at least. International traffic arrivals will take time to pick-up and in the intervening period, demand will be supported by domestic travel. Hotels/cities dependent on business travel/foreign tourist arrivals (FTAs) will also take considerable time to recover.

In terms of supply, in the immediate term, temporary shutdowns are possible in affected regions, if there is a third wave. Acquisitions and industry consolidation are the way forward, and rebranding in the midscale and upscale segments will add to share of organised supply. Over the medium term, a part of pre-Covid supply may be permanently shelved, while there could be new properties coming up in leisure destinations.

“The hotel industry is expected to clock at least 45-50% of pre-Covid revenues in FY2022. Further operating profits in the current fiscal will be aided by improved operating leverage and sustenance of some of the cost-optimisation measures undertaken last fiscal. However, pre-Covid revenues and profits are likely only by FY2024. As a result of sustenance of some cost-saving measures, the breakeven is expected to reduce and hotels are likely to report pre-Covid margins of 85-90% of revenues going forward. Nevertheless, the situation is still evolving and as the estimates are contingent on timelines tied to the pandemic,” added Ms. Vinutaa.

Moratorium and ECLGS provided the much-needed financial support during Covid-19. About 70% entities in ICRA’s hospitality portfolio availed moratorium during the first wave, though it was only 39% of rated debt. Some companies also raised funding through equity and debt tie-ups before ECLGS announcement. However, debt metrics are expected to return to pre-Covid levels only over the medium term, while RoCE is expected to remain sub cost-of capital at least for the next few years.

ICRA continues to have a negative outlook on the Indian hotel industry, as the sustenance of the demand pickup in the recent months remains to be seen. A potential third wave and its impact on travel and hotel occupancies cannot be ruled out. Further, the RevPAR is still significantly lower than pre-Covid levels. About 63% of ICRA’s ratings are also on negative outlook currently.

According to new forecasts from IWSR, global beverage alcohol is showing positive signs of recovery, and is projected to grow in volume by +2.9% by the end of 2021.

Total beverage alcohol volume decreased by -6.2% globally in 2020, impacted by the near complete shutdown of bars and restaurants around the world. Though an unprecedented downturn, the -6.2% decline was less than previously forecast, as several factors ultimately helped the industry last year, such as: acceleration of e-commerce (up +45% from 2019, to reach US$29 billion in 2020), growth of RTDs, strong at-home consumption in key markets, and resilience and growth in the US and China.

Another pre-Covid trend that will continue to accelerate beverage alcohol recovery is product premiumisation. Though the economic impact of Covid-19 has led to restricted spending for some, alcohol is an affordable luxury for those willing to spend. IWSR forecasts that premium-and-above wine and spirits will increase by +25.6% in total volume 2020-2025 (compared to +0.8% volume growth over the same period for brands in lower price tiers).

By 2023, IWSR expects total beverage alcohol consumption to return to pre-Covid levels, with consumption steadily increasing through to 2025. Recovery will be boosted by the industry pivoting rapidly in key markets, the momentum of e-commerce and RTDs, and increasing sophistication of the at-home occasion in many markets. The two fastest-growing categories, according to IWSR forecasts, are no-alcohol spirits and RTDs.

“In many global markets, Covid-19 accelerated the impact and growth of key industry drivers, such as the development of e-commerce, premiumisation, the rise of the ‘home premise’, moderation, and the need for convenience in product formats,” says Mark Meek, CEO, IWSR. “These are the trends that will also underpin the industry’s resilience as it pivots to meet consumers where they are in the years to come. Additionally, across many markets, some segments of the population now have significantly more disposable income than they did in 2019, some of which will be spent on beverage alcohol products.”

As a result of the lockdown in India last year, total alcohol volume plummeted 30%, but the market is expected to rebound to more than 8% volume (CAGR 2021-2025). Spirits are predicted to rise by nearly 5% over the four-year period, while beer will increase by 13%.

Whisky sales in India declined by 16%, but the IWSR noted that ultra-premium-and-above Scotch witnessed growth, along with Irish and Japanese whiskies, where were boosted by rich consumers.

IWSR’s analysis of the outlook of the global beverage alcohol market also shows:

Tequila overtakes rum to become the third-largest spirits category in the US

The global tequila category grew by +9.6% in 2020, driven especially by gains in the US (the world’s largest tequila market) where tequila is now the third-largest spirits category in the country (behind vodka and whisky). Also, thanks in large part to the success of tequila, consumer awareness and interest in mezcal has also lifted that category, and agave-based spirits overall are expected to grow +4.7% (volume CAGR 2021-2025).

Whisky sub-categories have been more impacted by Covid-19, but show long-term resilience

Global whisky experienced a -10.7% volume decline in 2020, but the category is forecasted to rebound in 2021 and continue on its growth path, bolstered by the US and India. Whiskies are among the fastest-growing sub-categories of spirits: Irish whiskey will be aided by the return of the on-trade and strength of new entrants; growth in Japanese whisky and US whiskey will mainly come from both of their respective home markets. Most of the growth for Scotch whisky will come from delayed recovery in the key market of India and eventual revival of global travel retail, especially for premium Scotch.

Gin grows, vodka remains flat

Gin is forecasted to increase +4.5% CAGR 2021-2025, driven notably by Brazil, South Africa, and Russia, and also by brands priced premium-and-above (with this segment projected to grow +11.4% CAGR 2021-2025). Global vodka volume was flat last year and is expected to remain so through to 2025. In Russia, the top global market for vodka, consumers are trading down from premium vodka as a result of the impact of Covid-19, however in the US (the second-largest market for the category), vodka is projected to grow. In total, spirits are expected to grow +0.6% globally this year, and +0.8% CAGR 2021-2025.

Many consumers in key markets chose still wine as their go-to drink at home during Covid-19

Though wine consumption has been in decline, consumers in markets such as the UK, Australia, Brazil, Canada, and the US have lifted wine volumes. In Brazil alone, still wine grew by +28% in 2020, driven by a rise in higher-quality imports and increasingly accessible prices. Conversely, imported wine in China has experienced a steep decline which will contribute to an expected decrease in wine volume in the country 2021-2025.

RTD volume projected to increase by almost +27% in volume this year

RTDs posted double-digit global growth in 2020, resonating with consumers across all demographics, and driven by the trend for convenience, refreshment, and flavour. IWSR projects that RTD volume will increase by +26.6% in 2021, and +10.2% CAGR 2021-2025, driven primarily by growth in the US and Japan, as well as Australia, Canada, and China. In the US, where the hard seltzer sub-category of RTDs grew by +130% in 2020, RTD volume is already larger than the total spirits category, and by the end of this year, RTD volume consumption there will be larger than that of wine.

Top beer markets forecasted for growth

Beer was the most exposed category during lockdown, losing -7.1% volume globally in 2020. However, beer volume is forecasted to grow by +2.5% in 2021, and continue on its growth path over the forecast period (2021-2025). Except for the US, where RTD competition has considerably impacted beer sales, all of the top-10 global beer markets (by volume) are projected to show growth into 2025.

Alcobev Sector enhances customer delight, thanks to Artificial Intelligence

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In 2019, Swedish whisky distillery Mackmyra released Intelligens, said to be the ‘world’s first’ whisky created using AI. Mackmyra collaborated with Microsoft and a Finland-based tech company – Fourkind, and using customer feedback data, they created AI algorithms which picked up recipes that were a delight for the end-consumer.

Microsoft, IBM and other tech companies are active in alcobev

Microsoft, IBM and other digital technology players were making significant forays into the alcobev industry. And the big boys of the alcobev industry soon realised how transformative this could be for the industry itself. They had seen the dividends the retail sector was earning and one by one, they started introducing digital technologies in their processes and the going has been good. Microsoft pitched to Danish multinational brewer Carlsberg for the ‘Beer Fingerprinting Project’ and the two used machine learning to good effect. They fed with beer ingredient characteristics to map out and predict beer flavours, shortening the time it takes to develop new beers. Then there was US-based Sugar Creek Brewing Company which tied up with IBM to use AI to improve its beer manufacturing line where there was a monthly beer spillage amounting to $30,000.

Diageo’s ‘What’s Your Whisky’ is so so customer-centric

One of the global leaders in alcoholic beverages, Diageo launched ‘What’s Your Whisky Selector’, an innovative digital experience that has found favor and flavor with many a whisky connoisseur. What did ‘What’s Your Whisky’ do? It simply used AI and ML to analyse customer’s flavour preferences (variety of sweet, fruity, spicy and smoky flavours found in Single Malt whiskies) and recommended a Single Malt whose flavour profile most closely matched the customer’s taste. Customer delight is something no company would want to miss out on. Diageo rolled-out this experience in Great Britain, Germany, Austria, Switzerland, Spain, Greece, Belgium, Denmark and the Netherlands. Ok, it is not available in India which boasts of the largest base of whisky drinkers! Diageo said that intelligent automation is deployed in over 100 applications across its business. “Through predictive analytics, machine leaning and robotics process automation, we are growing more productive and more competitive.”Around the same time, other alcobev behemoths such as Beam Suntory, Bacardi, AB InBev, Pernod Ricard and others had also started putting their money on AI, ML and robotics to enhance manufacturing and operational processes and importantly on introducing a new dimension to customer experience.

A lot is brewing in AB InBev’s Beer Garage

Belgium-based AB InBev has something brewing in its ‘Beer Garage’ wherein machine learning is at play. AB inBev has invested in data-driven solutions to help improve beer brewing on the production side, while on the customer side, it is enhancing its customer engagement programme. The world’s largest beer maker (Budweiser, Stella Artois, and Corona) is using low-cost sensors and machine learning to predict malfunctioning in its brewery, getting to fix it before it happens and thus avoiding huge downtime. Beer Garage is scaling the company’s existing capabilities in AI, ML, Internet of Things, Cloud & data analytics, automation and robotics, and exploring emerging technologies such as Blockchain, AR & VR and others. Innovation at AB InBev drives its commercial strategy, supply chain, and is building sustainable business to improve lives in communities around the world. These technologies are providing the company with unprecedented insight into the needs of its consumers and customers and supporting the growth of the beer category.

Beam Suntory Mexico plant uses drones in agave fields

Beam Suntory, the world’s third largest premium spirits company, deployed drones and AI in its Casa Sauza project. Drones helped the company get an accurate inventory of the agave (Tequila) plants in the fields and to reduce the time it takes to complete the inventory. An AI process is applied to ensure only agave plants, not weeds or any other material, are counted. The inventory data is loaded and tracked in the Sauza Blue Harvest application and later transferred to SAP for SKU tracking. The drone technology is used to manage, monitor and increase crop productivity, and to assist in diagnosing the health and vitality of the agave plants. Beam Suntory is also using digital manufacturing from Rockwell Automation and Cisco to overhaul its business models, improve efficiencies, streamline logistics and update its network. “The future’s promising for Beam’s IT infrastructure and for our networks, and how we can leverage automation and productivity, improving our flavours and our brands. It’s very important to Beam, and I think we’re really moving forward in a good direction,” said Amon Hogue, Senior Network Architect at Beam Suntory.

Pernod Ricard Winemakers gets accurate grape yield

Early this year, Pernod Ricard Winemakers, the premium wine division of Pernod Ricard, took on board Complexica, a leading provider of AI software for supply and demand optimisation. It went live with Complexica’s Decision Cloud software platform in Marlborough, New Zealand in what is Pernod Ricard’s largest global technology project. It plans further go-lives in Australia for finished goods planning and production scheduling, followed by Australian and Church Road winery operations, which forms part of a wider programme of activity to enable the business to utilise technology to work faster, smarter and safer. Pernod Ricard Winemakers also engaged Trellis to support its business and supply chain operations by providing accurate grape yield, quality, harvest timing and procurement cost prediction across Australia and New Zealand.

Bacardi’s cool cocktail-making app

Bacardi this year launched a new cocktail-making app that has helped those who were dishing up new cocktail recipes during the pandemic. The app aims to reimagine the bar setting, besides giving bartenders a platform to showcase their talent. The app launched in the US and UK helped boost consumer confidence in making cocktails at home. Bacardi also signed up EPAM which streamlined the spirits manufacturer’s digital environment by implementing a digital platform for multiple brands including Bacardi rum, Grey Goose vodka, Breezer, Patron Tequila and more. The DevOps automation platform resulted in 16 times greater website development capacity, and a 42% reduction in infrastructure costs.

Digitization in alcobev still nascent

Though deployment of digital technologies is still in its nascent stages in the alcobev sector, there are a number of early adopters who have invested in digital technologies to not only create flavour profiles faster, but also for other functions, including packaging, logistics, marketing and other processes. It is no-brainer that AI has the power to transform the alcobev industry forever, albeit it is happening at a gradual pace. In fact, the pandemic has accelerated the pace of deployment of AI in the alcobev sector as online deliveries became common; home drinking was becoming the norm; and consumers were looking at new recipes. According to US-based FasTrax Solutions, total alcohol sales registered an increase of 25.5% in 2020, driven by digital marketing initiatives with AI at the core. It said in the US beer sales increased by 20.2%; wine by 30.1%; and spirits by 34.1%. Thanks to e-commerce, the sales figures are looking impressive in these difficult times. Also came along the virtual sommelier, guiding consumers on how to buy wine, how to grow vines and how to taste / judge them. In fact, some winemakers have started investing in AI in their vineyards wherein it gives insights into soil management, pest control etc. Experts believe that large vineyards will deploy drones to help growers manage their yield better. Robots will also be at work to improve efficiencies at the vineyard.

‘Smart factories’ the future

Capgemini, a global leader in consulting, digital transformation and technology services, has said that beverage manufacturing companies plan to build 40% more ‘smart factories’ in the next five years. It estimates that smart factories will contribute between USD 1.5 trillion and 2.2 trillion to the global economy. And what are ‘smart factories’? They are those that leverage digital technologies to gain significant improvements in productivity, quality, flexibility and service. Three key digital technologies enable the smart factor – Connectivity (collecting data from existing equipment and new sensors); Intelligent automation (drones, machine vision etc); and Cloud-scale data management and analytics. The alcobev industry, one of the oldest in the world, though maybe late entrant to the digitization mode, but has soon caught up. From robots to drones to AI to ML, technology is becoming a key driver for not just growth, but a new customer experience. After all, customer experience matters.

1 million cases in sales – Seagram’s 100 Pipers becomes the First and Only Scotch Brand in India to Smash the Record, yet again

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Seagram’s 100 Pipers, the largest selling Scotch whisky in India, continues to achieve bigger milestones and set new benchmarks in the industry. It has proven itself to be a market leader, thought leader, and innovation leader. In the last business cycle, Jul’20 – Jun’21, 100 Pipers has broken not one but two records.

100 Pipers became the first and only Scotch brand in India to cross the 1 million+ case mark in annual sales, twice – a solid stamp on the consumers’ love for the brand.

Adding to this success streak, the brand’s premium variant ‘100 Pipers Blended Scotch, Aged 12 years’ crossed 100,000 Cases in annual sales for the first time ever since its launch in 2012. A notable performance by the aged variant – it is now the largest selling 12-Year-Old Scotch in India, confirming that “Age Matters” to the discerning Indian scotch aficionado.

Asserting its dominance in the Scotch whisky market, the brand had recently launched a new variant ‘100 Pipers Blended Malt Scotch, Aged 8 Years’. This is the first & only ‘100% Malt’ Scotch offering in the Standard Scotch category – a game-changing innovation by 100 Pipers.

With a global footprint spanning eight countries across Asia, Europe, Africa, Middle East and South America, 100 Pipers brings a truly international experience to the Indian consumers, with the widest range of unique Scotch variants. It is also the second largest Scotch whisky in Asia.

Commenting on the multiple achievements, Kartik Mohindra, Chief Marketing Officer, Pernod Ricard India said, “100 Pipers continues to shape the Indian Scotch segment and set new records. This is driven by its increased popularity among the younger, aspirational consumers who are resonating strongly with the brand’s purpose-led initiatives due to their uniqueness, authenticity and credibility.

Like, the international award-winning Legacy Project – which showcases endangered Indian art-forms via Limited Edition Packs and provides tangible livelihood support to artisans. Recognised internationally and in India by some of the most prestigious awards in the world for creative excellence, The Legacy Project won the Bronze Pencil at One Show Awards (New York), Merit at D&AD Awards (UK), Bronze at Spikes Asia, and multiple honours at Kyoorius Creative Awards.

Also, the 100 Pipers Play for a Cause platform that has been leveraging music for many years to raise awareness and funds for various social causes like meals for underprivileged, flood relief, etc. in addition to supporting the partnering musicians.

In addition to trendsetting campaigns, the young, aspirational consumers have also taken well to the newly launched 100 Pipers Blended Malt Scotch, Aged 8 Years. This category-first 100% Malt Scotch seeks to give younger consumers a unique experience that welcomes them into the world of Malt Scotch. With the discerning consumer increasingly experimenting with Malts, this eclectic and premium scotch showcases its craftsmanship and heritage that dates back to decades of scotch whisky making.

Overall, our strong performance over the years is a testament to great product craftsmanship, category first innovations, our differentiated and aspirational brand communication, and purpose-led initiatives – all coming together to help us build greater stature esp. amongst the younger consumers.”

As the largest whisky market in the world, India’s Scotch segment continues to be highly aspirational for whisky consumers. With sales hitting bigger benchmarks across variants and a keen eye on leading innovation, Seagram’s 100 Pipers is poised to continue as the dominant force in the market.

Alcohol consumption patterns in India

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To start off, it has been assessed by the World Health Organisation that an individual consumes about 6.2 litres of alcohol per year. According to the World Health Organization (WHO), average alcohol consumption in India was 5.7 litres per person above the age of 15 per year in 2016, up from 4.3 litres in 2010. On per capita consumption, India is ranked 101 (with Moldova leading with 15.2 litres. In the immediate neighbourhood, the figure for Pakistan is 0.3 litres and China is 7.2 litres).

Moreover, about a third of India’s population consumes alcohol on a regular basis and 11% of the total number of Indians are moderate or heavy drinkers. One-third of males and one-fourth of females in India who have made it a part of their lives say, in surveys, that it causes problems to their physical health, finances and household responsibilities. But alcohol —the recent events have shown—is an intricate and essential part of the Indian economy.

Now let us evaluate state wise consumption of alcohol, measured in consumption per capita, per week in millilitres. For Toddy and country liquor, Andhra Pradesh and Telengana have the highest levels of consumption which drops to the lowest levels in states like Jammu and Kashmir, West Bengal, Maharashtra and Gujarat (for obvious reasons). The consumption in these states are as low as 100 ml per capita per week. Levels of Toddy consumption have seen a sharp decline in the northern state of Bihar as well, which still ranks in the medium to average range (101 – 500 ml. per capita per week).

Moving on to beer, imported wine and imported alcohol varieties, we see that Andhra Pradesh and Telangana still consume more than 300 ml. per capita, making those states the highest consumers in this category. Himachal Pradesh shows a sudden spike (101- 300 ml), and so do the north eastern states of Arunachal Pradesh and Mizoram and the islands of Andaman and Nicobar (>300 ml). Goa too, sees a high trend in this category, with the average between 101 and 300 ml per capita per week. The rest of the country remains quite conservative in their consumption trends of Indian Made Foreign Liquor (IMFL) varieties.

Overall, it has been observed that the Union Territories of Dadra and Nagar Haveli, Arunachal Pradesh, Andaman and Nicobar Islands, Andhra Pradesh, Telengana, Daman and Diu, Sikkim and Pondicherry are among the highest consumers of spirits and alcohol varieties in India.

Now one of the reasons why there has been greater number of calls for bans on alcohol in certain areas is due to the fact that these regions suffer from chronic alcoholism and resultant poverty. The regular consumption of any variety of alcohol and especially country made liquor has also been found to be inversely proportional to family income, thus providing further evidence for this trend.

Consumption of local brews and toddy is one of the major reasons for deaths in alcohol related incidents. In recent years, about 136 people were killed in one single incident. In January 2015, in a village in eastern Maharashtra, 94 people lost their lives due to hooch liquor contamination and resulting toxicity. The states that have prohibition in place presently are: Nagaland (since 1989), Manipur (since 1991, except the hill districts), Kerala (2014), Gujarat and Lakshadweep (on all islands except Bangaram).

India is one of the fastest growing alcohol markets in the world. Rapid increase in urban population, sizable middle class population with rising spending power, and a sound economy are certain significant reasons behind increase in consumption of alcohol in India.

Indian Alcohol Consumption – The Changing Behavior provides a comprehensive analysis of the market size of alcohol industry on the basis of type of products, consumption in different states, retail channel and imported and domestic. The Indian alcohol industry is segmented into IMFL (Indian made foreign liquor), IMIL (Indian made Indian liquor), wine, beer and imported alcohol. Imported alcohol has a meager share of around 0.8% in the Indian market. The heavy import duty and taxes levied raise the price of imported alcohol to a large extent. Alcohol is exempted from the taxation scheme of GST.

The Indian alcohol market is growing at a CAGR of 8.8% and it is expected to reach 16.8 billion liters of consumption by the year 2022. The popularity of wine and vodka is increasing at a remarkable CAGR of 21.8% and 22.8% respectively. India is the largest consumer of whiskey in the world and it constitutes about 60% of the IMFL market.

Though India is one of the largest consumers of alcohol in the world owing to its huge population, the per capita alcohol consumption of India is very low as compared to the Western countries. The per capita consumption of alcohol per week for the year 2016 was estimated at 147.3 ml and it is expected to grow at a CAGR of 7.5% to 227.1 ml according to estimates.

The states of Andhra Pradesh, Telangana, Kerala, Karnataka, Sikkim, Haryana and Himachal Pradesh are amongst the largest consumers of alcohol in India. The most popular channel of alcohol sale in India is liquor stores as alcohol consumption is primarily an outdoor activity and supermarkets and malls are present only in the tier I and tier II cities of India.

The trends and pattern of alcohol consumption are changing in the country. With the increasing acceptance of women consuming alcohol, growing popularity of wine and high demand for expensive liquor, the market scenario seems to be very optimistic in the near future.

The study reflected changing pattern of the consumer’s mindset towards alcohol consumption in India. 3% of the respondents who consumed alcohol favoured wine for its health benefits. Though the popularity of whisky is highest in the Indian market, its market share is expected to decrease in future.

Alcohol consumption in high-income countries witnessed constant growth, but it has been growing in low and middle-income countries as well. Before 1990, Europe had recorded the highest level of alcohol use. However, the study forecasts that Europe will not hold that title for long.

Going ahead, the world will drink more, and more people will drink as well. The research also suggests that almost half the adults across the world will consume alcohol by 2030, whereas a quarter of them will become binge drinkers.

Binge drinkers are those people who drink 60 grammes or more pure alcohol in one or more sittings, in a month.

Starting Young

Indians are not just drinking more, they are drinking dangerously as well. As many as 57 million people are facing the after-effects of alcohol addiction. A survey by the Community Against Drunken Driving (CADD) revealed that over 88% of youth below 25, consume or purchase alcohol though it’s illegal. Punjab, Goa, Tripura, Chhattisgarh and Arunachal Pradesh rank high on alcohol consumption. However, Uttar Pradesh has the highest number of alcohol drinkers in India.

Regulating alcohol

A few state governments like Bihar, Gujarat, Mizoram and Nagaland, have prohibited the sale of alcohol. States like Kerala, Bihar, Tamil Nadu have imposed variety prohibition since 2016. The state government of Rajasthan allows sale of liquor only until 8.30 in the evening. India has also witnessed an increase in the number of drunken driving cases. According to reports, fines from drunk driving in India in 2018 alone, was at around `6 crore.

Assam is the highest alcohol consuming state in India

In the 15-54 age group, with 59.4%, men from Assam were found to be the highest consumer of alcohol in the country. In the latest Health and Family Welfare Statistics (HFWS) in India, it has been reported that 26.3% of women and 59.4% of men between 15-54 years of age consume alcohol in Assam. This is the highest in the country and the national percentages for the same age group are respectively 1.2 and 29.5. However, in terms of percentage of the population for both men and women in the age group 15-49 years who drink alcohol about once a week out of a total population (men and women) who drink alcohol, Assam women scored 44.8% and men scored 51.9% Meanwhile, in the 15-54 age group for women, Nagaland, Himachal Pradesh, Goa, and Karnataka recorded the lowest alcohol consumption with 0.1%. In the same category for women, Jammu & Kashmir occupies the second position with 23% women found to be consuming alcohol. In the 15-49 age group, with 59%, men from Arunachal Pradesh were found to be the highest consumer of alcohol in the country. The HFWS report further revealed that percentage of the population of men and women in the 15-49 years who drink alcohol about once a week was found to be 45.2% and 55.1% respectively for women and men of Arunachal Pradesh. For women and men in Nagaland, the percentage of the population who drink alcohol about once a week in the 15-49 age group was found to be 65.5% and 46.4% respectively. As for the other states from the northeast, the percentage of the population of men and women in the 15-49 years who drink alcohol about once a week are – Manipur 21.3% and 40.1%; 25.1% and 42.4%; Mizoram 20.3% and 41.2%; Nagaland 65.5% and 46.4%; Sikkim 33.9% and 43.5% and Tripura 50.8% and 47.1%. The five southern states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Kerala together consume as much as 45% of all liquor sold in the country. The financial position of these states is precarious as the Coronavirus lockdown completely dried up this crucial liquidity tap for them in April. Although these states consume as much as 45% of all liquor sold in the country annually. Not a drop was sold in April, and given the dire state of their revenues, these states have been anxious to make good the losses by opening up the vends, said the survey. While Tamil Nadu and Kerala top the list in revenue percentage terms at 15% each, for Kerala the tax on liquor is its single largest revenue source. The revenue share is 11% each for Karnataka and Andhra Pradesh and 10% for Telangana, shows the report. Delhi is at number three when it comes to liquor revenue share with 12% of tax revenue, but its citizens swig only 4% of the national intake. Tamil Nadu has another distinction – it is the single largest consumer of liquor in the country, guzzling as much 13% of national sales, closely followed by Karnataka with 12%. Andhra quaffs 7% of the national intake, followed by Telangana (6%) and Kerala (5%). While all other states have high population, when it comes to Kerala, despite being home to only 3.3 crore people, it draws the highest revenue because among the five states it charges the highest tax rate on liquor. However nationally, Maharashtra charges the highest rate, but draws only 8% of its tax revenue from liquor – primarily because it is the most industrialised state and has many other sources of income – and also consumes only 8% of the national intake despite being the second most populous state. Twelve states – the five southern ones, Delhi, Punjab, Uttar Pradesh, West Bengal, Madhya Pradesh and Rajasthan – account for 75% of liquor consumption in the country. But uncorking the bottled spirit will also be a problem for these 12 states as they contribute to more than 85% of all Covid-19 infections/deaths as well. Among these 12 states, Kerala has the lowest national average in this at under-1%, the report said. You might associate Goa with booze and partying, but a higher proportion of people in Telangana consume alcohol than in the former. And a larger percentage of men drink in Bihar, a state under prohibition, than in Maharashtra. Gujarat and Jammu & Kashmir, in that order, have the least consumption of alcohol among men. When it comes to women’s consumption of alcohol, Sikkim and Assam, with 16.2% and 7.3%, respectively, top the charts. But here, too, Telangana comes next, topping Goa. Barring Telangana and Goa, most of the states at the top are in the northeast. The consumption among rural women is significantly higher than in urban areas in most states, which could also be due to less hesitation in admitting to alcohol consumption compared to urban women. This difference in prevalence of alcohol consumption exists between rural and urban men too, but the difference is not as high as among women. Covid-19 may change many aspects of work, life and the economy, but India’s relationship with alcohol will likely remain intact. If anything, the linkages might get stronger. When the pandemic-induced lockdown was first announced, the Centre excluded liquor shops in the category of establishments that would stay open. It was not deemed to be “essential”. States backed the Centre’s stance. But as the days under the lockdown accumulated, and as the economy and tax collections slumped (with more money from the Centre not forthcoming), states started clamouring with the Centre to allow liquor vends to reopen.

State controls

India has had a conflicting history with prohibition. States have been torn between the need for revenues and the broader problems its abuse created. As a result, they have been imposing dry days, and some form of control. Some states have gone the full hog in imposing prohibition: Gujarat (since 1960), Nagaland (since 1989), Bihar (since 2016), Mizoram (since 2019), and in most parts of Lakshadweep. In most parts, states control liquor distribution. Take, for example, TASMAC (Tamil Nadu State Marketing Corporation), set up in 1983 by then-chief minister M.G. Ramachandran as the monopoly liquor wholesaler for better control over distribution. For retail, it auctioned licences to the private sector. This, in turn, led to problems, including cartelisation and customer complaints – and lower revenues to the state. Twenty years later, the J. Jayalalithaa government claimed monopoly over retailing too. It has served the state well. Its revenues jumped from `2,828 crore in 2002-03 to `31,157 crore in 2018-19. It’s also a reason why Tamil Nadu has been pushing the Centre to reopen liquor shops. Unlike the purchase of a car or a computer, lost liquor sale is lost forever. Thus, for TASMAC, which was selling 160,000 cases of Indian-made foreign liquor and 90,000 cases of beer every day, the sales might not necessarily return, reducing the ability of Tamil Nadu to fund even ongoing schemes. The time has come to ‘de-criminalise’ liquor as the state of Goa has done successfully. Considering that 50% or more of the price of every bottle finds its way to the coffers of state governments, it is preposterous that tipplers are treated with such scant respect.